Outperform | 12-Month Target Price RM3.83 | Current Price RM3.27 | Expected Return 17.1%

 

In-line with expectations, QL Resources Berhad (QL)‟s 1QFY13 revenue reported RM494.4m (+8.8% y-o-y, -0.8% q-o-q), 22.1% of our FY13F revenue forecast of RM2,229.4m. Earnings grew to RM31.4m (+13.1% y-o-y, -1.4% q-o-q), 19.7% of FYE13F of RM159.4m. Growth is attributed to 30% top-line growth for marine product manufacturing (MPM) and 21% for integrated livestock farming (ILF) segments from the corresponding quarter. Palm oil activities (POA) however dipped in revenue (-36% y-o-y) due to weaker CPO prices, lower contribution from owned estates and consequently lower FFB production. Decline q-o-q is expected due to seasonality factors. In 1QFY13, QL has still managed to sustain its top and bottom-line growth y-o-y despite the underperformance of the POA segment based on its resilient business model hence we believe our target price of RM3.83 is still

reasonable.

 

Source: PublicInvest Research - 24 August 2012