The spread of COVID-19 will reduce supply and demand for CPO, the slow replanting program, and the potential of weather with low rainfall in 2020. We estimate the prices of CPO to hover at MYR2,050/tonne-MYR2,120/tonne, lower than 2019 by considering the China’s sluggish consumption until 3Q20. But, B30 program is still the main catalyst for CPO in Indonesia, and we recommend BUY on AALI and LSIP with 2020F EV/ha of USD9,865/ha and USD7,340/ha.
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