First Resources Initiating Coverage CIMB

PlantationsSINGAPORE
May 21, 2013
COMPANY NOTE
First Resources Ltd

FR SP / FRLD.SI
Market Cap
AvgDaily Turnover
Free Float
Current
S$1.90
Target
S$2.22
US$2,396m
US$3.41m
31.3%
Previous Target
S$3,010m
S$4.22m
1,584 m shares
Up/downside
LONG TERM
NA
16.9%
Conviction|
Notes from the Field
SHORT TERM(3 MTH)
Elixir of youth
First Resources' 1Q13 results cement our conviction of its superior
operating efficiency over peers. Its young estates offer strong FFB
prospects, partially mitigating lower CPO prices. Low production costs
render it one of the most profitable planters under our coverage.
We initiate coverage with an
Outperform and S$2.22 target price,
based on 12.3x CY14 P/E (1SD above
its 4-year mean). Re-rating catalysts
are expected from higher FFB
production and potential dividend
uplifts when free cash flows
strengthen from 2014.
LEE Wen Ching

T(65) 6210 8604
Ewenching.lee@cimb.com
Ivy NG Lee Fang, CFA

T (60) 3 2084 9697
E ivy.ng@cimb.com
Company Visit
Expert Opinion
Channel Check
Customer Views
Strong FFB growth partially

offsets lower CPO prices
We anticipate palm oil

prices to remain volatile
this year. However the
softer CPO price will
encourage increased
usage of palm oil for food
and non-food uses.
First Resources
Price Close
135
128
122
115
108
102
95
88
82
75
2.0
1.8
1.6
Vol m
15
1.4
10
5
May-12
Aug-12
Source: Bloomberg
Nov-12
Feb-13
52-week share price range

1.90
2.20
1.54
2.22
Current
Target
We expect additional income from its

refinery expansion. First Resources
currently refines just half of its CPO
output. With a new 600,000-tonne
refinery coming on stream in 2H13,
it will be able to refine its entire CPO
production. This will allow the group
to sell its palm products at higher
prices as refined palm products
attract
lower
export
taxes.
Downstream expansion should also
help the group cope better with
excess supply or high inventories
than pure upstream planters.
Transforming into a cash

cow
Free cash flows should improve
markedly in FY14 when capex scales
down and operating cash flows
improve. We think there is room for
higher dividend payouts if no M&A
opportunities surface.
Financial Summary
Relative to FSSTI (RHS)
2.2
Amid our expectations of lower CPO

prices this year, we advocate stocks
that offer strong FFB growth
prospects to cushion lower ASPs and
higher production costs. First
Resources fares well in this regard.
Its estates are nine years old on
average, and are just entering the
prime of their productivity cycle.
FFB growth from these estates,
coupled with its recent acquisition of
brownfield estates, should jack up its
FFB output by 10% in FY13, we
estimate, although group FFB yields
may
be
diluted
by
the
newly-acquired estates in the near
term.
Additional income stream

from refinery
Revenue (US$m)
Operating EBITDA (US$m)
Net Profit (US$m)
Core EPS (US$)
Core EPS Growth
FD Core P/E (x)
DPS (US$)
Dividend Yield
EV/EBITDA (x)
P/FCFE (x)
Net Gearing
P/BV (x)
Recurring ROE
% Change In Core EPS Estimates
CIMB/consensus EPS (x)
Dec-11A
494.6
333.0
196.4
0.11
53.3%
14.29
0.025
1.65%
6.92
253.7
5.3%
2.51
20.9%
Dec-12A
603.4
370.8
237.1
0.14
20.5%
11.40
0.030
1.98%
6.73
9.5
11.5%
2.17
21.1%
Dec-13F
556.6
319.7
200.0
0.13
(8.3%)
11.98
0.038
2.50%
8.12
43.1
10.5%
1.92
17.0%
0.95
Dec-14F
669.8
374.1
232.2
0.15
16.1%
10.32
0.044
2.91%
6.85
20.7
6.2%
1.70
17.5%
Dec-15F
806.1
447.0
283.8
0.18
22.2%
8.44
0.054
3.55%
5.58
14.0
0.3%
1.49
18.8%
0.93
0.97
SOURCE: CIMB, COMPANY REPORTS

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT.
Designed by Eight, Powered by EFA
First Resources Ltd

May 21, 2013
PEER COMPARISON
Research Coverage
Bloomberg Code
WIL SP
IFAR SP
GGR SP
FR SP
Wilmar International
Indofood Agri Resources
Golden Agri-Resources
First Resources Ltd
Market
SG
SG
SG
SG
Recommendation
OUTPERFORM
UNDERPERFORM
NEUTRAL
OUTPERFORM
Rolling P/BV (x)
Mkt Cap US$m

17,266
1,245
5,826
2,396
Price
3.39
1.09
0.57
1.90
Jan-11
Jan-12
Target Price
3.74
1.02
0.56
2.22
Upside
10.3%
-6.4%
-1.8%
16.9%
Rolling FD P/E (x)
3.5
25
3.0
20
2.5
2.0
15
1.5
10
1.0
5
0.5
0.0
Jan-09
Jan-10
Jan-11
Jan-12
0
Jan-09
Jan-13
Jan-13
First Resources Ltd
First Resources Ltd
Peer Aggregate: P/BV vs Recurring ROE
Peer Aggregate: FD P/E vs FD EPS Growth
2.5
16%
2.0
13%
1.5
10%
1.0
6%
0.5
3%
0.0
Jan-09
Jan-10
0%
Jan-10
Jan-11
Rolling P/BV (x) (lhs)
Jan-12
Jan-13
16
40%
14
31%
12
23%
10
14%
5%
-4%
-13%
-21%
0
Jan-09
Jan-14
Recurring ROE (rhs)
-30%
Jan-10
Jan-11
Jan-12
Rolling FD P/E (x) (lhs)
Jan-13
Jan-14
Fully Diluted EPS Growth (rhs)
Valuation
First Resources Ltd
P/E (FD) (x)

Dec-12
Dec-13
13.93
13.92
11.68
18.13
14.15
17.09
10.11
11.98
Dec-14
12.38
16.07
14.16
10.32
Dec-12
1.20
0.89
0.68
2.17
P/BV (x)
Dec-13
1.12
0.85
0.66
1.92
Dec-14
1.05
0.80
0.64
1.70
Dec-12
13.25
6.86
8.96
6.73
EV/EBITDA (x)
Dec-13
13.12
8.27
11.34
8.12
Dec-14
11.97
8.57
9.07
6.85
Dec-14
9.0%
5.1%
4.7%
17.5%
Dividend Yield
Dec-12
Dec-13
1.85%
1.47%
0.00%
0.00%
1.93%
1.20%
1.98%
2.50%
Dec-14
1.65%
0.00%
1.45%
2.91%
Growth and Returns
First Resources Ltd
Fully Diluted
Dec-12
-22.5%
-29.6%
-69.3%
20.1%
EPS Growth
Dec-13
Dec-14
0.1%
12.4%
-35.6%
12.8%
-17.2%
20.7%
-15.6%
16.1%
Recurring ROE
Dec-12
Dec-13
8.4%
8.6%
7.8%
4.8%
4.9%
4.0%
21.1%
17.0%

