This article first appeared in The Edge Financial Daily on November 25, 2019

Hap Seng Plantations Holdings Bhd (-ve)

SHARES in Hap Seng Plantations Holdings Bhd (fundamental: 2.25/3, valuation: 1.2/3) rose 13 sen or 7.74% to close at RM1.81 last Friday, with 465,200 shares traded or 13.6 times its 200-day average of 34,047 shares.

The increase, alongside the share price of other plantation firms, was despite a less-than-exciting financial results in the nine-month period ended Sept 30, 2019 (9MFY19) which was released by the group last week.

Net profit in the period shrunk 98.77% to RM102,000 from RM23.03 million — largely because of lower average selling price of crude palm oil and palm kernel, despite higher sales volume of both products.

The lower average price, which hurt margins, also resulted in the revenue largely unchanged at RM293.74 million versus RM294.66 million in 9MFY18.

The group is looking forward to better selling prices, with the implementation of biodiesel mandates in Malaysia and Indonesia to support demand, coupled with lower industry production anticipated.