Petrafoods

Petrafoods: SCB upgrade to O/p from in-line and lifts TP to $4.45 from $3.75 on valuation grounds, noting that the disposal of its ingredients division to Barry Callebaut for US$950m, will result in a gain on disposal of US$106m. Apart from achieving a good price, mgt has removed the high capital (fixed assets and working capital) and more volatile earnings part of Petra’s portfolio, and with scope to pay an increased/special dividend. Add that category and geographic expansion opportunities exist and expect continued strong delivery from this standout Indonesia/ASEAN name. Excellent governance is a bonus.