Monday, February 28, 2011

Golden Agri

Golden Agri (GAR): reported FY10 net profit was strong, more than double yoy to US$1423m, mainly boosted by a surprise net gain from fair value changes to biological assets of US$1371m in 4Q. However, even on an adjusted basis, co still beat expectations. We estimate that core net profit came in at ~US$395m, above consensus forecast of US$355m...

Revenue reached US$3505m, +53% yoy, driven by higher CPO price (ASP US$901/mt, +32.5% yoy) and higher sequential sales volume in the 4th quarter. 4Q results also reflected fully consolidated accounts of Florentina Int’l (noodle operations), following completion of the acquisition.
Co proposed a first and final div of S 0.77cts (+56% yoy)...

Mgt remains positive on outlook for the palm oil industry, and will continue to increase pdtn of sustainable palm oil, and further improve operational efficiency and plantation mgt techniques. But highlights the operating environment of the China Agri business remains challenging due to volatile commodity prices.
Stock trades at 16x core P/E, 0.93x P/B.
Prior to results, the majority of houses had Buy/ Trading Buy ratings, with recent targets ranging $0.74-0.91

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