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Despite stockpile rising above the 2m-tonne mark, OSK is not overly concerned as they believe that most of the contributing factors are already known and may have been factored into the decline in palm oil price from RM3,963 per tonne in Feb 2011 to a low of RM3,016.
OSK suspects that inventory may fall back promptly due to supply disruption in 2H. With palm oil now trading at a significant USD210 per tonne discount to soybean oil, there is plenty of room for palm oil price to move higher when supply disruption materializes in the months ahead. Maintain Neutral on the sector, with a positive near term outlook.
Below are the target prices and ratings for selected plantation stock.
| Stock | Price (RM) | Target (RM) | Market Cap (RM million) | Rating |
|---|---|---|---|---|
| Genting Plant | 7.85 | 8.26 | 5,972.1 | Neutral |
| IJM Plant | 2.75 | 3.14 | 2,188.7 | Neutral |
| KL Kepong | 20.76 | 20.55 | 22,207.6 | Neutral |
| Sime Darby | 9.15 | 8.47 | 54,986.6 | Sell |
| SOP | 4.25 | 5.22 | 1,869.0 | Buy |
| IOI Corp | 5.18 | 4.39 | 33,043.3 | Sell |
| Kulim | 3.75 | 4.77 | 4,644.3 | Buy |
| TSH | 3.14 | 3.83 | 1,308.4 | Buy |
| Glenealy | 5.80 | 6.40 | 669.1 | Buy |
Source : OSK Research
Related posts:
- Stock Picks – Plantation Sector – March 2011
- OSK Plantation Sector Stock Picks, Sep 2011
- Stock Picks – Plantation Sector – February 2011
- Stock Picks – Plantation Sector – December 2010
- OSK Plantation Sector Stock Picks, Mar 2012
- ECMLibra Plantation Sector Stock Picks, Sep 2011
- OSK Technology Sector Stock Picks, May 2011
- Stock Picks – Consumer Products Sector – February 2011
- OSK Steel Sector Stock Picks, Jul 2011
- OSK Automotive Sector Stock Picks, Jul 2011
