Golden Agri

Golden Agri: 3Q results generally within expectations. Net profit at US$99.2m, +41% yoy, +50% qoq, mainly attributable to higher CPO prices (+8% qoq to US$831/ton), higher palm products output (+21% qoq) and lower tax rate (21.8% in 3Q vs 28% in 2Q).
Margins however were lower than expected, probably due to lag before higher CPO prices start to filter through. 9M10 gross margin was 24.5% vs 25.3% for 1H10…

UOBK maintains Sell with $0.70 target due to demanding valuation (19x FY12E P/E) vs peers (IndoAgri at 14.8x). Tips $0.60 as level to accumulate.
JPM has Underweight rating, with $0.50 target.
Still, stock’s positive momentum may lead to test of $0.80 in the near term, as unlike IndoAgri, Wilmar, its 3Q showing did not surprise negatively.
Daiwa rates as Buy with $0.85 target.