Home Capital Broker's Calls

Bumitama Agri has young trees, production pickup in its favour

PC Lee
PC Lee10/26/2016 11:56 AM GMT+08  • 2 min read
Bumitama Agri has young trees, production pickup in its favour
SINGAPORE (Oct 26): UOB Kay Hian is maintaining its “buy” on Bumitama Agri with a target price of $1.25 on expectations of a strong pickup in production in 4Q despite a forecast 4.4% fall in FFB (Fresh palm Fruit Bunches) for 2016 from a year ago.
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

SINGAPORE (Oct 26): UOB Kay Hian is maintaining its “buy” on Bumitama Agri with a target price of $1.25 on expectations of a strong pickup in production in 4Q despite a forecast 4.4% fall in FFB (Fresh palm Fruit Bunches) for 2016 from a year ago.

In a Tuesday note, although nucleus FFB production for 9M16 dropped 10.7% y-o-y, UOB expects nucleus FFB production growth to fall a less steep 4.4% y-o-y as it expects a stronger recovery in 4Q on the back of new mature areas as well as its young oil palm trees approaching prime age. Production is also expected to peak in 4Q, accounting for 28-33% of full-year FFB production.

As for CPO prices, UOB expects them to hover at RM2,400-2,600/tonne ($803-870/tonne) and is maintaining its average CPO price forecast of RM2,500/tonne for 2016. That’s due to the tight supply since 1H16 and strong exports from China and India in Aug 16, which has helped CPO prices recover swiftly. Meanwhile, demand from key importing countries such as China and India is expected to hold steady too.

For more insights on corporate trends...
Sign In or Create an account to access our premium content.
Subscription Entitlements:
Less than $9 per month
Unlimited access to latest and premium articles
3 Simultaneous logins across all devices
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)
×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.
Unlock unlimited access to premium articles with less than $9 per month. Subscribe Now