KUALA LUMPUR, Aug 19 — Kenanga Research expects Sime Darby Plantation Bhd (SDP) to remain strong going into the second half of 2021 (2H 2021), underpinned by the expectation that the crude palm oil (CPO) price would remain consistent, moving forward.
In a note today, the research firm has maintained its ‘outperform’ call on SDP, but lowered the target price (TP) to RM4.60 from RM4.95 previously due to a lower rolled-over financial year 2022 (FY2022) estimated price-to-earnings ratio.
Meanwhile, Public Investment Bank has maintained its ‘neutral’ call on SDP, raising its profit margin expectation for the plantation giant to 17 per cent from 14 per cent, subsequently lifting its FY2021-2022 earnings forecast by 15-22 per cent.
“Nevertheless, we lower our TP from RM5.14 to RM4.90 as we lower our price-earnings multiple from 34 to 28 times, marred by the increasing environmental, social and governance (ESG) concern on the company,” it said in a separate note. — Bernama
