Golden Agri: (The Edge) The Golden Decade? Recall FY11 has been a particularly good year for the Co. as Co. announced a +70% yoy in rev and +48% increase in core net profit, and a record div payout of 30%.
Supply of CPO seems likely to remain tight too in the recent CPO conference where Dorab Mistry thinks CPO prices may climb to a 4 yr high by June and for prices to hit Rm4,000. GoldenAgri appears to concur with this assessment and house base case is for CPO to maintain prices at the current levels.
Regarding Indo export taxes, grp cite that its too early to tell exactly the impact for now, however grp is already palnning to nearly double its refining capacity in the next 2 yrs. Besides adding refining capacity, Grp will build its downstream business by imrpvoing sales and distribution channels, and enter net mkts.
For upstream, grp aims to add another 30,000 ha in new plantings for FY12 (FY11 at 13,190ha) and expand its mills to harvest its FFB. Overall, analyst target prices of $0.89 still represents a significant upside of 20.3%.
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