First Resources

Regional Plantation
Research by RHB
BUY (Maintained); Price Target: $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD) RM27.35 $SGX-EB5 SGD1.95 $AALI IDR16,160

"Stock/Usage Ratio Falls Below Historical Mean"

Maintain OVERWEIGHT, regional Top Picks: Kuala Lumpur Kepong, First Resources and Astra Agro. Malaysian production continued to decline, while stocks inched closer to the 2m mark and stock/usage ratio fell to below the 15-year historical mean. We expect a pullback in prices before it resumes its upward trajectory in 1H20.Production dropped 14.4% MoM in November, coming off from the peak season. YTD-Nov 2019, output growth moderated further to +4.6% YoY. We continue to expect a moderation of growth in December, with Malaysia ending the year at around 3-4% mark for 2019.

Hoe Lee Leng
+603 9280 8860
Hoe.lee.leng@rhbgroup.com

Christopher Andre Benas
+6221 2970 7056
Christopher.benas@rhbgroup.com

Singapore Research
+65 6533 0781
Sg.research@rhbgroup.com

Regional Plantation
Research by RHB
Overweight (Maintained)

"Inventories Begin To Decline; Stay O/W"

Maintain OVERWEIGHT, regional Top Picks: KL Kepong, First Resources and Astra Agro. Production fell in October, which could indicate a short-lived peak season this year. Exports rose 16.4% MoM, despite the decline in exports to India, resulting in lower stock levels in October. With the recent CPO price surge, some of our TPs have been overshot, and we will address this in the upcoming weeks.

Hoe Lee Leng
+603 9280 8860
hoe.lee.leng@rhbgroup.com

$SGX-EB5 $GENP / 2291 (GENTING PLANTATIONS BERHAD) $KLK / 2445 (KUALA LUMPUR KEPONG BERHAD) $FGV / 5222 (FGV HOLDINGS BERHAD)

$SGX-F34 $SGX-EB5 $SGX-P8Z $SGX-5JS all at 1 yr high/near 1 yr high.