Hwang-db 2/10/2009

Highlights
Plantation sector
Selective buying opportunities
• We raised CY10F–11F CPO prices to RM2,380 –
2,440/MT, as prices could rebound in 4QCY09
onslower supply growth and lower soybean oil stock
• Laggards have not priced in potentially higher long
term CPO prices; we recommend raising positions
• First Resources, KLK and IndoAgri raised to Buy; Sime
and IOI raised to Hold; intiate coverage of Sampoerna
Agro with Buy rating
• Our scorecard ranks KLK, Sampoerna Agro and
IndoAgri in top-three spots


Sime Darby (RM8.54; Hold; Price Target: RM8.45
previously RM7.45; SIME MK)
Worth more broken up?
• FY10F-11F EPS raised by 8.5-12.5% on changes in our
CPO and FX rate assumptions
• Rating upgraded to Hold on improved outlook. Price
still demanding, wait for weakness
• Chinese investment unlikely to materialize soon. Look
for break-up value instead
IOI Corp (RM5.21; Hold; Price Target: RM4.95 previously
RM4.65; IOI MK)
At the cross roads
• FY10F-11F EPS revised by 4.5-10.8% to reflect changes
in CPO price and FX rate assumptions
• FY10F net earnings will jump 81% y-o-y following
reversal of one-off items
• TP raised to RM4.95. Upgrade to Hold.


KL Kepong (RM13.88; Buy; Price Target: RM15.40
previously RM13.80; KLK MK)
Proxy to rising CPO prices
• We upgrade 2010-11 CPO price assumptions to
RM2,380/MT and RM2,440/MT, respectively
• Raised FY10F-11F earnings by 2-7% mainly on higher
CPO price and OER assumptions
• Upgrade to Buy from Hold with a higher DCF derived
TP of RM15.40.