Ta Ann Holdings Berhad’s (TAANN) trading catalyst is seen as having a positive sentiment towards CPO prices. Recently, the CPO price has trended more positively above the RM4,000 range on the back of lower production and MSSB believes the demand may be picking up on the back of recovery tone in China, after the rebound in China PMI.
Malacca Securities (MSSB) today (Apr 8) said they believe the CPO price may be supported going forward.
Potential greater plywood contribution from the Japanese market. MSSB believes the plywood division is on a sequential improvement in plywood ASP since 2H23 due to higher sales volume amid subsiding inventory levels from importers.
Relatively undervalued when compared with peers. TAANN currently has an indicated P/E of 9x based on the last closing price and the FY24f consensus adjusted EPS of RM0.46, which is a discount to the peer average of 14.7x. (Source: Bloomberg)
Dividend yield of 6% (vs peers of 2.5%) is looking attractive for long term investors too.
Technical Outlook
Share price has been experienced a breakout above RM4.10 and closed at RM4.12. As the technical readings are positive, MSSB expects follow-through buying interest to be seen in the near term, targeting RM4.45-4.50, with a LT target at RM4.60. Support is set around RM4.00-4.05, with a cut loss set around RM3.95.
TAANN manufactures and sells plywood, sawn timber, logs, and timber products. The Company also provides reforestation and plantation services.
