Hap Seng Plantations could see better 4Q on higher CPO prices

KUALA LUMPUR: HAP SENG PLANTATIONS HOLDINGS Bhd’s earnings could improve in the final quarter of 2019 on higher crude palm oil prices and growing demand for palm-oil products, says Affin Hwang Capital research.

“After the disappointing 9M19 results, we expect HAPL’s earnings to start to improve in 4Q19 onwards on the back of higher CPO prices, as we anticipate demand for palm-oil products will outpace production,” it said.

The research house said it was raising its 2020-21 forecasts on the stock, in line with a higher CPO average selling price assumption.

It maintained its buy call on the counter with a higher target price of RM2 from RM1.70 previously.

To recap, Hap Seng’s 9M19 revenue was flattish year-on-year at RM293.7mil. After excluding one-off items, it reported a core net loss of RM6.7mil in 9M19 versus a core net profit of RM16.3mil in 9M18, owing to higher-than-expected operating expenses and tax rate.

Source: TheStar