RHB Group Research is keeping its “buy” call on Wilmar International but with a lower target price of $5.75 from $6.45 previously.

Although CPO prices have somewhat recovered recently, plantation share prices have retreated further, which the research team believes is due to ESG concerns. This devaluation of plantation sector PEs is also likely to be permanent, as investors become more ESG-aware and start pricing it into their investment decisions.

Despite this, RHB believes that Wilmar remains significantly undervalued compared with its China-listed peers.

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