- Increase fair value estimate of Bumitama Agri (SGX:P8Z) to S$0.785, with Bloomberg consensus forward dividend yield of 6% as at 3 Apr 2024 screening attractive within the Singapore market.
Average CPO prices in Mar 2024 reached their highest since Apr 2023
- - Read this at SGinvestors.io -
- According to the Malaysian Palm Oil Board (MPOB), Malaysia’s CPO production fell by 10.2% month-on-month (MoM) to 1.3m tonnes in Feb 2024.
- Similarly, palm oil inventory levels continued to trend downwards in Indonesia, sliding 14.8% y-o-y to 3.1m tonnes as at Dec 2023 based on data from the Indonesian Palm Oil Association (IPOA).
- - Read this at SGinvestors.io -
Bumitama Agri is likely to shine in an environment where supply is constrained
- According to the World Meteorological Organization (WMO), the 2023-2024 El Niño peaked last December as one of the five strongest on record. While it is gradually weakening, there is a 60% chance of El Niño persisting from Mar to May, and almost all land areas are expected to experience higher than normal temperatures.
- There is also a chance of La Niña occurring in the second half of the year, though the odds are currently uncertain.
- Thus far, we have yet to see a significant impact from El Niño on CPO yields, as total CPO production in Malaysia for the first two months of the year have been higher y-o-y.
- Given the lagged impact of El Niño, and if CPO yields do come down later this year, Bumitama Agri is likely to benefit given:
- its position as a pure upstream player; and
- its track record of industry-leading productivity.
Increase Fair Value estimate to S$0.785
- Read more at SGinvestors.io.
Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @ https://www.iocbc.com/.
Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2024-04-03
Read also OCBC's most recent report:
2024-08-14 Bumitama Agri - Mixed Bag Of Results With Optimistic Guidance For 2H24.
Previous report by OCBC:
2024-05-14 Bumitama Agri - Where Flowers Bloom, So Does Hope.
Price targets by 2 other brokers at Bumitama Agri Target Prices.
Listing of research reports at Bumitama Agri Analyst Reports.
Relevant links:
Bumitama Agri Share Price History,
Bumitama Agri Announcements,
Bumitama Agri Dividends & Corporate Actions,
Bumitama Agri News Articles