Sime Darby

Sime Darby

Postby winston » Fri May 27, 2011 6:49 pm

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Sime Darby says FY2011 profit will beat forecast

KUALA LUMPUR - Malaysia's Sime Darby, the world's top planter by landbank size, said it expects to beat its targets for this financial year due to strong crude palm prices, better contributions from other divisions and a plan to cut non-core assets.

Sime made a commitment last year to cut non-core assets after suffering two consecutive quarters of losses owing to losses at its energy division.

As a part of its reorganisation, Sime said on Friday it has signed a memorandum of understanding to sell its oil and gas-related fabrication yards for RM695 million (US$228 million) to state oil company Petronas.

The company was also on track to exceed its announced financial targets for 2011 thanks to higher crude palm oil (CPO) prices and better performance from its industrial and motors divisions.

CPO prices surged to levels not seen since 2008 in the first three months of the year, but have moderated due to uncertainty over the global economic recovery.

Sime reported a net profit of RM820.1 million during the third quarter ending in March, compared to a net loss of RM308.6 million for the same period a year ago.

Results in the year-ago quarter were hit by cost overruns totalling US$656 million at Sime's energy unit, which led to intense investor scrutiny and a number of ongoing legal suits. 'This marked improvement in performance was achieved despite difficult operating conditions,' Sime's chief executive, Bakke Salleh, said in a statement, adding that the company has completed a review of its businesses and was finalising plans for a restructuring.

Sime said the average realised CPO price for the January-March period was RM3,142 per metric tonne, compared to RM2,835 for the prior quarter.

Despite the higher price, poor weather conditions affected the palm harvest resulting in a quarterly decline in profit for its plantations division, which still accounted for 51 per cent of its third quarter pre-tax profits.

The plantation division also made a small impairment of its biodiesel assets totalling RM82 million.

A recently signed Indonesian moratorium on logging could also dampen Sime's planting efforts in South-east Asia's most populous country, although the government has eased the impact by revealing a list of exemptions. Sime's Q3 net profit was also driven by improvements from its industrial and motors divisions, which posted a nine-month growth of 30 per cent and 90 per cent respectively.

Sime's main business segments are plantation, property, industrial, motors, energy and utilities, and healthcare.

Analysts on average expect a full-year profit of RM3.26 billion for Sime. They do not generally provide quarterly estimates for Malaysian companies.

Eighteen of 28 analysts tracked by Thomson I/B/E/S have a 'buy' or 'strong buy' call on the stock.

Sime's shares have risen 3.8 per cent so far this year, while local rival IOI Corp shares have fallen 7.7 per cent and Singapore-based competitor Wilmar shares have fallen 4.0 per cent.

Source: REUTERS

http://www.businesstimes.com.sg/sub/lat ... 95,00.html?
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Re: Sime Darby

Postby winston » Mon May 30, 2011 10:03 am

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Valuation/Recommendationï‚·

Upgrade to HOLD (from SELL) with higher target price of RM9.40 as we roll over to 15x FY13F PE. Entry price is RM8.00.


Share Price Catalystï‚·

CPO price surging more strongly than expected.


http://research.uobkayhian.com/content_ ... 3a59e470d3
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Re: Sime Darby

Postby winston » Tue May 31, 2011 2:22 pm

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Sime Darby [SIME MK] - Buy : 9MFY11 results broadly in line;
Exiting oil and gas business – positive( RM9.13 / PT: RM12.15 )
Ken Arieff Wong

3QFY11 (Jun FY-end) earnings were broadly in line with our and Street estimates, with 9M net profit forming 67% of our FY11 est.

Sime has decided to exit the Oil & Gas division (via asset disposal), and whilst we think the valuations received for the assets were not great, we think it’s a clear positive for sentiment & strategy.

Plantations division showed a recovery from last quarter’s weak EBIT on the back of stronger CPO ASPs, and FFB production recovery.

The motors & industrials divisions continued to see impressive performances, while property division was muted on delayed launches. BUY.


