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Broker's Take: CIMB maintains 'hold' on Golden Agri-Resources

Wednesday, May 13, 2015 - 14:55

CIMB on Wednesday maintained its "hold" call on Golden Agri-Resources, stating that the palm oil player's first-quarter core net profit of US$52 million was broadly in line at 19 per cent of its and consensus full-year forecast.

As at 2.45pm, Golden Agri-Resources was trading at S$0.445, up 1.136 per cent, or half a cent.

On Tuesday, the company announced its results for the first quarter ended March 31, 2015. Net profit had plunged 83.5 per cent to US$17.19 million while revenue was down 18.9 per cent to US$1.55 billion, as a result of lower average crude palm oil prices and lower production output during the period.

"The positive takeaway from the first quarter is the better downstream earnings, but this is offset by weaker fresh fruit bunches output from its estates," CIMB analyst Ivy Ng wrote in a report.

"We are of view that the stock is fairly valued and see support from the recent buyback programme and potential El Nino event," Ms Ng added.