CIMB Sampoerna Agro Company update - Catalysts remain to be seen

(SGRO IJ / SGRO.JK, UNDERPERFORM - Maintained, Rp1,750 - Tgt. Rp1,540, Plantations)

SGRO's April-May 09 FFB production appeared to have exceeded its weak 1Q09 production. Despite a more positive outlook, we remain cautious, awaiting more signs of an improvement. We maintain our UNDERPERFORM rating and would turn more positive if we can see a stronger recovery in production and/or value-enhancement from its proposed acquisition of a sago plantation. Our target price is unchanged at Rp1,540, based on 9x CY10 earnings.