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AmFraser starts Global Palm Resources (K6J.SG) at Buy with $0.51 fair value, based on 12X FY11F P/E of 4.2 cents.
“We believe GPR may be trying to gain a foothold into East Kalimantan for oil palm cultivation. If the venture inroad proves successful, it will further beef up GPR’s production capacity and more importantly provide an alternative source of plantation landbank for oil palm cultivation.”
“We believe GPR may be trying to gain a foothold into East Kalimantan for oil palm cultivation. If the venture inroad proves successful, it will further beef up GPR’s production capacity and more importantly provide an alternative source of plantation landbank for oil palm cultivation.”
It adds, due to its small size and domestic consumption driven nature, GPR is also less likely to be hampered by environmental organisations in growing its cultivated plantations.
The house forecasts $83.1 million, $116.4 million in net profit for FY10, FY11 respectively. It says GPR is priced relatively lower vs regional peers at over 8X FY11F P/E. Shares are +6.8% at $0.395 in heavy volume of 7 million shares.
