Regional Plantation - RHB Invest 2024-05-13: Palm Oil Stocks Higher After 5 Months Of Decline

Regional Plantation - Palm Oil Stocks Higher After 5 Months Of Decline

Regional Plantation - RHB Investment Research | SGinvestors.ioBumitama Agri (SGX:P8Z) GOLDEN AGRI-RESOURCES LTD (SGX:E5H)
  • As a result of higher m-o-m output and weaker exports, PO inventory rose to 1.74m tonnes in April. We expect PO inventory to remain below the 2m tonne mark at least until June.
  • As for the upcoming results season, we expect flattish q-o-q earnings with mostly in line earnings.

1Q24F earnings to be flattish q-o-q for Malaysian & Indonesian planters.

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  • In Malaysia, FFB output of the companies under our coverage dipped by an average of 21.6% q-o-q, while spot CPO prices rose 9% q-o-q to MYR4,006/tonne.
  • In Indonesia, we estimate that 1Q24 FFB output for stocks under our coverage fell by a smaller 16.5% q-o-q (based on seasonal trends) while CPO prices – net of taxes – rose 9% q-o-q. We believe the smaller decline in output in Indonesia was due to low base effect given the weak output in 4Q23.

Indonesian planters should see higher earnings y-o-y, while Malaysian planters could see flattish numbers.

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  • In Indonesia, FFB output is estimated to have fallen by a slight 0.7% y-o-y in 1Q24, but CPO prices net of taxes, rose 5.5% y-o-y.

1Q24F is likely to bring largely in-line earnings

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Hoe Lee Leng RHB Securities Research | Singapore Research RHB Invest | Indonesia Research RHB Invest | 2024-05-13

More views on outlook of plantation sector:
Analyst Reports on Singapore Plantation Sector


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