Source: Nomura
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Re: Sime Darby

Postby winston » Sat Oct 25, 2014 11:19 am

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Sime Darby’s fair value unchanged at RM10.58
25 OCTOBER 2014

AMRESEARCH Sdn Bhd remains negative on Sime Darby Bhd’s bid for New Britain Palm Oil Ltd (NBPOL), despite the deal’s possible synergistic values and benefits.

“We deem the high valuation at 22 times financial year 2015 forward consensus earnings and the premium to be paid for NBPOL as having an off-setting effect on the unlocking of value from the potential listing of the auto division.

“We do acknowledge that the value propositions ahead would depend largely on what synergies and additional benefits Sime Darby will derive from the acquisition,” AmResearch said in a report yesterday.

The firm has kept “buy” call on Sime Darby, with an unchanged fair value of RM10.58 a share. This is based on a 15 per cent discount to sum-of-parts value of RM12.45 a share.

The stock remains a beneficiary of any upward trend in CPO prices, it added.

According to AmResearch, pursuant to the completion of the takeover by end of this year, Sime Darby Plantation’s enlarged land bank would measure about one million hectares.

“Sime Darby reiterated that the offer is in line with its blueprint to expand the land bank of Sime Darby Plantation. Meanwhile NBPOL, with its brown field assets is expected to contribute immediately to the earnings without the incumbent risk associated with a green field expansion,” AmResearch said.

Source: NST
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Re: Sime Darby

Postby winston » Thu Jan 26, 2017 4:55 pm

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Breaking Up To Unlock Value?

As part of its restructuring options, Sime might either demerge its plantation division or merge its property division with PNB Group.

The demerger of the plantation division could fetch the segment a better valuation compared with other divisions.

On the flipside, the property division’s merger with the PNB Group might allow Sime to focus more on other businesses post restructuring.

Maintain HOLD. Target price: RM8.65. Entry price: RM7.80.

Source: UOBKH

https://research.uobkayhian.com/content ... 26dacccacf
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Re: Sime Darby

Postby winston » Thu Jan 26, 2017 4:58 pm

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Biggest beneficiary of new port development in Klang Valley

Long-term positive as Sime unlocks value of estate

The proposed third port development in Klang Valley will be located at Carey Island where Sime is the largest landowner with over 10,000ha.

The new port development will hasten the unlocking of land value at Carey Island over the next 20-30 years.

We are long-term positive over this development.

Maintain HOLD with unchanged TP of MYR8.20 on 21x FY18 PER, its historical 5-year mean.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/4 ... 03a03b.pdf?
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Re: Sime Darby

Postby winston » Thu Jan 26, 2017 8:56 pm

Malaysia's Sime Darby to spin off plantation, property businesses

Jan 26 Malaysia's Sime Darby Bhd will spin off its plantations and property businesses in separate listings on the local stock exchange, while retaining its trading and logistics business, it said on Thursday.

The plantations to property conglomerate, said the move would allow each business to take advantage of potential growth opportunities and maximise value for all shareholders.

"The transaction is not expected to result in any major disruption to the Sime Darby Group's existing operations," it said in a statement.

"The proposed pure-play strategy, will enable each business to focus on their respective core activities and pursue their different and distinct aspirations."

Sime Darby, the world's largest palm oil plantation operator by land size, announced in November it could list its plantation business as it looks to monetise assets.

It had earlier looked at listing its motors division, but put its plans on the backburner due to bleak business sentiment in the automotive sector.

Source: Reuters

http://www.reuters.com/article/sime-drb ... SL4N1FG3HI
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Re: Sime Darby

Postby winston » Fri Jan 27, 2017 10:27 am

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Pure Plays Might Not Enhance Value

Sime announced its plan to create three stand-alone businesses, ie pure plays in the plantation, property and trading and logistics sectors.

We are not positive on this plan.

The plantation division currently holds a premium PE and splitting the unit could lead to a rerating rating risk for property as well as trading and logistics listings.