Calculations are performed using EFA Monthly Interpolated Annualisation and Aggregation algorithms to December year ends
First Resources Ltd

May 21, 2013
BY THE NUMBERS
Share price info

Share pxperf. (%)
1M
3M
12M
Relative
1.8
-7.7
-7.6
Absolute
6.7
-2.6
Major shareholders
Eight Capital Inc
16.2
% held
63.2
P/BV vs Recurring ROE
FD Core P/E vs FD Core EPS Growth
3.0
25.0%
2.5
20.8%
2.0
16.7%
1.5
12.5%
1.0
8.3%
4.2%
FMR
6.3
0.5
DB Intl Trust Singapore
5.6
0.0
Jan-09
0.0%
Jan-10
Jan-11
Jan-12
Jan-13
Rolling P/BV (x) (lhs)
Jan-14
Recurring ROE (rhs)
20
18
16
14
12
10
8
6
4
2
0
Jan-09
60%
52%
44%
36%
28%
20%
12%
4%
-4%
-12%
-20%
Jan-10
Jan-11
Jan-12
Rolling FD Core P/E (x) (lhs)
Jan-13
Jan-14
FD Core EPS Growth (rhs)
Profit & Loss
Lower FY13 earnings on

account of lower CPO prices,
partially offset by higher
volume
(US$m)
Total Net Revenues
Gross Profit
Operating EBITDA
Depreciation And Amortisation
Operating EBIT
Total Financial Income/(Expense)
Total Pretax Income/(Loss) from Assoc.
Total Non-Operating Income/(Expense)
Profit Before Tax (pre-EI)
Exceptional Items
Pre-tax Profit
Taxation
Exceptional Income - post-tax
Profit After Tax
Minority Interests
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit
Recurring Net Profit
Fully Diluted Recurring Net Profit
Dec-11A
494.6
345.9
333.0
(23.5)
309.5
(27.8)
0.0
0.0
281.7
Dec-12A
603.4
382.2
370.8
(25.3)
345.5
(19.2)
0.0
0.0
326.3
Dec-13F
556.6
389.6
319.7
(27.5)
292.2
(21.5)
0.0
0.0
270.7
Dec-14F
669.8
468.9
374.1
(33.7)
340.4
(21.5)
0.0
0.0
318.9
Dec-15F
806.1
564.3
447.0
(35.9)
411.0
(21.5)
0.0
0.0
389.5
281.7
(75.8)
326.3
(78.1)
270.7
(59.5)
318.9
(73.4)
389.5
(89.6)
205.9
(9.5)
248.2
(11.1)
211.1
(11.1)
245.6
(13.4)
299.9
(16.1)
196.4
167.0
167.0
237.1
210.2
210.2
200.0
200.0
200.0
232.2
232.2
232.2
283.8
283.8
283.8
Cash Flow
Higher operating cash inflows

and lower investing cash
outflows to boost free cash
flows from FY14
(US$m)
EBITDA
Cash Flow from Invt. & Assoc.
Change In Working Capital
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow
Net Interest (Paid)/Received
Tax Paid
Cashflow From Operations
Capex
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow
Cash Flow From Investing
Debt Raised/(repaid)
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid
Preferred Dividends
Other Financing Cashflow
Cash Flow From Financing
Dec-11A
333.0
Dec-12A
370.8
Dec-13F
319.7
Dec-14F
374.1
Dec-15F
447.0
(35.6)
(29.5)
17.0
(3.4)
(4.1)
(40.2)
(29.1)
(51.9)
176.3
(158.3)
(49.1)
(22.7)
(73.0)
196.5
(174.8)
(0.0)
(21.5)
(59.5)
255.6
(200.0)
(0.0)
(21.5)
(73.4)
275.9
(160.0)
0.0
(21.5)
(89.6)
331.8
(160.0)
(40.0)
(198.3)
31.5
17.8
(55.3)
(230.2)
285.2
0.1
0.0
(200.0)
0.0
0.0
0.0
(160.0)
0.0
0.0
0.0
(160.0)
0.0
0.0
(36.7)
(47.5)
(60.0)
(69.7)
(85.1)
11.2
23.8
(10.1)
227.7
0.0
(60.0)
0.0
(69.7)
0.0
(85.1)
First Resources Ltd

May 21, 2013
BY THE NUMBERS
Balance Sheet
Net gearing remains

conservative at 11%
(US$m)
Total Cash And Equivalents
Total Debtors
Inventories
Total Other Current Assets
Total Current Assets
Fixed Assets
Total Investments
Intangible Assets
Total Other Non-Current Assets
Total Non-current Assets
Short-term Debt
Current Portion of Long-Term Debt
Total Creditors
Other Current Liabilities
Total Current Liabilities
Total Long-term Debt
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities
Total Non-current Liabilities
Total Provisions
Total Liabilities
Shareholders' Equity
Minority Interests
Total Equity
Dec-11A
210
51
39
17
317
275
0
65
843
1,183
40
48
53
35
176
171
0
224
395
0
572
885
44
928
Dec-12A
405
62
58
36
561
321
0
107
942
1,370
40
0
59
31
131
174
324
145
643
0
773
1,106
51
1,158
Dec-13F
400
66
39
36
541
394
0
107
1,042
1,543
40
0
61
31
133
174
324
145
643
0
775
1,246
62
1,309
Dec-14F
447
74
47
36
603
420
0
107
1,142
1,669
40
0
74
31
145
174
324
145
643
0
788
1,409
76
1,485
Dec-15F
533
84
56
36
709
444
0
107
1,242
1,793
40
0
89
31
160
174
324
145
643
0
803
1,608
92
1,699
Dec-11A
49.9%
28.3%
67.3%
(0.033)
0.60
10.64
26.9%
18.7%
17.48
70.9
121.7
26.8%
28.9%
Dec-12A
22.0%
11.3%
61.5%
(0.084)
0.70
18.02
23.9%
20.0%
20.85
80.5
93.1
23.9%
24.0%
Dec-13F
(7.8%)
(13.8%)
57.4%
(0.087)
0.79
13.57
22.0%
30.0%
24.26
105.9
131.7
16.9%
16.5%
Dec-14F
20.3%
17.0%
55.9%
(0.058)
0.89
15.81
23.0%
30.0%
23.39
78.0
122.5
17.8%
17.6%
Dec-15F
20.4%
19.5%
55.4%
(0.003)
1.01
19.09
23.0%
30.0%
23.39
78.0
122.5
19.8%
19.3%
Dec-11A
132,251
85,699
22.2
19.8%
919
Dec-12A
146,403
98,181
23.0
14.2%
882
Dec-13F
173,003
122,888
19.5
10.4%
822
Dec-14F
191,003
134,309
21.1
18.2%
815
Dec-15F
209,003
148,461
22.1
16.2%
838
Key Ratios
Revenue Growth
Operating EBITDA Growth
Operating EBITDA Margin
Net Cash Per Share (US$)
BVPS (US$)
Gross Interest Cover
Effective Tax Rate
Net Dividend Payout Ratio
Accounts Receivables Days
Inventory Days
Accounts Payables Days
ROIC (%)
ROCE (%)
Key Drivers
Planted Estates (ha)
Mature Estates (ha)
FFB Yield (tonnes/ha)
FFB Output Growth (%)
CPO Price (US$/tonne)
First Resources Ltd

