Rice prices likely to be low. The Food and Agriculture Organization of
the United Nations (FAO) published its annual world rice outlook last
week. The pertinent points stated are production exceeds supply and
inventory levels are at record levels; the quick conclusion is that
global rice prices will likely trend down. This is good news for Bernas
as it will be able to source rice at lower cost and help boost margins
and profits. No change to our earnings forecasts which have incorporated
margin expansion. We maintain our Hold call given the limited upside to
our DDM-based RM3.40 target price.
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Source: Maybank Research - 9 May 2012
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