Sipef Time to harvest the fruits
Following the publication of the FY24 results, we have revised our estimates to the upside. While production the output in FY24 disappointed, we expect production to structurally grow over time, driven by maturing plantations such as South-Sumatra, as well as the recovery from the volcanic eruption in PNG. Together with the ongoing high CPO prices and lower capex intensity in the years ahead, this should boost FCF, allowing for additional shareholder remuneration. Based on today's attractive valuation, we reiterate our Buy but increase our TP from € 64.0 to € 81.0 ps.Sipef is a holding company. Through its subsidiaries and associated companies, Co. is primarily engaged in the development and production of sundry commodities, including palm oil, palm kernels, tea, tropical fruits and flowers, bananas, pineapples, ornamental plants, guava, pepper and natural rubber. Palm oil, which is Co.'s most important commodity, is used within the cosmetics industry, in soaps and detergents, as a supplement to cattle and poultry feed, for production of protein, and for several other purposes. In addition, Co. provides management, marketing and consultancy services in the agro-industry.
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