May 21, 2013
Elixir of youth
1. COMPANY BACKGROUND
Table of Contents
1. COMPANY BACKGROUND
p.5
2. OUTLOOK
p.8
3. RISKS
p.16
4. FINANCIALS
p.17
5. VALUATION AND RECOMMENDATION
p.21
Notes from the Field
At current prices, demand

is expected to be
well-supported, backed by
consumption growth from
emerging markets.
First Resources
1.1 Integrated palm-oil producer in Indonesia

First Resources is an integrated palm-oil producer based in Indonesia, with
operations spanning from planting and milling to refining. It owns 137,476 ha
of nucleus estates and 12 CPO mills with an operating capacity of 4.05m tonnes
per annum. On top of this, it owns 21,261 ha of plasma estates, which represent
13% of its total estates.
First Resources ranks 10th in our plantations universe in terms of area of
planted estates and mature estates, but is the fifth-largest of listed
Indonesia-based planters. The size of its planted estates trails that of
behemoths such as Sime Darby (552,805 ha) and Golden Agri-Resources
(366,914 ha).
Besides upstream operations, First Resources has a 250,000-tonne p.a. refinery
which processes about half its CPO production (total of 525,831 tonnes in FY12)
into higher-value refined products such as olein and biodiesel.
CPO sales form the bulk of its revenue currently, but its sales mix should
increasingly shift towards refined palm oil as new refining capacity comes on
stream. A new 600,000-tonne refinery will be commissioned in 2H13, allowing
First Resources to processes its entire CPO production in-house. This facility
will also give First Resources the flexibility to refine third-party CPO when
margins are favourable.
Figure 1: First Resources participation in the palm-oil value chain (as at Dec 12)
SOURCES: CIMB, COMPANY REPORTS
1.2 Beginnings
Established in 1992, First Resources started planting that year and
commissioned its first palm-oil mill in 1998. It has been expanding its estates
rapidly since. It was listed on the Singapore Exchange in 2007. Over the past
five years, average new planting rate was over 11,000 ha p.a. The group now
manages 158,737 ha of plantations, runs 12 mills and operates an integrated
value chain. It started refining in 2010 when it commissioned its refinery,
fractionation and biodiesel plants. Although 70% of its planted mature oil-palm
estates and downstream facilities are located in the Riau region, new planting
over the past five years had mostly concentrated in West and East Kalimantan.
First Resources Ltd

May 21, 2013
Figure 6: Plantations in the Riau, East and West Kalimantan provinces of Indonesia
Figure 7: Corporate milestones

2012
2011
2010
2009
2008
2007
2006
2005
2003
2002
2001
1998
1992
Achieved more than 146,406 hectares plantation under management

Commissioned 10th and 11th palm oil mill
Acquired 4,027 hectares of plantation asset in Riau province
Achieved more than 130,000 hectares plantation under management
Commissioned 9th palm oil mill
Acquired 100,000 hectares of landbank in East Kalimantan province
Commissioned refinery, fractionation and biodiesel plants
Began processing activities to further add value to crude palm oil produced in-house
Issued inaugural USD Convertible Bond (US$100 million), listed on Singapore Exchange
Commenced new plantings in West Kalimantan province
Achieved more than 100,000 hectares of plantation under management
Commissioned 8th palm oil mil
Acquired 90,000 hectares of landbank in West Kalimantan province
Listed on the Singapore Exchange
Issued second Rupiah bonds (Rp 500 billion), listed on the Jakarta Stock Exchange
Obtained international credit ratings from Standard & Poors, Moody's and Fitch
Issued inaugural USD 144A-registered bonds (US$160 million), listed on the Singapore Exchange
Commissioned 5th and 6th palm oil mills
Achieved more than 50,000 hectares of plantation under management
Issued inaugural Rupiah bonds (Rp350 billion), listed on the Surabaya Exchange
Opened Research Centre and Training School
Commissioned 3rd palm oil mill
Commissioned 2nd palm oil mill
Commissioned 1st palm oil mill
Group was established and new plantings began
First Resources is 63.2% owned by Eight Capital, an investment vehicle of the

Fangiono family. The group is managed by brothers Ciliandra Fangiono, CEO,
and Cik Sigih Fangiono, Deputy CEO. Mr Ciliandra Fangiono oversees
strategies and funding while Mr Cik Sigih Fangiono oversees day-to-day
operations.
The stocks trading liquidity has improved since its 2007 listing. Free float has
increased from 17.5% during IPO to 31.3%, as major shareholders addressed
the investment communitys calls to improve free float by placing out treasury
shares and issuing convertible bonds. The group issued convertible bonds in
6
First Resources Ltd

May 21, 2013
2009 to raise US$100m, due in Sep 14 (5.625% p.a. payable semi-annually;

conversion price of S$1.24735). It has since exercised its right to redeem all
outstanding CBs not converted into shares. There are no outstanding CBs.
2. OUTLOOK
2.1 Young estates behind production growth
First Resources young estates are its biggest strength. An average plantation
age of nine years renders it the planter with the second-youngest estates under
our coverage, after BW Plantations. About 24% of its trees are immature (0-3
years old), 32% young (4-7 years old), and 36% in the prime production age of
8-17 years old. Oil-palm trees require three years or so to mature, and do not
reach their peak production age for fresh fruit bunches until eight years after
planting. Their production of fresh fruit bunches gradually declines after the
age of 17.
First Resources young estates can support higher FFB production over the next
few years with manageable increases in production costs, in our view.
We forecast 10% FFB output growth for FY13 from existing estates, led by new
mature areas coming on stream. Higher volumes from nucleus estates should
shield the group from the impact of lower CPO prices.
Figure 8: Some 56% of its oil-palm estates are below seven

years old
Figure 9: Productivity of oil-palm trees is highest between ages

8-17
Title:
Source:
18 years and
above, 9%
Immature, 24%
Please fill in the values above to have them entered in your report
8-17 years, 36%
4-7 years, 32%
First Resources Ltd

May 21, 2013
Figure 10: Planted estates and new plantings since 1990

ha
ha
160,000
20,000
18,000
140,000
16,000
120,000
14,000
100,000
12,000
80,000
10,000
8,000
60,000
6,000
40,000
4,000
20,000
2,000
1990
1995
2000
Total estate area (LHS)
2005
2010
New planted area (RHS)
2.2 Acquisition growth an additional kicker

