Golden Agri

Golden Agri: OCBC maintains Hold with $0.63 TP. House note that Golden Agri-Resources (GAR), after reporting a disappointing set of FY12 results at end Feb, has languished below $0.60 in recent wks; and may continue to do so in lieu of the still-weak near-term outlook. The main reason for the expected near-term underperformance comes from the uninspiring CPO prices, which has again fallen below MYR2,400/ton. The other reason is probably the still-high stockpiles seen at several planters in both Malaysia and Indonesia. Despite the near-term headwinds, management remains relatively upbeat about its prospects, as it still sees robust demand growth for CPO as an edible oil from emerging and development countries. House see value emerging at $0.55 or better.