Golden Agri

Golden Agri: 4Q13 core net profit of US$113m (+212% y/y, 199% q/q) came ahead of consensus expectations, mainly attributable to exceptional China soybean crush margins and 18% higher crude palm oil (CPO) prices. Meanwhile, revenue grew 25% to US$1,901.8m. Golden Agri plans to expand palm oil plantations by 20,000-30,000ha (+4-6%) and expects sustained production growth of 5-10% each year to support the increasing demand from Indonesia on the back of higher biodiesel mandates. Market observers also warn of a potential emergence of El Nino in 2H14, which may cause CPO production to decrease, supporting average selling prices. Group proposed final DPS of 0.515¢, bringing FY13 total to 1.1¢. The distribution translates into a 35% payout ratio, ahead of its policy of up to 30% on underlying profits. At $0.56, Golden Agri trades at 13.3x forward P/E, compared to SGX-listed peers average of 12.3x. Latest broker recommendations: DB maintains Buy with TP $0.75 CLSA upgrades to Outperform with TP $0.63 BNP Paribas maintains Buy with TP $0.68 Credit Suisse maintains Outperform and raises TP to $0.68 (from $0.66) CIMB maintains Hold with TP $0.60 OCBC maintains Hold and raises TP to $0.515 (from $0.50)