In addition to growth from the coming of age of its estates, First Resources
production should be boosted by acquisitions. Some 12,600ha of additional
mature estates will be coming on stream in FY13 from its Riau and West
Kalimantan acquisitions.
To recap, the group completed the acquisition of PT Gerbang Sawit in Oct 12 for
US$31.2m and Lynhurst Investment for US$103m in Feb 13. PT Gerbang Sawit
owns 3,500 ha of mature palm-oil estates and 4,000 ha of unplanted land bank
in Riau. Lynhurst owns 8,600 ha of oil-palm estates and 11,500 ha of unplanted
area. The group paid EV/ha of around US$12,000 for Lynhursts estates and
US$10,000 for Gerbang Sawits planted estates, which we deem fair and in line
with market prices.
Its newly-acquired estates produce lower FFB yields, estimated at 10 tonnes/ha
vs. nucleus yields of 22.4 tonnes/ha. But management expects higher yields
towards the groups average within 36 months through better agri practices.
We forecast a decline in FFB yields for the group, stemming purely from its
newly-acquired estates, from 23tonnes/ha in FY12 to 19.5tonnes/ha in FY13.
But the lower yields should be compensated by a larger area of mature estates,
leading to higher FFB production.
Figure 11: Area of planted estates
Figure 12: Area of mature estates
250,000
20%
200,000
Title:
Source:
160,000
18%
30%
140,000
25%
Please fill in the values above to have them entered
in your report
16%
120,000
14%
150,000
20%
100,000
12%
10%
100,000
80,000
8%
15%
60,000
10%
6%
40,000
50,000
4%
5%
20,000
2%
-
0%
Dec-11A
Dec-12A
Dec-13E
Planted Estates (ha)
Dec-14E
Dec-15E
0%
Dec-11A
% growth
Dec-12A
Dec-13E
Mature Estates (ha)
Dec-14E
Dec-15E
% growth
First Resources Ltd

May 21, 2013
Figure 13: FFB production
Figure 14: CPO production
m tonnes
'000 tonnes
3.5
Title:
Source:
900.0
800.0
3.0
700.0
2.5
600.0
2.0
500.0
1.5
400.0
300.0
1.0
200.0
0.5
100.0
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
2.3 Yielding more than its peers

First Resources operating metrics tower above its peers. Its CPO extraction
rate is the highest among planters under our coverage, at 23.3% vs. 21.6%, on
average. We believe this could be due to the close proximity of its estates to its
mills, which ensures its fresh fruit bunches arrive at the mills with minimal
spoilage. In addition, a large portion (86%) of its fruits processed in FY12 came
from its own estates, allowing for better quality control (FFB harvested at the
point of their maximum oil content).
Its FFB yield of 23 tonnes/ha is the second-highest and well above the
industrys average 19.8 tonnes/ha. We attribute this to: 1) the group's superior
age profile; 2) high mineral soil content plus rainfall of 2.1 metres per annum in
Riau, where most of its estates are located, both ideal for oil-palm trees; and 3)
superior seeds used for planting as well as the adoption of industry best
practices.
Figure 15: Oil extraction rates
Figure 16: FFB yields (tonnes/ha)
23.5%
25.0
23.0%
Title:
Source:
23.0
22.5%
21.0
22.0%
21.5%
19.0
21.0%
17.0
20.5%
20.0%
15.0
2.4 Forward sales locked in higher CPO prices

Spot CPO prices are currently 24% lower than a year ago as higher palm-oil
stocks and expectations of record soybean supplies dampen prices. The good
9
First Resources Ltd

May 21, 2013
news is that First Resources has sold forward part of its CPO for the year. As a
result, it was able to book higher CPO prices in 1Q13 against the previous year,
defying the industrys downtrend. The group was also able to outperform its
peers in net-profit growth (+28%).
We are expecting Rotterdam CPO prices to trend lower to an average of US$910
in 2013, before rising to US$950 in 2014 and US$980 in 2015. We expect CPO
prices to weaken in 2013 from a higher palm-oil stockpile, lower biodiesel
demand in Europe as governments scale back their mandates, stronger
palm-oil supply from Malaysia and expectations of soybean bumper harvests.
There is potential for CPO prices to move up in 2Q as palm oil enters its low
production cycle. But this may not last as record soybean crops are expected to
enter the market in 3Q. After which, there could be a price recovery in late 4Q
from slower palm-oil output growth and potentially higher biodiesel mandates
in Malaysia and South America.
Figure 17: Rotterdam CPO prices
Figure 18: Historical CPO ASP for First Resources

US$/tonne
US$/tonne
1,400
Title:
Source:
1000
1,200
919
882
800
756
706
1,000
600
800
600
540
400
400
200
200
0
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
2008
2009
SOURCES: CIMB, BLOOMBERG
2010
2011
2012
2.5 Sensitivity analysis

As a price-taker, First Resources profits are subject to international CPO price
movements. We estimate that every 10% change in CPO prices could swing its
core net profit by 17%.
Figure 19: Earnings sensitivity to CPO prices
CPO price (US$)

FY14 core net profit (US$m)
% chg in net profit
-20%
760
153.2
-34%
-10%
855
192.7
-17%
% chg in CPO price

Base case
950
232.2
0%
+10%
1045
271.7
17%
+20%
1140
311.2
34%
The group's earnings are also sensitive to its FFB yields as these will affect its
output. We estimate that every 1 tonne/ha change in yields could add or
subtract 8% from the group's core net profits.
10
First Resources Ltd

May 21, 2013
Figure 20: Earnings sensitivity to FFB yields

-2 tonnes/ha -1 tonne/ha
Overall FFB yield
19.1
20.1
FY14 core net profit (US$m)
194.8
213.5
% chg in net profit
-16%
-8%
chg in FFB yield (tonnes/ha)

Base case
+1 tonne/ha +2 tonne/ha
21.1
22.1
23.1
232.2
250.8
269.5
0%
8%
16%
We regressed stock prices correlations to CPO prices since 2007 and found that
First Resources share price is relatively insulated from CPO price volatility,
compared with its peers. Its correlation coefficient of 0.44 is the second-lowest
in our universe, and is below the sectors average of 0.67. That said, there could
be other explanations for the variance, including differences in the planters
business models.
Figure 21: Correlation coefficients for planters' share prices and CPO prices
0.85
0.84
0.80
0.77
0.73
0.73
0.71
0.64
0.61
0.52
0.44
0.42
SOURCES: CIMB, BLOOMBERG
2.6 Higher yields boost operating efficiency

First Resources operating efficiency has allowed the group to produce CPO at
lower costs per tonne than its peers. This is critical for planters
competitiveness in times of lower CPO prices, such as today. As a result of this
and its better selling prices against peers, the group enjoys higher profitability
for its estates. First Resources generated the second-highest operating profit
per mature ha among its listed peers in FY12, testifying to its strong
management and estates youthfulness.
11
First Resources Ltd

