IndoAgri

IndoAgri: UBS believes the acquisition of CMAA (a sugar grower and processor) in Brazil could add 5% to net profit in 2014 and rise further to 16% in 2016. NAV of US$77m translates to 5% of the current share price. Says, on an EV/ton and EV/EBITDA basis, the acq looks fairly priced, but it is worth noting that CMAA has lower cash costs and higher sugar contraction than the industry. Notes IndoAgri still has US$100m in cash at the co level, and continues to look for potential expansion opportuniteis (whether organic or through acquisitions) and plans to continue to look for invmts in palm oil, sugar and rubber. UBS keeps its Buy rating with TP $1.57. Adds, the co trades at 8.8x FY13e P/E, cheaper than Golden Agri's 10.8x and the sector's 11.6x.