OCBC - fair value S$0.80
Golden Agri-Resources (GAR) yesterday announced that Unilever has resumed palm oil purchases from its subsidiary PT SMART. The group believes that the purchase order is "an acknowledgement of its sustainability commitments" including the RSPO (Roundtable on Sustainable Palm Oil) certification, which it received for SMART recently. Recall that Nestle had already placed an order to resume palm oil purchases from SMART in Sep. And as the group continues to make good progress on its sustainability commitments, we believe that more food giants will resume business ties with the group. While we view the latest development positively, we opt to hold off adjusting our estimates ahead of its 3Q11 results due by mid-Nov.
For now, we maintain our BUY rating and S$0.80 fair value. (Carey Wong)
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