December 2, 2011

Sarawak Oil Palms (Buy): Still early to take profit

Stock Name: SOP
Company Name: SARAWAK OIL PALMS BHD
Research House: MAYBANKPrice Call: BUYTarget Price: 6.48



Still undervalued. Recent oil palm estates transactions in East Malaysia went for as high as RM80,580/ha, yet SOP commands approximately half that value despite recent share price run up (+13% since our initiation on 2 Aug). The scarcity of investable assets and undervaluation offer an interesting M&A angle, in our view. Share price should receive further lift driven by its irresistible 2011 single digit valuation and our projected 16% FFB output CAGR (2010-13). Reiterate Buy and RM6.48 TP (13x 2013 PER).

Maybank research (2 December 2011)

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