Golden Agri-Resources price target raised

Golden Agri-Resources price target raised to 68 cents by OSK

Tags: Golden Agri-Resources
Written by The Edge
Monday, 01 March 2010 17:03

OSK has raised Golden Agri-Resources’ (E5H.SG) target price to 68 cents from 63.5 cents, based on 15x FY10 P/E, after increasing FY10 earnings forecast 8.3% to assume higher palm oil prices on back of lower fertiliser costs.

The broker says the change to bottomline estimate also reflects lower corporate tax rate of 25% vs 30% previously. Cites high fertiliser cost as one key factor weighing on FY09 profitability (earnings down 56.1% at US$607 million ($854 million)), but notes highly-priced fertiliser has since been used up.

It adds that production is also back on track, rising 13% last year after being hit by adverse weather in previous three years.

Tips production to grow 10% in 2010 on back of improving age profile.

Keeps “trading buy” call.

Shares +1.9% at 54 cents.


http://www.theedgesingapore.com/the-daily-edge/business/13045-golden-agri-resources-price-target-raised-to-68-cents-by-osk.html