TSH Resources: Maintain Hold - Stressed Trees, Stressed Earnings

• Within house but below street expectations. 2Q12 net profit of MYR15m (-59% YoY, -3% QoQ) brings TSH's 1H12 net profit to MYR30m (-51% YoY), meeting 31% of our FY12 estimates. At just 23% of the street's full-year forecast, however, the results will be seen as a miss.
• There is no change to our earnings forecasts. We expect TSH's 2H12 FFB production to be stronger, and production costs to normalise.
• The share price has however priced in its growth potential; the stock remains a HOLD on an unchanged TP of MYR2.35 on 15x FY13 PER.

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Source: Maybank Research - 23 August 2012

TSH Resources: Maintain Hold - Stressed crops stressing earnings

• Lukewarm 2Q12. We forecast a flat QoQ 2Q12 net profit for TSH at MYR15m (-58% YoY) as FFB production (mainly Sabah estates) undershot our estimates.
• We cut our 2012 net profit forecast by 20% on lowered FFB growth assumption of 4% (previously 18%). Reiterate HOLD on TSH but we lower our TP to MYR2.35 (from MYR2.50) on unchanged 15x 2013 PER.
• Upside to earnings could emanate from its ongoing takeover offer of Pontian United Plantations.

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Source: Maybank Research - 17 August 2012

TSH Resources: Maintain Hold - Still Hungry For Growth

Makes conditional takeover offer. TSH has launched a joint voluntary conditional takeover offer for an unlisted plantation company via a 50:50 cash:share swap (into TSH shares priced at MYR2.14/share), potentially worth up to MYR624.8m. Based on a back-of-the-envelope calculation (amid sketchy details), the acquisition could lift our FY13 EPS estimate by 10% (assuming a 100% take-up of the offer). Pending further clarification and the final offer take-up rate, TSH remains a HOLD with unchanged TP of MYR2.50 based on 15x FY13 PER.

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Source: Maybank Research - 27 June 2012

TSH Resources: Maintain Hold - Hurt By Higher Costs, Lower Output

Below expectations. TSH's 1Q12 net profit of MYR15m (-42% QoQ, -37% YoY) accounts for 11% of our full year forecast. The shortfall is due to higher-than-expected costs on acceleration of manuring activity. Pending an update with management, our earnings forecasts, recommendation and TP of MYR2.78 (15x 2013 PER) are under review. Meanwhile, its share price has retreated 20% from its peak of MYR2.65 on lower CPO spot prices (12% off its peak).

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 Source: Maybank Research - 22 May 2012

TSH - Supported by plantations

TSH Resources; Buy; RM2.15
Price Target: RM2.55; TSH MK
4Q11 earnings within expectations. 20% FFB CAGR over FY11-FY14 to drive growth. Maintain Buy and RM2.55 TP.

Source: HwangDBS Research 23 Feb 2012

TSH Resources: Maintain Buy - Bounteous crop

Positive trend continues. TSH’s 2011 net profit of RM120.5m (+43% YoY) is in line with our and market estimates. We are upbeat on its FFB production growth momentum, with a 3-year forward CAGR forecast of 19%. Revision of our CPO ASP forecast (+8%) lifts our 2012-13 net profit estimates by 13.9-14.4%. Reiterate Buy with a higher TP of RM2.50 (+14%, from RM2.19) based on an unchanged 15x 2013 PER.


Maybank Research 23 Feb 2012

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TSH - Highest growth profile

TSH Resources; Buy; RM2.23
Price Target: RM2.55; TSH MK

Aggressive expansion in Indonesia to resume; maturing estates to drive FFB output growth. Raised FY12/13F earnings by 10/11% after revising CPO price and FX rate. Maintain Buy with higher TP of RM2.55

Source: HwangDBS Research 14 Feb 2012

TSH Resources RM3.60: Buy

Booms on fertile land  Shariah-compliant
Beats expectation. TSH’s 9M11 net profit of RM94.4m (+131% YoY) accounts for 87% and 84% of our and consensus full year forecasts. The stellar performance was due to its fertile Indonesian estates with higher than expected FFB yields. Thus, we bump up our FFB forecast by assigning higher yields to its Indonesian estates and raise our 2011- 13 net profit forecast by 11%-22%. Reiterate Buy with a higher TP of RM4.38 (+18%, from RM3.70) based on unchanged 15x 2013 PER.



Maybank research (18 November 2011)

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TSH Resources posts higher Q1 pre-tax profit

TSH Resources Bhd registered a higher pre-tax profit of RM33.640 million for the first quarter ended March 31, 2011, compared to RM17.918 million in the same period last year driven by strong
plantation earnings.

The company's revenue increased five per cent to RM252.599 million from RM240.476 million previously.

'Overall, the palm and bio-integration business segment's performance improved as result of higher crude palm oil prices and crop production, arising mainly from higher hectarage of mature plantation fields in Indonesia,' it said in a filing to Bursa Malaysia today.

The cocoa manufacturing segment also reported a better result due to an improved margin and stable prices.

However, as for the wood products segment whose bulk of its sale are exported, the operating environment in Europe and the United
States remains difficult.

