Stock Name: Olam
Company Name: OLAM INTERNATIONAL LIMITED
31 August 2011: Olam Intl Limited
Summary: Olam International Limited reported strong revenue growth in FY11, which jumped 50.5% to S$15.73b, surpassing our forecast of S$13.77b, driven by both higher sales volume and ASPs. Reported net profit (including exceptional items) came in at around S$429.8m, up 19.6%; while NPAT (excluding exceptional items) climbed 37.1% to S$372.8m, just above our S$369.4m forecast. Citing the strong performance in FY11 and the continued execution of its long-term strategic growth plans, Olam says it continues to be positive about its prospects for FY12. While we largely share Olam's optimism about its relatively resilient food-related commodities business, we cannot ignore the looming global economic uncertainties. So even as we revise up our FY12 revenue estimate, we pare our core earnings estimate due to lower margin assumptions. As we are also lowering our valuation peg to 18x FY12F EPS from 19x previously, our fair value drops to S$2.63. Maintain BUY.
Company Name: OLAM INTERNATIONAL LIMITED
| Research House: OCBC | Price Call: BUY | Target Price: 2.63 |
31 August 2011: Olam Intl Limited
Summary: Olam International Limited reported strong revenue growth in FY11, which jumped 50.5% to S$15.73b, surpassing our forecast of S$13.77b, driven by both higher sales volume and ASPs. Reported net profit (including exceptional items) came in at around S$429.8m, up 19.6%; while NPAT (excluding exceptional items) climbed 37.1% to S$372.8m, just above our S$369.4m forecast. Citing the strong performance in FY11 and the continued execution of its long-term strategic growth plans, Olam says it continues to be positive about its prospects for FY12. While we largely share Olam's optimism about its relatively resilient food-related commodities business, we cannot ignore the looming global economic uncertainties. So even as we revise up our FY12 revenue estimate, we pare our core earnings estimate due to lower margin assumptions. As we are also lowering our valuation peg to 18x FY12F EPS from 19x previously, our fair value drops to S$2.63. Maintain BUY.
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