Global Palm Resources

Global Palm Resources: Global Palm share price has shed ~9% over the past week, likely due to a bout of profit taking after touching a two-year high of $0.245 last week. The counter’s steady ~30% rise from the $0.19 low (18 Jun) through to the $0.245 high (21 Jul), was likely buoyed by a series of company share buyback transactions, executed between 21 Jun and 24 Jul. An aggregate 3.51m shares (0.85% of shares out) were repurchased at between $0.19 and $0.245 per share. 1.6m of those shares (46% of the buybacks) were transacted at a price of $0.225 or higher. Global Palm’s current share price of $0.22 offers investors an opportunity to accumulate at a lower price than the company’s recent stock purchases. Global Palm is in a net cash position of Rp356b ($37.5m), which translates to 9.2¢ per share. The stock’s valuation is attractive at an ex-cash 4.6x annualized 1Q14 P/E. For the upcoming 2Q14 results for the CPO sector, Maybank-KE believes that the sector’s profits will be stronger y/y boosted by strong fresh fruit bunch (FFB) output and higher CPO average selling prices (ASP). Nevertheless, Maybank-KE has an overall Neutral view for the sector in the short term, given expectations for CPO price to remain weak till Aug (between RM2,400 and 2,600 per mt), before trending higher in 4Q14.