May 21, 2013
Figure 22: First Resources' EBITDA per mature ha (US$/ha)
Figure 23: First Resources' cash costs per mature ha (US$/ha)
US$/ha
US$/ha
4,000
1,600
3,500
1,400
3,000
1,200
2,500
1,000
2,000
800
1,500
600
1,000
400
500
200
Title:
Source:
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Figure 24: First Resources has the second-highest profit per mature ha among peers
(US$)
(FY12/12 - US$ per ha)
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
IOI*
FR
KLK**
BAL
SIME*
GGR
HAPL
WIL
FGV
IFAR
KAGR
*FY6/12; FY9/12
2.7 Sizeable landbank for expansion

Indonesias plans to limit companies estate expansion to 100,000ha will not
affect First Resources growth plans as the group has more than sufficient
landbank to underwrite its future growth via new plantings. It owns 300,000
ha: 158,737 ha planted and 141,263 ha unplanted.
It has a planting target of 15,000-20,000 ha of oil palms per year, and aims to
expand its planted area to 200,000 ha within five years. This should raise its
CPO production to 1m tonnes each year. When it reaches this milestone,
management will take stock and decide whether to expand downstream or
upstream via estate expansion.
12
First Resources Ltd

May 21, 2013
Figure 25: Distribution of planted estates as at Dec 12 (ha)
Figure 26: Distribution of land bank (ha)

Title:
Source:
West Kalimantan,
13,275
West Kalimantan,
100,000
East Kalimantan,
30,000
Riau, 110,000
Riau, 103,128
East Kalimantan,
90,000
2.8 Now an integrated palm producer, from downstream

expansion
First Resources expansion downstream has transformed it into an integrated
palm-oil producer with structurally higher profit margins. Refining not only
adds to margins but also integrates its operations.
First Resources forayed into refining by commissioning its 250,000-tonne
processing plants in 2010. These refinery, fractionation and biodiesel plants
have enabled the group to refine part of its CPO production into higher-value
products such as RBDPO (refined bleached deodorised palm oil), PFAD (palm
fatty acid distillates), RBD olein, RBD stearin, biodiesel, crude glycerine, PKE
(palm kernel expellers) and PKO (palm kernel oil).
As part of its downstream expansion, a new 600,000-tonne refinery will be
commissioned in 2H13. This will lift its refining capacity to 850,000 tonnes,
allowing First Resources to refine all of its CPO in-house and even refine third
parties CPO when margins are favourable.
2.9 Becoming a cash cow

First Resources is on the cusp of a transformation into a cash cow. Having
planted the seeds of growth in recent years, it is quite ready to reap the fruits of
its labour. Earnings growth should be powered by higher FFB and palm-oil
production as its young estates approach maturity. At the same time, capex will
taper off from FY14 once its refinery expansion is completed. Higher operating
cash inflows and lower investing outflows should strengthen its free cash flows.
By our projections, the group will be able to continue funding its capex purely
with operating cash flows.
We forecast a build-up of cash from US$405m in FY12 to US$533m in FY15.
Our forecasts assume 30% dividend payouts, though there could be room for
higher payouts in the absence of M&As. The group can improve its ROEs by
returning cash to shareholders.
13
First Resources Ltd

May 21, 2013
Figure 28: strengthening free cash flows
Figure 27: Operating cash inflows to accelerate while capex

eases
US$m
US$m
350.0
Title:
Source:
200.0
180.0
300.0
160.0
250.0
140.0
200.0
120.0
100.0
150.0
80.0
100.0
60.0
50.0
40.0
Dec-11A
Dec-12A
Dec-13E
Dec-14E
20.0
Dec-15E
Operating cash flow
Dec-11A
Capex
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Figure 30: Dividend payouts, now at 30%, could be higher in the

absence of M&As
Figure 29: Cash to pile up to US$533m by FY15

US$m
US cts
600
6.0
Title:
Source:
500
5.0
400
4.0
300
3.0
200
2.0
100
1.0
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Figure 31: SWOT analysis

Strengths
Young estates support organic growth
FFB yields above industry average
Oil extraction rate above industry average
Vertically integrated business model
Opportunities
Sufficient landbank for new plantings
Increased profit pool from midstream expansion
Operating leverage from ongoing expansion
Weaknesses
Geographical concentration in Indonesia
Opex vulnerable to inflation in Indonesia, e.g. wage hikes
Threats
Lower CPO prices
Weather risk
Overcapacity of global refining industry
Competition from Malaysian planters and refiners
14
First Resources Ltd

May 21, 2013
3. RISKS
3.1 CPO prices and production volumes
Our 3-year EPS CAGR forecast assumes: 1) Rotterdam CPO prices of US$910 in
2013, US$950 in 2014 and US$980 in 2015; 2) a 15% CAGR for FFB production
volumes; and 3) a 40% CAGR for refining volumes. Lower-than-expected CPO
prices or softer production could result in lower profits. We estimate that every
10% fall in CPO prices could dent its net profits by 17%.
3.2 Yield compression

Our volume CAGR hinges on sustainable CPO yields of 4.6-5.2 tonnes/ha for
the next three years, which appear reasonably conservative against its yield of
5.4 tonnes/ha in FY12. CPO yields had receded from 1.5 tonnes/ha in 4M12 to
1.2 tonnes/ha in 4M13 due to tree stress, but this was still within comfort.
Volumes could be at risk if yields fall below our assumptions for reasons such as
biological tree stress and weather risks such as El Nino.
3.3 Wage inflation

First Resources cash costs should increase as a result of Indonesias wage
inflation. Wages constitute 42% of its cash costs. Fortunately, 70% of its estates
are located in Riau, where the wage hikes are more subdued at 13% vs. East
Kalimantans +49%. Wages could play a role in its future expansion plans. Its
diverse landbank across West and East Kalimantan provides options, in our
view.
Figure 32: First Resources cash costs
Maintenance of fixed
assets, 13%
Freight , 5%
Fertilizer, 40%
Wages, 42%
Figure 33: Minimum wage revisions in Indonesia (Rp)

2012
1,238,000
1,177,000
900,000
Riau
East Kalimantan
West Kalimantan
2013
1,400,000
1,752,073
1,060,000
% chg
13%
49%
18%
SOURCES: CIMB, WWW.WAGEINDICATOR.ORG
3.4 Global economies

We expect major economies to grow at a moderate pace in 2013. In the short
term, the euro zones debt woes and weaker economic prospects could continue
to depress CPO prices through lower demand for edible oils and crude oil.
They could also lead to outflows of speculative investment funds from
commodity markets.
3.5 Policy risks

Planters fortunes are closely bound to government policies, not just in their
countries of operations but in competitors and customers markets. Export
15
First Resources Ltd

