CLSA CPO sector - Results wrap by Wilianto

The 1Q10 results show that Indonesian plantations benefit from recovery in CPO price with combined net profit up 44% yoy and operating profit up 60% yoy. However, the seasonally low production in 1Q10 means that qoq comparison still shows a sharp decline and the result is just a fraction of full year estimate. Wli thinks a combination of higher CPO price and better production volume in 2H10 will allow plantation companies to meet our full year expectation. Downside should be limited here since our full year price assumption of Rp7,100/kg is not aggressive when 1Q alone averaged Rp7,083. Maintain Overweight.