TDM, considered one of the cheapest plantation stocks in Malaysia, closed up nearly 3 per cent to RM2.92 yesterday. Its net profit more than doubled to RM32 million for the quarter ended June 30 2011. The improved stock performance of the Terengganu state government outfit was in line with other plantation stocks on the market, which collectively increased by 121.54 per cent yesterday. Plantation stocks are in the limelight this results season as companies like TDM post stellar profits on higher crude palm oil (CPO) prices.
TDM posted a net profit of RM32 million on revenue of RM126.9 million for its second quarter due to higher crude palm oil production, which increased 26 per cent.
Hong Leong Investment Bank said TDM is one of the laggard plays within the plantation sector and was worth a second look due to a clearer business strategy, improving financial performance and standing, as well as continued dividend payouts.
"We are projecting TDM's net profit to rise from RM92 million in 2010 to RM129.1 million, RM105.2 million and RM100.2 million in 2011, 2012 and 2013 respectively, mainly on the back of higher CPO price assumptions of RM3,200 a tonne in 2011 and RM3,000 a tonne in 2012-2013," it said in a research report.
The above article is an excerpt from Business Times