We are keeping our earnings forecasts as the suspension is unlikely to impact our earnings forecasts given IOI Corp’s plans to work closely with RSPO to find a solution. Also intact are our target price of RM5.95 (based on a target CY12 P/E of 16x) and UNDERPERFORM rating which takes into account its below-peers FFB output growth and our view that the CPO price is close to its peak. The potential de-rating catalysts are lower-thanexpected production and falling CPO price. For exposure to Malaysian plantations, we prefer Sime Darby.
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