Global Palm

Global Palm: OCBC maintains HOLD with lower TP of $0.17 (from $0.19) Grp continues to see a rise in its inventory of CPO, this time more than doubling to 7.7k tons from 3.4k tons at end 3Q12 (also up 19% YoY). And with the continued high production of CPO (which is likely to continue into Mar as company expects FFB production to increase some 11% this year), Grp may see its stock pile inching even higher going into 2Q13. Meanwhile, new planting has been slow, as Global Palm has only added 331k ha last year and plans to plan 300-400ha this year, citing tough negotiations with the local population. Recent FY12 results were slightly disappointing. GPR reported a net loss of IDR39.8b; but if strip out the bio-asset fair value losses, core earnings would have come in at IDR51.5b, or 10% below house forecast. In view of the still muted outlook for CPO, cut FY14 forecast for rev by 13% and core earnings by 12%; this also brings fair value down from $0.19 to $0.17, still based on 10x FY13F EPS.