August MPOB statistics were within expectations with stock levels easing off as production saw a weaker month. Going forward, ECMLibra expects that production and exports are going to pick up concurrently, hence leading us to maintain our Neutral call. ECMLibra do note that the recurrence of a La Nina and also supply concerns in the soybean market could be re-rating catalysts for the sector.
ECMLibra has Trading Buy calls on all stocks under coverage except KLK. These companies currently trade below their historical average P/E multiples while CPO prices are at the RM3,000/mt levels and improved production is giving rise to strong earnings.
Selected Oil & Gas Stocks Fair Value, Target Price & Dividend Yield.
| Stocks | Rating | Price (RM) | Target (RM) | Mkt Cap (RMm) | EPS Growth (%) | PE Ratio (x) | Div Yield (%) |
|---|---|---|---|---|---|---|---|
| Sime Darby | Trading Buy | 8.10 | 10.95 | 52,162.1 | 15.5 | 14.2 | 3.5 |
| IOI Corporatio | Trading Buy | 4.51 | 6.11 | 29,706.9 | 9.3 | 15.2 | 4.4 |
| KL Kepong | Hold | 20.70 | 21.75 | 22,951.3 | 27.6 | 15.9 | 3.0 |
| Genting Plantation | Trading Buy | 7.10 | 8.64 | 5,516.8 | 38.3 | 12.3 | 1.3 |
| Boustead Holding | Trading Buy | 4.80 | 6.41 | 4,982.9 | 10.9 | 12.7 | 7.5 |
| IJM Plantation | Trading Buy | 2.50 | 3.61 | 2,124.5 | 38.0 | 12.5 | 3.0 |
Source : ECMLibra Investment Research