Sarawak Plantation Berhad

$TAANN / 5012 (TA ANN HOLDINGS BERHAD) $INNO / 6262 (INNOPRISE PLANTATIONS BERHAD) $SOP / 5126 (SARAWAK OIL PALMS BERHAD) $SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD) all quite power qr and power dividend

other plantation can ikut ??

KUCHING: Sarawak Plantation Bhd has developed its own innovative oil palm fruit harvesting machine to address the long-standing shortage of fruit harvesters faced by the industry and boost production efficiency.

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD) - 2Q24
Sarawak Plantation’s 2QFY24 core net earnings were reported at RM13.8m, reflecting a quarterly growth of 24.5% and a yearly growth of 15.8%. The year-on-year improvement was primarily due to reduced production costs from higher Fresh Fruit Bunches (FFB) production and lower fertilizer costs.

Core net profit for 1HFY24 stood at RM24.9m, which is considered within expectations, accounting for 34-36% of analysts' full-year estimates. The revenue for 2QFY24 increased by 3.3% quarter-on-quarter (QoQ) and 3.2% year-on-year (YoY), driven by higher selling prices of Crude Palm Oil (CPO), Palm Kernel (PK), and FFB.

Revenue and Earnings Growth: The company showed resilience with solid YoY and QoQ growth in core net earnings, supported by higher FFB production and better selling prices for CPO and PK. This indicates good operational management, particularly in cost control (e.g., lower fertilizer costs).

Industry Tailwinds: The broader industry context, with decreasing inventories and strong export demand, is favorable. This could support continued strong pricing for CPO in the near term, potentially boosting revenue further in 2H24.

Operational Hiccups: Despite the positive earnings, the decline in extraction rates and slight drop in CPO and PKO production could be red flags. If these issues persist, they could weigh on future profitability, particularly if CPO prices were to decline.

Conservative FFB Forecasts: Analysts have downgraded their FFB production forecasts due to weaker-than-expected output and challenging weather conditions. This conservative stance suggests there may be limited upside unless the company can overcome these operational hurdles.

Sarawak Plantation's recent results show some positive growth in earnings, driven by higher FFB production and better cost management. However, issues like lower extraction rates and revised production forecasts are concerning. While the company could see a boost in earnings in the second half of the year due to strong CPO prices and peak season, I'm cautious about the long-term outlook. I'd prefer to wait and see how the company handles

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by CGS
ADD – TP RM2.80

" Better 2Q24 results; likely stronger 2H24F”

■ 1H24 core net profit was below our and Bloomberg consensus expectations, at 31% and 33% of full-year estimates, respectively.
■ Having said that, 2Q24 core net profit came in much higher qoq and yoy, mainly buoyed by the higher CPO and PK ASP.
■ We expect net profit to continue to recover in 2H24F as CPO prices remain high while the 2H24F peak crop season should lift FFB output.
■ Reiterate Add with TP of RM2.80, still based on 10x 2025F P/E. Sarawak Plantation also provides a decent dividend yield of about 5% for FY24F

Analyst:
Jacquelyn YOW
jacquelyn.yow@cgsi.co

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by MIDF
NEUTRAL – TP RM1.98

" FFB Production Grew In-line with Seasonal Factors”

• Earnings was lower mostly due to seasonal factors
• Oil palm profitability/margins remain decent
• Estate activities continue intact
• Earnings estimates; Revised lower for FY25
• Maintain NEUTRAL with a revised TP of RM1.98

Analyst:
MIDF Research Team
research@midf.com.my

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by Public
Outperform – TP RM2.74

"Expecting More in 2H”

Stripping out gain on fair value of biological assets of RM19.9m and PPE write-off amounting to RM0.2m, Sarawak Plantation registered core earnings of RM25.6m for 2QFY24, up 20.2% YoY. Nevertheless, the results made up only 34% and 31% of our and the street full-year expectations, respectively. We keep our earnings forecasts as we expect a strong catch-up in 2H on the back of seasonally higher production and lower production cost. Maintain Outperform call with an unchanged TP of RM2.74 based on 10x FY25 EPS. No dividend was declared for the quarter.

Analyst:
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by APEX
HOLD – TP RM 2.24

"Within expectations”

• Sarawak Plantation recorded CNP of RM13.8m (+15.8% yoy, +24.5% qoq) in 2QFY24, bringing 1HFY24 CNP to RM24.9m (+8.4% yoy), which was within ours and consensus’ expectations, accounting for 34% and 36% of forecasts respectively.
• Looking ahead, we expect earnings to recover lost ground in view of upcoming seasonal production upcycle.
• We kept our earnings forecast unchanged with recommendation to HOLD. Our TP of RM2.24 is based on 7.9x PE with rolled over FY25 EPS of 28.3sen.

