Golden Agri: Deutsche maintains Buy with TP $0.83. Expect grp to deliver above-average output growth of 9% pa vs industry growth of 6% pa over 2011-13. Yield projected to grow by 3.6% pa, on back of favorable age profile of planted area and improved weather conditions. Although still positive on long-term fundamentals of CPO, expect near-term price weakness on higher global supply…..
Add that grp’s strong output growth should help cushion the impact of a softer CPO price. Raise FY11-13 earnings forecasts by 6-12%, factoring in higher sales vol. Reduce PE valuation to 15x due to a more subdued palm oil price cycle. Continue to like grp for its above-average production growth.
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