Sipef : When panic makes room for reason
We hosted Sipef on our Small & Mid Cap Conference (9-10 December) and during the meeting we gained confidence that the recent share price reaction is exaggerated. On the one hand, we don’t think the new measures will change anything to FY21 estimates, and on the other hand we believe that there is a serious chance of the Indonesian government coming back on its decision. Given the long term fundamentals for sustainable palm oil producers like Sipef, we reiterate our Buy recommendation and € 55 TP (24% upside).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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