The weak market coupled with the strengthening of the ringgit against the euro and the US dollar also dented the margins.

Palm oil prices are expected to be maintained above RM3,000 and the group is expected to achieve a satisfactory level of profitability. -- Bernama

MIDF stays positive on plantation sector

MIDF Research has reiterated its positive call on the plantation sector while maintaining the mean crude palm oil (CPO) price at RM3,400 per metric tonne this year.

In a research statement today it said the earnings growth of all plantation stocks under its coverage, is underpinned by an increase in matured hectarage, and improved yield.

'The matured hectarage of all the companies under our coverage is estimated to increase by 9.4 per cent and 11.3 per cent in financial year 2011 and 2012 respectively,' it added in a research note today.

Imputing other factors, MIDF said this will translate into an earnings growth of 14.2 per cent and 9.2 per cent in financial year 2011 and 2012 respectively.

However, market expectation has revolved around recovering output and weakening export, which has led to many revising downward their average CPO price forecast for this year while downgrading their plantation sector recommendation.

'We believe that the recent retracement in the CPO price is mainly due to speculation rather than deteriorating fundamentals,' it said.

MIDF said based on the law of average, it is suggested that RM3,400 is not an unrealistic target.

The research house also expects for the rest of second quarter, the CPO price to be sustained by supply factors while demand remains stable.

'CPO output is unlikely to fully recover in the short-term due to the after effects of adverse weather condition,' it said.

However, MIDF said the pick-up output is expected to happen only in the second half 2011 as the La-Nina phenomena is expected to fizzle out and weather conditions normalise.

Meanwhile, its top pick up for the big cap plantations companies are Sime Darby Plantation Sdn Bhd and Kuala Lumpur Kepong Bhd, because of their sizeable plantation areas that would provide higher potential earnings growth.

For small cap plantation stocks, it continues to like TSH Resources Bhd because of the large immature areas and TH Plantations Bhd, due to the stable dividend payable.--Bernama

Broker's Call - Mon, 07 Dec 2009

Broker's Call - Mon, 07 Dec 2009: ".
– KLCI Index Futures – A triangle in the making?
– Crude oil futures – Consolidation is likely to continue.
– CPO futures – Momentum could still last a while longer.
– TSH Resources (TSH MK; RM1.95, BUY) – Broke out of trend line resistance.
– Jerneh Asia (JER MK; RM2.04, SELL) – Probabilities are favouring the bears.
– Ranhill (RANH MK; RM0.86, SELL) – Follow through momentum is weak.
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TSH Resources (TSH MK; RM1.95) – BUY
FY10P/E: 12.7x, P/BV: 1.1x

• TSH has been gyrating in a triangle pattern over the past few months until it broke out of the trend line resistance last Friday. This is encouraging as it may signal more upside ahead. Next resistance is seen at RM2.04 and RM2.15.
• The improving technical landscape also supports our positive stance on the stock. Both MACD and RSI signal lines are rising.
• We need another white candle to confirm this bullish tone. Remember to keep a stop at RM1.86, as a fake-out would likely drag it lower towards the next support at RM1.78.

TSH Resources Berhad is an investment holding company that processes and distributes cocoa beans and cocoa products along with operating palm oil plantations and palm oil milling. The company also manufactures and supplies an wood and timber products and is involved in the generation of electricity.
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Jerneh Asia (JER MK; RM2.04) – SELL
FY10P/E: 19.4x, P/BV: 0.9x

• The sharp rise over the past few days lifted Jerneh to a new 52-week high of RM2.16 in intraday trading last Friday. However, we think this uptrend may be at its tail-end as its price pattern looks exhaustive.
• A spinning top indicates potential weakness among the bulls. A black candle today would mean more downside ahead.
• We think the probabilities are favouring the bears at the moment. Therefore, traders should do well selling into strength, likely near RM2.16-RM2.22 zone. Immediate support is seen at RM1.94, followed by RM1.79 next.

Jerneh Asia Berhad underwrites general insurance such as fire insurance, marine insurance, vehicle insurance and miscellaneous insurance. Through its subsidiaries, the company also operates hire purchase and leasing business, offshore reinsurance, trades marketable securities, and provides healthcare administration and consultancy services.
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Ranhill (RANH MK; RM0.86) – SELL
FY10P/E: N/A, P/BV: 0.8x

• The stock is trapped in a descending triangle pattern. Although a strong rebound took place last Friday after rounds of consolidation, we think sustainability is a key concern here.
• It swung past both 30- and 50-day SMAs as well as its triangle resistance on intraday trades, but profit taking set in subsequently to keep prices below all these levels. This reflects that follow through momentum is weak.
• We believe unload on strength is probably the best option here as sellers are likely to surface near its key SMAs. Meanwhile support is at RM0.80 and RM0.76.

Ranhill Berhad is an investment holding company. The company, through its subsidiaries, provides engineering, procurement, construction, and project management services. Ranhill also has operation in power generation, engineering and installation of power distribution and generation facilities, manufactures switchgears and switchboards, and provides facilities
management service.

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