Date of Report

October 1, 2024

Broker Name

UOB Kay Hian

Company Overview

First Resources is a leading palm oil producer and exporter based in Singapore. The company is involved in the cultivation of oil palm, the production of crude palm oil (CPO), and the manufacturing of palm oil-related products. First Resources is committed to sustainable practices and aims to meet global demand for palm oil while minimizing environmental impact.

Recent Developments

The report highlights that the Chinese government has announced significant stimulus measures aimed at revitalizing its economy. These initiatives are expected to boost agricultural productivity and increase demand for palm oil products, benefiting companies like First Resources.

Revenue Exposure to China

First Resources has considerable revenue exposure to the Chinese market, as China is one of the largest consumers of palm oil. The anticipated increase in consumer demand and government spending on agriculture could enhance First Resources’ business prospects and revenue generation.

Investment Recommendation

• Recommendation: BUY
• Current Price (S$): 0.75
• Target Price (S$): 0.70
• Potential Upside (%): (6.7%)

Market Context

With the expected growth in palm oil demand driven by the government’s economic initiatives and rising consumption, First Resources is well-positioned to capitalize on increased sales of its products. The company’s commitment to sustainability further aligns it with global trends favoring environmentally responsible sourcing.

Conclusion

First Resources’ strategic focus on palm oil production and its significant exposure to the recovering Chinese economy present a compelling investment opportunity. The anticipated growth in demand for sustainable palm oil positions First Resources for substantial gains in the coming years.