OCBC Investment Research in an Oct 26 research report says: "Golden Agri Resources (GAR) is likely to see a pretty decent 3Q10 performance, aided by the recovery in CPO (crude palm oil) prices in the later half of the quarter as well as higher CPO output from its estates.

"As a recap, CPO prices have recovered sharply from an average of US$791/ton in 2Q10 to around US$821/ton; and we may see further room for earnings upside in 4Q10 as well, given that CPO prices are now hovering around US$900/ton. In view of the still upbeat outlook for CPO, we are raising our CPO assumptions for both FY2010 and FY2011 and we now expect prices to average around US$825/ton and US$860/ton respectively (versus US$800/ton).

"While bearing in mind the potential rise in export taxes, we also raise our earnings estimates for FY10 by 5.6% and for FY11 by 14.0%. As a result, our fair value improves to 78 cents. MAINTAIN BUY."

Mainboard-listed Thomson Medical Centre, one of the leading private healthcare providers for women and children, posted a 27.8% surge in net profit after tax (NPAT) to $16.3 million for the financial year ended 31 August 2010 (FY2010) on the back of a 21.2% growth in revenue to $81.7 million.

Revenue from Hospital Operations and Ancillary Services segment increased 11.2% from $51.9 million in FY2009 to $57.7 million in FY2010, representing 70.6% of the group’s total revenue.

The strong growth in this business segment was due to a 4.2% rise in number of patient referrals, increase in deliveries of 4.1% from 8,907 babies in FY 2009 to 9,268 babies in FY2010 and strong growth in diagnostic imaging services, Parentcraft services and other ancillary services.

Revenue from Specialised and Other Services surged 54.7% to $24.0 million in FY2010 from $15.5 million in FY2009. This is attributable to strong debut by our 8-month old Thomson Paediatric Centre (TPC), full year contribution from Thomson Women Cancer Centre (TWCC) and continued growth in patient load and revenue from our network of clinics under Thomson Women Clinics (TWC)

The net profit grew by 28.3% to $16.3 million mainly due to the growth in revenue, better gross margin and prudent management of administrative and other operating expenses. The increase in these expenses is attributable mainly to higher staff count and depreciation charges in relation to the renovation of the wards in FY 2009.

The group’s financial position remains strong with a fixed deposit and cash and bank balance of $30.5 million as at 31 August 2010, up from $20.6 million as at 31 August 2009. Bank borrowings decreased to $1.4 million as at 31 August 2010 from $2.7 million as at 31 August 2009 with gearing ratio of less than 1%. The group maintained its net cash position and generated $22.2 million of operating cash flow in FY2010, up 15.7% from $19.1 million in FY 2009. Total equity rose to $142.1 million from $111.3 million. Net asset value per share rose 27.2% from 38.12 cents per share to 48.48 cents per share.

Directors are recommending a one- tier tax-exempt final dividend of 2.0 cents per shares representing a payout ratio of 57.8%.