PLANTATION
 [%jSYk%] [%pDsk%] [%RCAV%] [%fJdf%] [%wfxI%]
Research by Kenanga
Neutral

“4QCY23 Results Review: Downstream the Culprit”

The plantation sector ended CY23 on a muted tone. None of the big three integrated players – SIMEPLNT, IOI and KLK - met our forecasts as their downstream earnings disappointed. Looking ahead, we expect upstream to remain the key earnings driver for CY24 with downstream potentially contributing more meaningfully in CY25. Maintain NEUTRAL as the sector is supported by a PBV of only 1.2x but argument for a strong upside catalyst is still not compelling. We continue to like those with ability or flexibility to expand such as PPB (OP; TP: RM18.50) and TSH (OP; TP: RM1.30).

Analyst(s):
Teh Kian Yeong
[%phcf%]

PLANTATION
 $KLSE-IOICORP $KLSE-KLK $KLSE-SIMEPLT $KLSE-GENP $KLSE-HSPLANT
Research by Kenanga
Neutral

“4QCY23 Results Review: Downstream the Culprit”

The plantation sector ended CY23 on a muted tone. None of the big three integrated players – SIMEPLNT, IOI and KLK - met our forecasts as their downstream earnings disappointed. Looking ahead, we expect upstream to remain the key earnings driver for CY24 with downstream potentially contributing more meaningfully in CY25. Maintain NEUTRAL as the sector is supported by a PBV of only 1.2x but argument for a strong upside catalyst is still not compelling. We continue to like those with ability or flexibility to expand such as PPB (OP; TP: RM18.50) and TSH (OP; TP: RM1.30).

Analyst(s):
Teh Kian Yeong
tehky@kenanga.com.my

$GENP / 2291 (GENTING PLANTATIONS BERHAD)

$HSPLANT / 5138 (HAP SENG PLANTATIONS HOLDINGS BERHAD)

$SIMEPLT / 5285 (SIME DARBY PLANTATION BERHAD)