KUALA LUMPUR (Sept 8): The Employees Provident Fund (EPF) trimmed its stake in IOI Corp Bhd to 13.213% on Sept 2 — from 13.283% on Aug 25 — after the fund sold shares in the oil palm planter in several tranches as the latter’s share price topped RM4 for the first time in over two months.

According to IOI Corp’s Bursa Malaysia filings, the EPF on Sept 2 trimmed its stake in the company to 13.213% after disposing of 1,800 shares.

Following the disposal, the EPF's 13.213% stake in IOI Corp comprised 823.57 million shares, according to the oil palm planter’s filing yesterday.

IOI Corp said in an Aug 30 filing that on Aug 25, the EPF sold 942,800 shares and following the disposal, the fund owned a 13.283% stake in IOI Corp, comprising 827.94 million shares.

Interestingly, IOI Corp's share price closed higher at RM4 on Aug 25 for the first time in over two months since June 11, when the stock also ended at RM4.

The company did not specify at what price and to whom the EPF sold the shares between Aug 25 and Sept 2.

A glance at IOI Corp’ share price chart since June 11 until today revealed that the stock closed at its lowest at RM3.65 on July 30, Aug 2 and Aug 3 before finishing at its highest at RM4.12 on Aug 30.

Yesterday, the company's share price ended down at RM3.93 from RM4 on Monday (Sept 6).

At Bursa’s 12.30pm break today, IOI Corp’s share price settled three sen or 0.76% higher at RM3.96 after trading between RM3.93 and RM4 in the morning session.

At RM3.96, IOI Corp had a market capitalisation of about RM24.79 billion based on the company’s 6.26 billion issued shares.

The company on Aug 24 reported better full-year financials and declared a dividend to reward shareholders.

For the financial year ended June 30, 2021 (FY21), its cumulative net profit more than doubled to RM1.39 billion from RM600.9 million a year earlier, while revenue increased to RM11.25 billion from RM7.8 billion previously.

For the fourth quarter ended June 30, 2021 (4QFY21), IOI Corp declared a dividend of six sen a share, which brought the company’s cumulative FY21 dividends to 10.5 sen from eight sen the year before.

Meanwhile, analysts are weighing IOI Corp’s prospects against factors including crude palm oil (CPO) prices and environmental, social and governance (ESG) concerns.

Hong Leong Investment Bank Bhd (HLIB) analyst Chye Wen Fei wrote in a note yesterday that while HLIB maintained its view that current high CPO prices will not be sustained over the longer term, the research house nevertheless upgraded the Malaysian plantation sector to "overweight" as it believes a rerating is warranted on the sector’s palatable valuations and good near-term earnings prospects arising from elevated CPO prices. 

Chye said HLIB, which maintained its "buy" call for IOI Corp shares, however, cut its target price (TP) for the stock to RM4.44 from RM4.67.

"We anticipate CPO prices to remain at elevated levels in the near term, and to trend down more noticeably in 2022, on the back of better vegetable oil supply prospects amid the absence of fresh demand catalysts in 2022.

"Despite the recent recovery in share prices, the share price performance of plantation companies (represented by Bursa's Plantation Index) still lags behind the CPO price rally due to lingering ESG concerns within the sector and doubts about the sustainability of CPO prices. 

"We believe concerns over ESG issues have already been reflected in the sector’s valuations as: i) most players (particularly, larger-sized players, which have been in the limelight amid ESG issues) have been putting [in] efforts in rectifying these ESG issues; and ii) foreign shareholdings are at multi-year low levels,” Chye added.

At Bursa’s 12.30pm break today, the CPO price for September 2021 had risen RM25 to RM4,650 a tonne, while the price for October 2021 CPO settled unchanged at RM4,493 a tonne.

Meanwhile, the CPO price for November 2021 had fallen RM5 to RM4,385 a tonne.