May 21, 2013
taxes, quotas, price ceilings or any other form of market intervention could
alter the prospects of all industry players along the value chain.
The Malaysian government recently modified the country's palm-oil export tax
to help its downstream sector in late 2012. India has also been revising its
palm-oil import duties to help its domestic refining sector. Any changes in
government export taxes for palm-oil products or import duty structures may
affect trade flows for palm oil.
3.6 Anti-palm oil lobby

The use of palm oil has increasingly run into public opposition in Western
countries, from deforestation resistance and allegations that it can cause health
problems. Palm-oil health warnings have gained much publicity in the US but
are also being disproved by academic research.
The Round Table on Sustainable Palm Oil (RSPO), a non-profit organisation,
was formed in 2004 to help palm-oil producers deal with environmental
charges levied at palm oil by getting their palm oil certified. The initiative
involves developing a certification system for the production of sustainable
palm oil based on a set of principles and criteria to counter concerns over
environmental damage caused by the development of palm oil. A senator in
France recently proposed a tax of 300 per tonne on foods that use palm,
coconut and palm-kernel products, on top of the 100 per tonne tax. This has
been dubbed the "Nutella tax" due to the presence of palm oil in chocolates and
nut spreads. It has been met with protests from Malaysian, Indonesia and food
manufacturers. We understand that France's national assembly has rejected the
proposal.
Nevertheless, if the anti-palm oil campaign gains momentum, CPO demand
could be hurt, thereby widening its price discount to other edible oils.
3.7 Environmentalists and NGOs

Planters are expected to run their operations in a sustainable manner and
comply with environmental regulations. For instance, planters must be careful
not to threaten orang utans and their habitats in the course of land clearing. It
is not uncommon for non-governmental organisations to petition against
planters operations. These could result in legal recourse and disruptions to
their planting.
4. FINANCIALS
4.1 Biological assets
First Resources reports gains from changes in the fair value of its biological
assets typically in the fourth quarter of each year, in compliance with IFRS.
Such gains accounted for 15-39% of its reported net profits in FY09-12, but the
proportion has been steadily declining owing to a faster rate of profit growth.
As these gains are non-operational, we strip them out to derive our core net
profits. First Resources assumes an average value of US$6,709/nucleus ha in
deriving the value of its biological assets, which we find reasonable.
16
First Resources Ltd

May 21, 2013
Figure 34: Biological gains vs. net profits
Figure 35: Reported vs. core net profits

US$m
US$m
250
45%
250
Title:
Source:
200
40%
200
35%
30%
150
25%
150
20%
100
15%
100
10%
50
5%
50
0%
Dec-09A
Dec-10A
Dec-11A
Dec-12A
-
Gain from biological assets
Dec-09A
Dec-10A
Dec-11A
Dec-12A
Reported net profit

Reported net profit
Biological gains / reported net profit (%)
Core net profit
4.2 Higher FFB production to compensate for lower CPO

prices
First Resources net profit CAGR in the last three years was 42%, led by CPO
price inflation (+63% over the three years) and higher FFB production (12%
CAGR). We expect its profit CAGR to moderate to 10% in the next three years
as a result of lower CPO prices, partially buffered by higher FFB volumes.
Rotterdam CPO prices averaged US$998 in 2012. We expect prices to fall to
US$910 in 2013, US$950 in 2014 and US$980 in 2015. This will dampen First
Resources ASPs from US$882 in 2012 to a projected US$822 in 2013, US$815
in 2014 and US$838 in 2015. The groups 2013 ASP would have been lower had
it not locked in forward sales at favourable prices. Higher FFB production from
organic and acquisition growth should help it cope with lower CPO prices.
Figure 36: First Resources' average CPO selling prices
Figure 37: FFB production
US$/tonne
m tonnes
950
Title:
Source:
3.5
900
3.0
850
2.5
800
2.0
750
700
1.5
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
17
Dec-12A
Dec-13E
Dec-14E
Dec-15E
First Resources Ltd

May 21, 2013
Figure 38: Revenue forecasts
Figure 39: Core net profit forecasts
US$m
US$m
800
300
Title:
Source:
750
700
250
650
600
200
550
500
150
450
400
100
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
4.3 Margin compression in FY13

Margins are set to decline for both its plantations and refining operations.
Plantation margins should be affected by lower CPO prices and higher estate
costs, in keeping with a larger mature area and higher labour costs. We project
a decline in EBITDA margins from US$659/tonne in FY12 to US$587/tonne in
FY13, before improving to US$596/tonne in FY14, based on assumed lower
CPO prices and 6-7% p.a. increases in unit production costs.
Refining margins may decline from new capacity added from 2013. Indonesias
refining industry is bracing for an influx of new capacity in response to the
governments revamped palm-oil export tax structure which incentivises
domestic refining. First Resources believes that excess refining capacity could
suppress its refining margins below US$50/tonne in the long run.
Figure 40: Plantations and palm-oil mills: EBITDA/tonne
Figure 41: Refinery and processing: EBITDA/tonne
US$/tonne
US$/tonne
700
200
650
150
600
100
550
50
Title:
Source:
500
0
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
4.4 Low gearing

Net gearing has been conservative at less than 20%. We do not foresee First
Resources taking on substantially higher debt since its capex should taper off
after 2013. Its strengthening cash position will lower its net gearing, in our
18
First Resources Ltd

May 21, 2013
estimation. We assume a decline in its net gearing from 11.5% in FY12 to 10.5%
in FY13 and 6.2% in FY14.
Figure 42: Net debt
Figure 43: Net gearing
US$m
160
16.0%
140
14.0%
Title:
Source:
120
12.0%
100
10.0%
80
8.0%
60
6.0%
40
4.0%
20
2.0%
0.0%
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
4.5 Strengthening cash flows

First Resources has guided for lower capex from FY14 onwards. It had spent
US$175m on biological assets and fixed assets in FY12. It expects to spend
US$200m in FY13 (US$40m for the construction of its new refinery), after
which capex should fall to US$160m in FY14.
Free cash flows should tick up in 2014, backed by improved operating cash
flows (assuming higher CPO prices and FFB volumes) allied with lower capex.
Figure 44: Operating cash flow
Figure 45: Investing cash flow
US$m
US$m
350
Dec-11A
-
300
Title:
Source:
Dec-12A
Dec-13E
Dec-14E
Dec-15E
(50)
250
200
(100)
150
(150)
100
(200)
50
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
(250)
19
First Resources Ltd

May 21, 2013
Figure 46: Financing cash flow
Figure 47: Free cash flow
US$m
US$m
250
200
Title:
Source:
200
150
150
100
100
50
Dec-11A
Dec-12A
Dec-13E
Dec-14E
Dec-15E
50
(50)
(100)
-
Dec-11A
(150)
Dec-12A
Dec-13E
Dec-14E
Dec-15E
4.6 Superior earnings growth

