NPC ... Jun10

- 1QFY10 net profit of RM10.1m was above with our FY10 profit forecast of RM33.3m. This was achieved on a higher than expected CPo price of RM2,505/MT.

- Q, 1Q10 revenue increased a marginal 4.5% to RM90.3m. Flattish revenue was mainly due to the combine effects of higher CPO price realised (1Q10: RM2,505/MT vs 4Q09: RM2,285/MT) and lower production. 1Q production, CPO volumes production was down by 5.2% to 31.0 k MT and FFB of -19% to 39k MT.

- YoY, 1QFY10 turnover and EBIT increase 49.9% and 33.1% respectively mainl y due to higher FFB production from own estates and CPO price realised. This is inline with the sector’s performance.

- Reiterate BUY and maintain target price at RM2.96 based on our 12x PER to FY10. Note that our forecast and valuation for NPC are conservative compared to other big cap planters which are already trading at CY10 PER of c.18x based on CPO price of RM2,400/MT.