Analyst:
Steven Chong
stevenchong@apexsecurities.com.my

DISCLOSURE ON QUARTERLY PRODUCTION

MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)

MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)

PLANTATION
$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD) $SIMEPLT / 5285 (SIME DARBY PLANTATION BERHAD) $TAANN / 5012 (TA ANN HOLDINGS BERHAD) $CHINTEK / 1929 (CHIN TECK PLANTATIONS BERHAD)
Research by PB
Neutral

“Inventories Climb to 3-Month High”

Palm oil inventories in Malaysia continued on its uptrend in May with a marginal gain of 0.5% to 1.75m mt, the highest level in 3 months. YTD, CPO prices have averaged RM4,034/mt, compared to our full-year average target of RM3,800/mt. In view of higher production in subsequent months, we expect inventory to continue trending upwards, which may consequently exert downward pressure on CPO prices. Maintain Neutral on the sector.

Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my

General Meetings: Outcome of Meeting

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by MIDF
Neutral – TP of MYR 2.20

“Performance Largely In-Line with Seasonal Factors”

After excluding the change in fair value of biological assets and PPE written off, SPB’s core PATAMI came in only at RM7.9m (-14.1%yoy), despite a higher operating profit of RM14.1m (+3.7%yoy) recorded. While this is largely considered within our estimates, accounting for about 11% of full-year estimates, it’s worth noting that 1Q always the weakest results among the quarters due to low crop cyclicality. Notably, CPO production and sales volume were also down by -25.1% and -24.7% respectively, due to aforementioned factors.

Analyst(s):
MIDF Research Team
research@midf.com.my

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by PIB
Outperform – TP of MYR 2.74

“A Slow Start”

Stripping out gain on fair value of biological assets of RM10.9m and PPE writeoff amounting to RM0.3m, Sarawak Plantation registered core earnings of RM8.6m for 1QFY24, down 18.9% YoY. The weaker results made up only 11.4% and 13.9% of our and the street full-year expectations, respectively. The weaker-than-expected results were attributed to a shortfall in FFB production. Despite the weaker-than-expected results, we keep our earnings forecasts as we expect to see a strong catch-up in the subsequent months, led by higher FFB production and lower cost of production. Maintain Outperform call with a new TP of RM2.74 after rolling over our valuations to FY25. A first DPS of 5sen was declared for the quarter.

Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by APEX
Hold – TP of MYR 2.15

“Off to a weak start”

1QFY24 net earnings stood at RM19.3m, rose +59.5% yoy and +105.5% qoq. Meanwhile, revenue registered at RM127.3m, recording growth of +14.2% yoy (-20.0% qoq). The yoy performance was mainly lifted by higher sales volume of CPO and PK.

Analyst(s):
Steven Chong
stevenchong@apexsecurities.com.my

SWKPLNT - Notice of Book Closure

KUALA LUMPUR: Sarawak Plantation Bhd (SPB) expects crude palm oil (CPO) prices to remain strong this year due to slowing palm oil supply growth and rising demand.

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

PROVISION OF FINANCIAL ASSISTANCE

First Interim Dividend

PLANTATIONS
$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD) $TAANN / 5012 (TA ANN HOLDINGS BERHAD)
Research by PIB
Neutral

“Inventories Rose Unexpectedly in April”

Palm oil inventories in Malaysia surprisingly reversed in April after shrinking for 5 consecutive months as production continued to recover while exports weakened. The bearish data sent the CPO futures to RM3,790/mt, down 1.1%. YTD, CPO price averaged at RM4,054/mt. In view of higher production in the subsequent months, we expect inventory to continue trend uptrend, which may exert further pressure on CPO prices in the near-term. Maintain Neutral on the sector.

Analyst(s):
Chong Hoe Leong
chonghoeleong@publicinvestbank.com.my

MONTHLY PRODUCTION FIGURES (MINING / PLANTATION / TIMBER)

PETALING JAYA: The recovery of Sarawak Plantation Bhd’s (SPB) crude palm oil (CPO) production is on track, backed by expected fresh fruit bunch (FFB) yield improvement, growing matured area and higher replanting activities for financial year 2024 (FY24), says Apex Securities Bhd.

$SWKPLNT / 5135 (SARAWAK PLANTATION BERHAD)
Research by Apex
Hold – TP of MYR 2.16

“CPO production recovery on track”

Re-iterate our HOLD recommendation with a higher TP of RM2.16 (previously RM2.04) based on forward PE multiple of 8.2x and FY24F EPS of 26.4 sen. Although we are optimistic over SPB's production growth, we reckon that current share price has adequately reflects SPB's growth potential.

Analyst(s):
Steven Chong
stevenchong@apexsecurities.com.my

KUCHING: Sarawak Plantation Bhd is expected to fully rehabilitate the entire 6,000ha of oil palms on its unproductive estates this year, says its executive director Datuk Wong Kuo Hea.

Annual Audited Accounts - 31 Dec 2023

Part I Circular to Shareholders in relation to Proposed Renewal of Existing Shareholders' Mandate and Proposed New Shareholders' Mandate for Recurrent Related Party Transactions (RRPT) of a Revenue or Trading Nature Part II Share Buy Back Statement to Shareholders in relation to Proposed Renewal of Authority to Purchase Own Shares

Annual Report & CG Report - 2023

General Meetings: Notice of Meeting

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RECURRENT RELATED PARTY TRANSACTIONSVariation between mandated estimated value and actual value of recurrent related party transaction (RRPT)