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First Resources to clear inventory build-up in 2HFY2022, RHB maintains 'neutral'

Khairani Afifi Noordin
Khairani Afifi Noordin8/18/2022 03:36 PM GMT+08  • 2 min read
First Resources to clear inventory build-up in 2HFY2022, RHB maintains 'neutral'
RHB believes First Resources is fairly valued, trading at 7x 2023 P/E — in line with its peer range of 6x-11x.
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RHB Group Research analysts maintain their “neutral” call on First Resources, expecting the company to clear its high inventory build-up in 2HFY2022.

In their Aug 12 report, the analysts explain that the company has an inventory build up of 131,000 tonnes in 2QFY2022 — much higher than 1HFY2021’s 20,000 tonnes. This was due to the export ban impact and export permit issues in May and June.

First Resources expects to only be able to normalise inventory by year’s end due to the logistics backlog in the country.

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