First Resources stands out for its superior earnings-growth prospects in our
coverage universe. In the last three years, its earnings had grown by a 28%
CAGR vs. the industrys 14% average. We project 10.5% for the next three,
which implies further outperformance over the industrys anticipated 0.8%
earnings growth.
First Resources superior outlook can be attributed to: 1) its young estates and
FFB growth, providing buffers to lower CPO prices; 2) additional income
streams from its new refining capacity; and 3) operating metrics such as
above-average FFB and OER yields.
Figure 48: Last three years: EPS CAGR for First Resources vs.
industry
Figure 49: Next three years: EPS CAGR for First Resources vs.
industry
30.0%
12.0%
Title:
Source:
25.0%
10.0%
20.0%
8.0%
15.0%
6.0%
10.0%
4.0%
5.0%
2.0%
0.0%
0.0%
Industry average
First Resources
Industry average
First Resources
5. VALUATION AND RECOMMENDATION

5.1 Relative outperformer
First Resources stock had outperformed its peers in the last 12 months. The
regional sector had shed an average of 8% due to declines in CPO prices.
Singapore-listed planters had given up 6% on average, underperforming the
20
First Resources Ltd

May 21, 2013
STIs 19% gain. First Resources has defied this with a 12% gain: in pole
position.
Figure 50: Planters had underperformed the STI in the last 12 months, but First
Resources was a relative outperformer
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%
Figure 51: Rotterdam CPO prices had fallen 24% over the past 12 months
1,100
1,050
1,000
950
900
850
800
750
700
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
5.2 Strong FFB growth to back further outperformance

We are not bullish on CPO prices, but for investors seeking exposure to this
sector, we would advocate stocks with strong FFB growth prospects. First
Resources offers this. At 14.9% average FFB growth forecast for the next three
years, First Resources should offer the second-highest growth rate in the sector.
All else being equal, this implies its earnings should outperform the sectors, as
should its share price.
21
First Resources Ltd

May 21, 2013
Figure 52: FFB output growth (%), 2013-15
Figure 53: Average FFB output growth (%)
FGV
FGV
Dec-15F
IOI
Dec-14F
IOI
HAPL
HAPL
Dec-13F
SIME
SIME
2.0%
Title:
Source:
2.6%
3.4%
4.0%
AALI
AALI
4.4%
GGR
GGR
4.6%
WIL
WIL
IFAR
IFAR
SGRO
SGRO
LSIP
LSIP
8.2%
SIMP
SIMP
8.2%
KLK
KLK
GENP
GENP
FR
FR
BWPT
BWPT
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0.0%
35.0%
5.0%
5.5%
7.6%
8.9%
12.5%
14.9%
30.6%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
5.3 Cheap valuations, superior earnings

First Resources is the cheapest planter in Singapore and among the cheapest in
the region. It trades at 10.3x CY14 P/E vs. its local peers 12.6x and regional
peers 15.3x, on average. To us, its discounts are unjustified, in view of our
3-year EPS CAGR of 10.5% vs. the industrys 0.8%.
First Resources also trades at 1.9x P/BV, a 17% ROE vs. the sectors 1.5x and 9%
respectively. Its enterprise value per planted hectare (EV/ha) of US$19,160 is
below the industrys US$21,709 average.
Figure 54: EV per planted ha

US$ per ha
70,000
60,000
50,000
40,000
30,000
20,000
10,000
5.4 Initiate coverage with Outperform

We initiate coverage with an Outperform rating and S$2.22 target price, based
on 12.3x CY14 P/E, 1 SD above its 4-year mean. Although this appears rich
relative to its historical trading band, we note that the stocks short listing
history skews its data. At our target, First Resources would be trading at a 19%
discount to its peers. Re-rating catalysts could stem from higher FFB
production and potential dividend uplifts when free cash flows increase from
FY14.
22
First Resources Ltd

May 21, 2013
Figure 55: 12M forward core P/E

16.0
Figure 56: Current P/BV

Title:
2.7
+2SD: 13.9x
14.0
+2SD:
2.6x
Source:
2.5
+1SD: 11.6x
+1SD: 2.3x
12.0
2.3
10.0
Avg: 2.1x
Avg: 9.3x
2.1
8.0
-1SD: 1.9x
1.9
-1SD: 7.0x
6.0
1.7
4.0
-2SD: 1.6x
-2SD: 4.7x
2.0
Dec-08
Sep-09
Jun-10
Mar-11
Dec-11
1.5
Dec-09
Sep-12
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Figure 57: Peers Comparison
Company
Singapore
First Resources Ltd
Mewah International
Singapore average
Malaysia
Felda Global Ventures
Genting Plantations
Hap Seng Plantations
IOI Corporation
Jaya Tiasa Holdings
Kuala Lumpur Kepong
Sime Darby Bhd
Malaysia average
Indonesia
Astra Agro Lestari
BW Plantation
London Sumatra
Salim Invomas Pratama
Sampoerna Agro
Indonesia average
Recom.
Price
(lcl curr)
Target
Price
(lcl curr)
Market
Cap
(US$ m)
FR SP
GGR SP
IFAR SP
MII SP
WIL SP
Outperform
Neutral
Underperform
Underperform
Outperform
1.90
0.57
1.09
0.46
3.39
2.22
0.56
1.02
0.46
3.74
2,396
5,826
1,245
552
17,266
12.0
17.5
18.1
24.8
13.6
14.4
FGV MK
GENP MK
HAPL MK
IOI MK
JT MK
KLK MK
SIME MK
Neutral
Neutral
Neutral
Neutral
Neutral
Underperform
Neutral
4.62
9.00
2.71
5.35
2.24
21.74
9.50
4.32
8.70
2.70
5.53
1.82
18.18
9.50
5,592
2,265
719
11,331
719
7,681
18,940
AALI IJ
BWPT IJ
LSIP IJ
SIMP IJ
SGRO IJ
Neutral
Neutral
Neutral
Underperform
Neutral
17,700
1,010
1,640
830.0
1,940
19,000
950.0
1,800
864.0
2,000
2,856
419
1,147
1,345
376
Bloomberg
Ticker
Average (all)
3-year EPS
CAGR (%)
P/BV (x)
CY2013
Recurring
ROE (%)
CY2013
Dividend
Yield (%)
CY2013
10.3
14.4
16.1
19.9
12.1
12.6
10.5%
2.7%
-10.2%
13.4%
9.0%
7.3%
1.92
0.66
0.85
0.95
1.12
0.99
17.0%
4.0%
4.8%
3.9%
8.6%
7.2%
2.5%
1.2%
0.0%
0.8%
1.5%
1.4%
29.5
21.9
16.2
20.6
34.5
23.7
16.9
20.1
22.6
18.0
13.5
19.5
17.4
20.4
16.4
18.3
-2.9%
9.6%
7.4%
-2.3%
26.6%
7.8%
-3.6%
-4.4%
2.64
1.85
1.09
2.42
1.24
3.14
2.00
2.23
9.1%
8.8%
6.9%
12.0%
3.8%
13.5%
12.1%
11.3%
1.7%
1.4%
3.7%
2.4%
0.6%
3.3%
3.0%
2.6%
13.8
14.1
10.7
18.8
11.2
13.7
12.7
8.8
9.4
16.2
9.7
11.9
-4.8%
34.3%
6.2%
-13.9%
7.7%
-0.6%
2.94
2.17
1.63
0.94
1.25
1.70
21.8%
16.3%
15.9%
5.0%
11.7%
12.7%
4.2%
1.4%
4.0%
2.1%
1.9%
3.4%
17.2
15.3
0.8%
1.54
9.2%
2.3%
Core P/E (x)

