Sarawak Oil Palms

[winston]

not vested

Trades below replacement cost, a value Buy

Record profit prompts first ever interim DPS of 4sen 3Q21 core PATMI beat our/street estimates on better-than-expected CPO ASP, and lower-than-expected cost.

4Q21 earnings outlook remains promising given present high palm oil prices as SOP has minimal forward sales.

We lower our TP slightly to MYR5.60 on 13x FY22 PER peg, its updated 5Y mean (from MYR5.80 on 14x FY22 PER).

With net gearing at just 3% (end Sept 21), 8x FY22E PER and an unadjusted EV/ha of
MYR26,000 (below replacement cost), SOP is undervalued.

A first ever interim DPS of 4sen was announced. Maintain BUY.

Source: Maybank

[winston]

not vested

Feb 25, 2022

Historic MYR0.5b PATMI on record palm oil prices

An excellent proxy to CPO price rally

FY21 core PATMI beat our/street estimates by 37%/35% due to record palm oil products ASP.

SOP is now in net cash position, allowing it to raise DPS beyond the yearly 5-6sen.

A final DPS for FY21 will be proposed before its AGM (in addition to 4sen interim DPS paid).

SOP is poised to benefit from high spot prices in 2022 as it has minimal forward sales.

Following our EPS upgrade, we raise TP to MYR5.88 after rolling forward valuation to FY23E (from FY22) on unchanged 13x PER, its 5Y mean.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/252998.pdf

[winston]

not vested

May 5, 2022

Sarawak Oil Palms to record positive earnings in Q1 given the current high-priced of CPO, says RHB Research

Slightly be offset by its lower fresh fruit brunches (FFB) output. All in, we believe Q1 2022 earnings would be 15-20 per cent higher quarter-on-quarter (QoQ),

March FFB production grew 14.7 per cent month-on-month (MoM) from better weather.

(YTD) FFB output dropped by 13.7 per cent year-on-year (YoY).

"We expect this low FFB output trend to continue, at least until the end of the first half (1H) of 2022, given the labour shortage plaguing the sector.

SOPB had proposed a 1-for-2 bonus issue of up to approximately 303 million shares.

RHB maintains a Buy call for SOPB with a new target price of RM7.05 from RM6.05 previously, a nine per cent upside with a two per cent FY22 yield.

Key downside risks include declining CPO prices, weather risks and lower-than-expected FFB production output.

Source: NST Business


https://www.nst.com.my/business/2022/05 ... priced-cpo

[winston]

not vested

Still a prime beneficiary of high palm oil spot prices

Strong 1Q results may not be repeated

1Q22 results exceeded our/consensus expectations.

Besides benefitting from higher palm oil products prices, 1Q results was also boosted by other operating income of MYR37m that is unlikely to be recurring.

1Q22 may have been SOP’s best quarterly results for FY22E as we expect lower CPO
ASP in 2H coupled with rising cost pressures (ie higher minimum wage and fertiliser cost), but mitigated by seasonally higher output.

We maintain our HOLD with unchanged TP of MYR6.52 on 13x FY23E PER, its 5Y mean.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/263057.pdf