Golden Agri

Golden Agri: OCBC maintains Sell, but raise TP to $0.50 from $0.465. Note that despite a disappointing set of 3Q13 results, Golden Agri-Resources’ (GAR) share price has continued to do well, likely buoyed by more signs that CPO (crude palm oil) prices are stabilizing around current levels (MYR2500/ton), aided by slightly better demand and supply factors. House US$830/ton (MYR2650/ton) forecast has already taken these factors into consideration. But further CPO price upside may still be capped by the expected jump in global oilseed production. And as the market appears to be taking on a more “risk on” approach, apply a higher 13.5x peg (versus 12.5x previously) to its FY14F EPS.