CY2013 CY2014
SOURCES: CIMB, COMPANY REPORTS, BLOOMBERG
23
First Resources Ltd

May 21, 2013
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Spitzer Chart for stock being researched ( 2 year data )
Price Close
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1.0
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
Distribution of stock ratings and investment banking clients for quarter ended on 30 April 2013
1002 companies under coverage
Rating Distribution (%)
Investment Banking clients (%)
Outperform/Buy/Trading Buy
51.4%
7.8%
Neutral
35.1%
4.7%
Underperform/Sell/Trading Sell
13.5%
4.9%
Recommendation Framework #1 *
Stock
OUTPERFORM: The stock's total return is expected to exceed a relevant benchmark's total return
by 5% or more over the next 12 months.
Sector
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to
outperform the relevant primary market index over the next 12 months.
NEUTRAL: The stock's total return is expected to be within +/-5% of a relevant benchmark's total
return.
NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in
line with the relevant primary market index over the next 12 months.
UNDERPERFORM: The stock's total return is expected to be below a relevant benchmark's total
return by 5% or more over the next 12 months.
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to

underperform the relevant primary market index over the next 12 months.
TRADING BUY: The stock's total return is expected to exceed a relevant benchmark's total return
by 5% or more over the next 3 months.
TRADING BUY: The industry, as defined by the analyst's coverage universe, is expected to
outperform the relevant primary market index over the next 3 months.
TRADING SELL: The stock's total return is expected to be below a relevant benchmark's total
return by 5% or more over the next 3 months.
TRADING SELL: The industry, as defined by the analyst's coverage universe, is expected to
underperform the relevant primary market index over the next 3 months.
* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Korea Exchange, Taiwan
Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market
volatility or other justifiable company or industry-specific reasons.
CIMB Research Pte Ltd (Co. Reg. No. 198701620M)
26
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May 21, 2013
Recommendation Framework #2 **
Stock
OUTPERFORM: Expected positive total returns of 10% or more over the next 12 months.
Sector
OVERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number
of stocks that are expected to have total returns of +10% or better over the next 12 months.
NEUTRAL: Expected total returns of between -10% and +10% over the next 12 months.
NEUTRAL: The industry, as defined by the analyst's coverage universe, has either (i) an equal
number of stocks that are expected to have total returns of +10% (or better) or -10% (or worse), or
(ii) stocks that are predominantly expected to have total returns that will range from +10% to -10%;
both over the next 12 months.
UNDERPERFORM: Expected negative total returns of 10% or more over the next 12 months.
UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, has a high number
of stocks that are expected to have total returns of -10% or worse over the next 12 months.
TRADING BUY: Expected positive total returns of 10% or more over the next 3 months.
TRADING BUY: The industry, as defined by the analyst's coverage universe, has a high number
of stocks that are expected to have total returns of +10% or better over the next 3 months.
TRADING SELL: Expected negative total returns of 10% or more over the next 3 months.
TRADING SELL: The industry, as defined by the analyst's coverage universe, has a high number
of stocks that are expected to have total returns of -10% or worse over the next 3 months.
** This framework only applies to stocks listed on the Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily
outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons.
Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2012.
AAV not available, ADVANC - Excellent, AEONTS Good, AMATA - Very Good, ANAN not available, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY Excellent , BBL - Excellent, BCH not available, BCP - Excellent, BEC - Very Good, BGH - not available, BJC Very Good, BH - Very Good, BIGC - Very Good, BTS Excellent, CCET - Good, CENTEL Very Good, CK - Very Good, CPALL - Very Good, CPF - Very Good, CPN - Excellent, DELTA - Very Good, DTAC - Very Good, EGCO
Excellent, ERW Excellent, GLOBAL - Good, GLOW - Very Good, GRAMMY Excellent, HANA - Very Good, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH Very
Good, ITD Very Good, IVL - Very Good, JAS Very Good, KAMART not available, KBANK - Excellent, KK Excellent, KTB - Excellent, LH - Very Good, LPN Excellent, MAJOR - Good, MAKRO Very Good, MCOT - Excellent, MINT - Very Good, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - Excellent, PTTEP Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, RS Excellent, SAMART Excellent, SC Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very
Good, SIRI - Good, SPALI - Very Good, SRICHA not available, SSI not available, STA - Good, STEC - Very Good, TCAP - Very Good, THAI - Excellent, THCOM Very
Good, TICON Very Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Very Good, TTW Very Good, TUF - Very Good, VGI not available, WORK
Good.
27

First Resources Initiating Coverage CIMB

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PlantationsSINGAPORE

May 21, 2013

First Resources Ltd

Notes from the Field

SHORT TERM(3 MTH)

LEE Wen Ching

Ivy NG Lee Fang, CFA

Strong FFB growth partially

We anticipate palm oil

52-week share price range

We expect additional income from its

Transforming into a cash

Relative to FSSTI (RHS)

Amid our expectations of lower CPO

Additional income stream

SOURCE: CIMB, COMPANY REPORTS

First Resources Ltd

Rolling P/BV (x)

Mkt Cap US$m

Rolling FD P/E (x)

Indofood Agri Resources

Indofood Agri Resources

First Resources Ltd

First Resources Ltd

Peer Aggregate: P/BV vs Recurring ROE

Peer Aggregate: FD P/E vs FD EPS Growth

Rolling P/BV (x) (lhs)

Recurring ROE (rhs)

Rolling FD P/E (x) (lhs)

Fully Diluted EPS Growth (rhs)

P/E (FD) (x)

Growth and Returns

SOURCE: CIMB, COMPANY REPORTS

First Resources Ltd

Share price info

P/BV vs Recurring ROE

FD Core P/E vs FD Core EPS Growth

DB Intl Trust Singapore

Rolling P/BV (x) (lhs)

Recurring ROE (rhs)

Rolling FD Core P/E (x) (lhs)

FD Core EPS Growth (rhs)

Profit & Loss

Lower FY13 earnings on

Higher operating cash inflows

SOURCE: CIMB, COMPANY REPORTS

First Resources Ltd

Net gearing remains

SOURCE: CIMB, COMPANY REPORTS

First Resources Ltd

5. VALUATION AND RECOMMENDATION

Notes from the Field

At current prices, demand

1.1 Integrated palm-oil producer in Indonesia

SOURCES: CIMB, COMPANY REPORTS

First Resources Ltd

SOURCES: CIMB, COMPANY REPORTS

Figure 7: Corporate milestones

Achieved more than 146,406 hectares plantation under management

First Resources is 63.2% owned by Eight Capital, an investment vehicle of the