8 August 2008
UNDERPERFORM Maintained
S$1.36 Target: S$1.53
Mkt.Cap: S$2bn/US$1,416m
Dry spell..........................oil price of US$120 per barrel.
foreword(序言) is repeated please click here if you want to read
Valuation and recommendation
Maintaining earnings forecasts but target price reduced. We are keeping to our earnings forecasts but have tagged a lower P/E rating of 10x against 15x previously for Indofood Agri, to account for rising CPO price risks. This has the effect of lowering our target price for Indofood Agri to S$1.53 from S$2.25. The 10x forward P/E is in line with the historical 3-year average forward P/E of Indonesian planters.
Retain Underperform. We reiterate our UNDERPERFORM rating given the limited upside in its share price relative to the market. We are concerned about weaker CPO prices and rising operating costs, which could dampen the group’s earnings prospects in the coming year.
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