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Analysts mixed on Golden Agri; CGS-CIMB downgrades to 'hold' due to policy concerns

Khairani Afifi Noordin
Khairani Afifi Noordin5/18/2022 09:27 AM GMT+08  • 3 min read
Analysts mixed on Golden Agri; CGS-CIMB downgrades to 'hold' due to policy concerns
Analysts are mixed on Golden Agri on the ongoing Indonesia palm oil export ban and the possibility of CPO trending lower.
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Analysts are mixed on Golden Agri-Resources on the back of the ongoing Indonesia palm oil export ban and the possibility of crude palm oil (CPO) trending lower in 2HFY2022.

CGS-CIMB Research analysts Ivy Ng Lee Fang and Nagulan Ravi have downgraded their recommendation from “add” to “hold” due to concerns that the policy to control cooking oil prices in Indonesia would negatively impact profit margins for Golden Agri’s estates.

The analysts point out that Golden Agri is reducing the processing of third-party fruits following the export ban, and that it has enough storage capacity to store its own palm oil production. However, the possibility of a prolonged export ban is likely to impact Golden Agri’s cash flow and raise logistic costs.

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