OCBC Investment Research in a Jan 16 research report says: "Golden Agri-Resources (GAR) is likely to end off 2011 on a pretty strong note, aided by a fairly resilient CPO (crude palm oil) prices.
"With CPO prices remaining relatively stable at an average of US$959/MT in 4Q11 versus US$964/MT in 3Q11, GAR should put in a pretty strong last quarter. We understand that GAR would also be expecting deferred revenue recognition for some 34k MT of CPO from a delayed delivery during 3Q11.
"Its cash cost of production has never exceeded US$300/ton - and this should afford the group a sizeable margin to cushion any pull-back in CPO prices. We note that even during the last financial crisis, CPO prices did not fall below US$500/ton.
"Leaving our estimates unchanged for now; but due to a higher USD assumption for 2012, our fair value inches up from 80 cents to 82 cents, still based on 12.5x FY12F EPS. MAINTAIN BUY."
"With CPO prices remaining relatively stable at an average of US$959/MT in 4Q11 versus US$964/MT in 3Q11, GAR should put in a pretty strong last quarter. We understand that GAR would also be expecting deferred revenue recognition for some 34k MT of CPO from a delayed delivery during 3Q11.
"Its cash cost of production has never exceeded US$300/ton - and this should afford the group a sizeable margin to cushion any pull-back in CPO prices. We note that even during the last financial crisis, CPO prices did not fall below US$500/ton.
"Leaving our estimates unchanged for now; but due to a higher USD assumption for 2012, our fair value inches up from 80 cents to 82 cents, still based on 12.5x FY12F EPS. MAINTAIN BUY."
No comments:
Post a Comment