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OSK Research starts CB
Industrial Product (7076.KU) at Buy with a target of MYR3.28 pegged to a
five-year average P/E of 9.4X on FY13 earnings.
The house says fundamentals of
the palm oil mill specialist are underpinned by high profits from palm oil
equipment projects and growing orderbook in modipalm mills especially in
Indonesia.
"The company is set to benefit from the strong growth in Indonesian
oil palm plantation sector which has a considerably young palm profile," says
OSK Research.
The house notes that the company has MYR787.3 million worth of
contracts and total unbilled sales of MYR355.8 million at the end of fiscal 1Q.
"We expect its core businesses to continue to do well, underpinned by its
growing orderbook, improved margins and potential new customers from Indonesia
and Papua New Guinea," it adds.
The stock is flat at MYR2.88.
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