GOLDEN AGRI-RESOURCES LTD
E5H.SI
Golden Agri - Nice Finish To The Year
- Golden Agri was the only SGX-listed planter whose results surprised on the upside, due to its downstream and oilseed processing earnings.
- We maintain our BUY recommendation on this stock, given its still inexpensive valuation of < 14x P/E and decent growth prospects.
- We raise our earnings and TP to SGD0.47 (from SGD0.42, 27% upside). This implies an EV/ha of USD20,000, in line with its SGX-listed peers but below that of its Malaysian-listed peers.
Surprising on the upside.
- Golden Agri-Resources (Golden Agri) was the only SGX-listed planter whose FY15 results exceeded our estimates. Its downstream profits improved as a result of its increasing refining margins as well as a turnaround in the oilseeds division to the positive realm.
- Although FFB production rose 3% in FY15, the company is guiding for weaker (a negative single digit decline) FY16 FFB production growth on the back of the El Nino impact.
- We have already imputed a 5% decline for FY16 in our forecast, followed by a 1-3% improvement in FY17-18.
- Key risks include the reversal of CPO price trends as well as weaker-than-expected demand.
A higher TP.
- We raise our earnings forecasts for FY16-17 by 12-14% and introduce our FY18 forecasts, after upping our oilseed division profits as well as boosting our refining margin.
- Our TP rises to SGD0.47 (from SGD0.42), based on 17x 2016 earnings. This implies an EV/ha of USD20,000/ha, in line with its SGX-listed peers but below that of its Malaysian-listed peers.
Singapore Research
RHB Invest
|
http://www.rhbinvest.com.sg/
2016-03-01
RHB Invest
SGX Stock
Analyst Report
0.47
Up
0.42
