RHB Securities has turned more optimistic on Golden Agri-Resources as it expects the palm oil company to continue to gain from a widening tax differential.

The brokerage has raised its target price for the stock to 30 cents from 25 cents previously. It has kept its “trading buy” call for the stock.

According to RHB, Golden Agri should be able to direct more of its crude palm oil (CPO) output to its downstream division to benefit from the tax differential between upstream and downstream products.

It points out that the export levy and tax on CPO in May is at US$399.00 ($531.64) a tonne, while that for refined palm oil is at US$232.50 a tonne.


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With the tax differential at US$166.50 a tonne, Golden Agri’s downstream division will be able to benefit with higher margins, it says.

Moreover, the downstream division will see contributions from new biodiesel capacity in 2H2021.

“We believe Golden Agri is well-placed to benefit from the continued strength in CPO prices, as well as the widening tax differential between upstream and downstream products in Indonesia,” the RHB Singapore research team writes in a May 4 report.

As at 10.53 am, Golden Agri was flat at 25 cents with 1.2 million shares changed hands.