SIMP.JK | OUTPERFORM - Maintained | Share Price Rp1,170.00 - Tgt. Rp1,565.00

SIMP.JK  |  OUTPERFORM - Maintained  |  Share Price Rp1,170.00 - Tgt. Rp1,565.00

Plantations | - by Ivy NG, CFA

SIMP's 9M12 fell short of expectations as stronger sugar contributions failed to offset the drop in rubber earnings and higher costs. The key culprits were higher fertiliser and labour costs as well as lower prices for rubber and palm kernel. 9M12 earnings accounted for only 64% of our full-year forecast and 62% of consensus numbers. Higher costs and lower selling price assumptions now dilute our FY12-14 EPS forecasts by 12-15%. This reduces our target price (still based on regional peers' 14x forward P/E) despite our rollover to CY14. We retain our Outperform call due to its attractive valuations.

  

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Regard

Ghinie

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