TA starts Felda Global with ‘buy’ call
KUALA LUMPUR, June 8 — TA Securities started Malaysian palm oil firm Felda Global Ventures Holdings Berhad with a ‘buy’ call and target price of RM5.50 per share based on the firm’s ambitious expansion plans.
TA said in a research note today that Felda Global, which is the world’s third largest plantation operator, plans to increase its palm oil yield to 23 tonnes per hectare and boost oil extraction rates up to 24 per cent by 2015.
“To achieve these targets, management also plans to consolidate estates, which would result in higher harvesting,” said TA.
But TA said Felda Global would also have to implement better management practices and profit sharing with harvesters to increase productivity.
Felda Global has said it wants to become a major new player in global commodity markets and plans to use the US$3 billion (RM9 billion) from its IPO proceeds to expand into Southeast Asia and Africa.
Government-owned Federal Land Development Authority (FELDA), the parent firm of Felda Global, manages more than 880,000 hectares of estates, putting it among the world’s largest producers of the palm oil. — Reuters