Kimeng: 28 feb Sime (hold)

> A stellar first half, driven by plantation, industrial & motor
> This is Sime Darby's first set of results post its merger with Kumpulan
> Guthrie and Golden Hope. The company (SDB, formerly known as Synergy
> Drive) reported H108 EPS of 24.5 sen (+2%) on a 22% rise in revenue.
> Excluding exceptional items, core EPS was 24 sen (+61%), buoyed by
> stronger profits at the plantation, industrial (formerly heavy
> equipment) and motor divisions. The exceptional income of RM485m in H107
> was derived mainly from the sale of Jaya Holdings shares and properties.
> Plantation was the star performer, with a 103% jump in EBIT, thanks to
> higher CPO prices (+67%). The industrial division posted an 18% rise in
> EBIT, helped by higher sales to the mining sector. Motor staged a sharp
> turnaround, thanks to a recovery in Malaysia. However, property saw
> lower profits due to delays in launches as a result of its rebranding
> exercise and the absence of land sales. An interim gross dividend of 5.0
> sen was declared.
>
> Above fair value; HOLD
> We recommend a HOLD on SDB as its SOTP valuation is around RM11.00,
> below its current share price.