Stock Name: GoldenAgr
Company Name: GOLDEN AGRI-RESOURCES LTD
OCBC Investment Research in a Jan 16 research report says: "Golden Agri-Resources (GAR) is likely to end off 2011 on a pretty strong note, aided by a fairly resilient CPO (crude palm oil) prices.
"With CPO prices remaining relatively stable at an average of US$959/MT in 4Q11 versus US$964/MT in 3Q11, GAR should put in a pretty strong last quarter. We understand that GAR would also be expecting deferred revenue recognition for some 34k MT of CPO from a delayed delivery during 3Q11.
"Its cash cost of production has never exceeded US$300/ton - and this should afford the group a sizeable margin to cushion any pull-back in CPO prices. We note that even during the last financial crisis, CPO prices did not fall below US$500/ton.
"Leaving our estimates unchanged for now; but due to a higher USD assumption for 2012, our fair value inches up from 80 cents to 82 cents, still based on 12.5x FY12F EPS. MAINTAIN BUY."
Company Name: GOLDEN AGRI-RESOURCES LTD
| Research House: OCBC | Price Call: BUY | Target Price: 0.82 |
OCBC Investment Research in a Jan 16 research report says: "Golden Agri-Resources (GAR) is likely to end off 2011 on a pretty strong note, aided by a fairly resilient CPO (crude palm oil) prices.
"With CPO prices remaining relatively stable at an average of US$959/MT in 4Q11 versus US$964/MT in 3Q11, GAR should put in a pretty strong last quarter. We understand that GAR would also be expecting deferred revenue recognition for some 34k MT of CPO from a delayed delivery during 3Q11.
"Its cash cost of production has never exceeded US$300/ton - and this should afford the group a sizeable margin to cushion any pull-back in CPO prices. We note that even during the last financial crisis, CPO prices did not fall below US$500/ton.
"Leaving our estimates unchanged for now; but due to a higher USD assumption for 2012, our fair value inches up from 80 cents to 82 cents, still based on 12.5x FY12F EPS. MAINTAIN BUY."
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