However, the final outcome still depends on the restructuring structure and valuation.

Maintain HOLD. Target price: RM8.65. Entry price: RM7.80.

Source: UOBKH

https://research.uobkayhian.com/content ... b5af2f5ba7
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Re: Sime Darby

Postby winston » Fri Jan 27, 2017 1:08 pm

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Sime Darby Soars on Plans to Split Into Three

By Robert Guy

Sime Darby (SIME.MY) is up nearly 5% in Friday trading as investors react positively to its plan to split its business into three parts.

The Malaysian conglomerate will spin off its property and plantations businesses and list them separately on the Bursa Malaysia. Sime Darby will retain the trading and logistics businesses.

The stock has rallied strongly in anticipation of the splitting of its assets. Sime Darby shares are up 14% so far this year.

CIMB is upbeat on the proposal, which will result in the listing of the world’s largest palm oil play.

Here’s the broker’s analysis;

The exercise will lead to the spin-off of Sime Darby Plantation, which has a landbank of 988,599 ha and planted area of 603,254 ha, making it the largest oil palm plantation company in the world.

In our SOP valuation, we value the plantation division at RM39bn, based on FY18 P/E of 26x and EV/ha of RM63.7k. This will place it as the largest listed plantation company in Malaysia, with IOI and KLK coming in second and third with market caps of RM29bn and RM26bn, respectively.

CIMB retained its Add rating but raised its target price to MYR9.80 a share from MYR9.43 a share, implying the stock has upside of around 6%.

Source: Barron's

http://blogs.barrons.com/asiastocks/201 ... nto-three/

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... nto-three/
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Re: Sime Darby

Postby winston » Sun Feb 12, 2017 7:49 am

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Unlocking value in Sime Darby

JUST before the lunar new year started, conglomerate Sime Darby Bhd, which has businesses ranging from oil palm plantations to ports in China, announced that the group would be splitting into three listed entities.

The plantation and property divisions will have separate listings, while the BMW distributorship, port operations and trading businesses will remain under the existing listed entity.

One can only hope that things will go better for the separate entities than the present enlarged entity, whose share price has underperformed since the merger of Golden Hope Plantations Bhd, Kumpulan Guthrie Bhd and Kumpulan Sime Darby Bhd some nine years ago.

It is interesting to see how equity research analysts are overwhelmingly positive on the plan to spin off the plantation and property divisions into separate listed entities, while the rating agencies are more cautious.

Moody’s Investors Service has placed on review for downgrade the group’s credit rating, saying that the spinoffs will lead to reduced diversification, scale and cash flows.

Meanwhile, Fitch Ratings will reassess the group’s credit profile after more details are released on shareholding and debt structures after the listings. Fitch noted that the details may be forthcoming at the group’s second-quarter ended Dec 31 briefing to be held later this month.

The three companies that will emerge from this restructuring will no doubt be “iconic”, as Sime Darby’s group chief executive officer and president Tan Sri Mohd Bakke Salleh described them in a statement, but will shareholders benefit from the growth potential? The separate entities will bear the Sime Darby name, but will investors be convinced?

Of course, past performance should not be a reflection of future performance, but one cannot help but point to the spin that took place before the merger then that created the current structure. The theme then and now remains “creating shareholder value”, which is as it should be.

However, the share price has not reflected the benefits of the merger, despite the group’s plantation business being the largest producer of certified sustainable palm oil (CSPO) today, accounting for nearly a quarter of total global CSPO production, and the property business evolving into an integrated developer with an international presence.

The “conglomerate discount” does not really apply to Sime Darby, which is mostly identified as a plantation firm since around two-thirds of revenue come from palm oil.

It is to be hoped that there will be more clarity to the demerger later this month as it should certainly be concerning to not only shareholders but also to the wider public, many more of whom are holders of unit trust funds under Permodalan Nasional Bhd, the controlling shareholder of the group.

Source: The Star
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