OSK Research has maintained a "sell" call on IOI Corporation and lowered the target price to RM4.39 from RM4.41 due to aging trees despite the higher crude palm oil (CPO) and palm kernel oil (PKO) prices.
OSK Research in a research note today said the aging trees combined with the adverse weather had reduced the palm oil fresh fruit bunch production for the nine-month period by 10.4 per cent.
"IOI will continue to struggle with its production due to aging trees, which caused its production to decline for the past two consecutive years," it said.
However, the weaker production was offset by the higher CPO and PKO prices, resulting in the plantation segment, recording a 21.8 per cent earnings before interest and taxes growth, it added.
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