On the back of rising costs, falling yields and little chance for landbank expansion, planters may need to diversify in order to boost their bottom lines. Hoe highlights that some planters have already diversified into other industries like property, fruit farming, glove manufacturing and dairy farming.
RHB Bank Singapore has maintained “neutral” on the plantation sector with “neutral” calls on all Singapore-listed planters under the analysts’ coverage namely Wilmar International (SGX:F34
) , Bumitama Agri (SGX:P8Z) , First Resources (SGX:EB5) and Golden Agri-Resources (SGX:E5H) .
Analyst Hoe Lee Leng have also reviewed the environmental, social and governance (ESG) credentials of all the stocks under RHB’s coverage, finding that the regional sector’s overall ESG score has ticked up to 2.6 from 2.5 given the planters’ readiness in complying with the EUDR (EU Regulation on Deforestation-free Products).
