25 April 2012

TH Plantations reported decline of 40% in net profit to RM 13mil affected by higher production costs, Maybank Research says results underperformed and accounted only 10% of its FY12 forecast, target price RM 2.75 (HOLD)

(THPLANT opening stock price today (25.4.2012) was RM 2.81)

TH Plantations Bhd's share price slipped to a low of RM2.74 on Wednesday after it posted lower net profit in the first quarter ended March 31, 2012.

At 11.19am, the share price was down seven sen to RM2.74. There were 547,500 shares traded at prices ranging from RM2.74 to RM2.80.

TH Plantations reported a decline of 40.1% in net profit to RM13.06mil from RM21.83mil a year ago as its profitability was affected by higher production costs.

However, its revenue rose 26.6% to RM95.04mil from RM75.05mil while earnings per share were 2.53 sen compared with 4.36 sen.

Maybank Investment Bank Research said the results underperformed. It said the RM13mil core net profit (down 40% on-year, down 65% on-quarter) accounted for just 10% and 12% of its and consensus FY12 forecasts respectively.

"The shortfall is due to higher-than-expected cost and taxes. We maintain our earnings estimates for now pending further clarification from management.

"However, the underperformance could trigger short-term weakness in its share price, but mitigated by its upcoming payment of 2011 final DPS of 12.5sen a share. Maintain HOLD with an unchanged target price of RM2.75 (11 times 2013 price-to-earnings ratio).

Source: www.thestar.com.my


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