SOP ... Mar11

Inet Research Investment Highlights/Summary

 Sarawak Oil Palms Bhd (SOPB) is a mid-sized Sarawak-based plantation company involved in
the cultivation of oil palm and the operation of palm oil mills for the processing of palm oil and
palm kernel.

 As at end-FY10, it has a total landbank of 72,653 ha of which 58,940 ha are planted with oil palm.

 Due to the favourable age profile of its estates, SOPB has been generating above-industry yield.

 We are maintaining our Buy recommendation on SOPB for its favourable oil palm profile and undemanding P/E valuation. Its current P/E valuation of 8.2x for FY11 is at a discount as compared with plantation sector of 15x. We have arrived at a target price of RM4.30 based on a target P/E of 10x for FY11.