Brokers' take

First Resources | Buy Target price: S$2.15 March 1 close: S$1.875 DBS Group Research, Feb 28

We expect First Resources to book a strong 54 per cent earnings growth this year - premised on volume recovery. We also expect relatively strong crude palm oil and palm kernel average prices to continue this year; partly offset by slightly lower expected biodiesel output and thin refining margins. In this report, we reiterate our "buy" rating on 15 per cent potential upside (excluding two per cent dividend yield).

FR's aggressive planting in East and West Kalimantan between FY12 and FY14 will contribute to the group's strong volume and earnings growth through FY18F. Subject to opportunistic acquisitions, we expect its output growth to decelerate from FY19F, as new planting is forecast to moderate from FY16 onwards (excluding new acquisitions).