Deutsche Bank sets $0.16 target price for Golden Agri.
Deutsche Bank starts First Resources at Hold, sets $0.25 target price. Says company is pure plantation play, has highest leverage to CPO prices among S'pore-listed palm plays. Broker is bearish on CPO prices in near term but says this has been priced in by stock's recent correction. Adds large percentage of company's plantation acreage is moving into prime production over next 3-4 years, should boost output; company's small size, discount to assets may make it takeover candidate.
Deutsche Bank initiates Indofood Agri at Hold, sets $0.47 target price. Broker is positive on plantation company's long-term prospects as is market leader in Indonesia, can leverage on extensive sales distribution network established by controlling shareholder PT Indofood Sukses Makmur. Also says valuations reasonable, but is cautious on stock in near-term due to falling crude palm oil (CPO) prices, expects consensus earnings estimates to be cut. Says, "given that the bulk of its profits are driven by CPO pricing, we expect earnings to dip by 31% in '09 before picking up in '10." Adds, "Indofood has a net debt of 40%, which is not favourable given the current negative sentiment for companies with high gearing."
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