According to news reports, Lembaga Tabung Haji (LTH) has conditionally accepted a

proposal by an Indonesia-based company to buy its 95% stake in PT TH Indo Plantations

(THIP). LTH said that it first received a proposal to acquire its stake in THIP in February
2012.
The disposal price of the oil palm estates in Indonesia was not disclosed. We estimate that
the disposal proceeds would be about RM2.1bil based on a conservative assumption of
RM30,000/ha and the disposed stake of 95%.
We are puzzled at the rationale for the disposal of LTHs oil palm estates in Indonesia.
Although TH Plantations balance sheet is small currently, it has always been a subject of
discussion that LTHs Indonesian plantation assets would be injected into TH Plantations
one day.
Currently, TH Plantations manages LTHs oil palm estates in Indonesia. The management fee
was about RM25.8mil in FY11, which accounted for 6% of group turnover.
It was not disclosed if the TH Plantations would continue to manage the oil palm estates in
Indonesia under the new owner. However, we reckon that it would be in the best interest if
the new owner if TH Plantations were to continue. This is due to the large size of the estates,
which would make it difficult for the new owner to look for new estate managers and
workers.
Also, we believe that without the management fee, TH Plantations net profit would fall
significantly.
Presently, LTHs plantation landbank in Riau, Indonesia amount to about 83,878ha. Planted
area is roughly 73,514ha. Out of the planted area of 73,514ha, approximately 63% of the oil
palm trees are between 10 to 19 years old while another 28% is between four to nine years
old. The balance 8% of the oil palm trees are three years and below.
We would be seeking more information from TH Plantations management on the details of
the proposed disposal of LTHs oil palm estates in Indonesia. Maintain a BUY on TH
Plantations for now.

PLANTATION


TH PLANTATIONS
(THP MK, THPB.KL) 3 April 2012

LTH to sell oil palm estates in Indonesia?
Company report
BUY
Gan Huey Ling, CFA
gan-huey-ling@ambankgroup.com
603 2036 2305
Price: RM2.85
Fair Value: RM3.25
Rationale for report: Company update

































PP12260/06/2012(030110)
YE to Dec FY11 FY12F FY13F FY14F


EPS (sen) 24.5 24.9 25.6 26.3
PE (x) 11.6 11.5 11.1 10.9

Source : AmResearch

Published by
AmResearch Sdn Bhd (335015-P)
(A member of the AmInvestment Bank Group)
15t h Fl oor Bangunan AmBank Gr oup
55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: ( 03) 2070- 2444 ( r esear ch)
Fax: ( 03) 2078- 3162

Printed by
AmResearch Sdn Bhd (335015-P)
(A member of the AmInvestment Bank Group)
15t h Fl oor Bangunan AmBank Gr oup
55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: ( 03) 2070- 2444 ( r esear ch)
Fax: ( 03) 2078- 3162


The information and opinions in this report were prepared by AmResearch Sdn Bhd. The investments discussed or recommended in this
report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a
solicitation to buy any securities. The directors and employees of AmResearch Sdn Bhd may from time to time have a position in or with
the securities mentioned herein. Members of the AmInvestment Group and their affiliates may provide services to any company and
affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that
we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and
reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for
any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgement as of this
date and are subject to change without notice.

For AmResearch Sdn Bhd
Benny Chew
Managing Director
TH Plantations 3 April 2012
AmResearch Sdn Bhd 2



TABLE 1 : VALUATION MATRIX

(RM mil) YE Dec FY10 FY11 FY12F FY13F FY14F

Revenue (RMmil) 341.9 434.8 470.4 482.7 502.7
Net Profit (RMmil) 89.5 124.8 126.6 130.2 133.9
EPS (sen) 18.3 24.5 24.9 25.6 26.3
EPS growth (%) 66.1 33.8 1.4 2.8 2.7
Consensus net (RMmil) 115.5 106.2 112.1 112.1
DPS (sen) 12.5 12.5 13.0 14.0 15.0
PE (x) 15.6 11.6 11.5 11.1 10.9
EV/EBITDA (x) 7.7 6.5 5.8 5.4 5.1
Div yield (%) 4.4 4.4 4.6 4.9 5.3
ROE (%) 18.5 21.9 19.3 18.2 17.3
Net Gearing (%) 7.0 na na na na

Source : AmResearch