Long-term positive venture but upside narrowed; downgrade to Hold. SOP's JV to secure two tankers does not come as a surprise as logistical support is increasingly crucial as SOP grows in size and sells its palm oil regionally. This small initial capital outlay of RM7.7m has broader implications for its longer-term plan to be a sizeable, integrated plantation player. That said, its share price has risen 60% since we initiated coverage on 2 Aug 2011. We downgrade the stock to Hold given a narrowed 4% upside to our RM7.20 TP (on 13x 2013 PER).

Maybank Research - 4 April 2012

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