KUALA LUMPUR (Nov 19): Kuala Lumpur Kepong Bhd (KLK) shares rose as much as 12 sen or 0.5% after the oil palm plantation firm declared a final single-tier dividend of 30 sen a share. KLK declared the dividend, despite reporting lower full-year net profit.
 
Yesterday (Nov 18), KLK reported net profit fell to RM869.91 million in financial year ended Sept 30, 2015, from RM991.71 million a year earlier. Revenue rose to RM13.65 billion, from RM11.13 billion.

Today, KLK shares rose to RM22.80 — its highest so far. At 10:59am, the stock pared gains at RM22.60, for a market capitalisation of RM24.18 billion.

TA Securities Holdings Bhd wrote in a note today that KLK's core net profit beat the research firm's forecast, solely due to higher-than-expected "other operating income."

TA said it had upped its KLK net profit forecast and target price (TP) for its shares.

"FY16/17 earnings forecasts upgraded by 7.9%/7.5% to take into account, the higher-than-expected other operating income (including dividends from investments).

"TP upgraded to RM21.18 (RM21.07 previously) to take (into account) market value of KLK’s investment in Synthomer Plc. Maintain KLK as Sell, as currently valuation (FY16 PER of 20.5x) fairly reflects earnings potential from higher CPO price ahead. A key catalyst will be CPO price rebounding faster and better than our expectations," TA said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)