Golden Agri +7.7%;strong outlook for 2011

Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD
Research House: CIMB

Golden Agri (E5H.SG) is +7.7% at $0.700 after its FY10 earnings smashed expectations and the planter announced expansion plans for 2011. Volume is heavy at 192 million shares. 

OCBC, which has a Buy rating, tweaks its target to $0.88 from $0.91 on weaker USD assumptions; “for 2011, the group maintains a positive outlook for CPO, citing the growing consumption of edible oils and fats, particularly by the bulging middle class in countries such as China, India and Pakistan.” 

It notes, the company aims to spend US$450 million ($571.8 million) this year, with US$250 million for new planting.

CIMB says “we are keeping our expectation of a 36% jump in core net profit for FY11 on the back of stronger selling prices and output. Also intact is our target price of $0.85, at 16X forward P/E (10% premium to market target)...we continue to rate Golden Agri a Trading Buy in view of its attractive valuations vs peers and strong FFB output growth prospects.”