Her Aug 12 fair value of $1.05 was in turn an increase from an earlier fair value of 97.5 cents.
"We continue to like the stock from a total returns perspective," writes Lim in her Aug 27 note.
Besides reporting strong earnings momentum for 1HFY2025, which beat expectations, the company is planning to pay an interim dividend of 3.63 cents, which is triple that paid for the year earlier period, and also implying a payout level that is at the higher end of Bumitama's new revised dividend policy of between 40 and 60% of distributable income.
"There is also a possibility of increased investor interest and positioning in this counter amidst ongoing equity market reforms, in our view, given that Bumita Agri is a small/mid-cap stock with a double-digit return on equity (ROE) that is paying attractive dividends," says Lim.
She has kept her earnings forecasts for now but has raised her target PE multiple from 8.1x FY2025 earnings to 9.2x, which is around a quarter of a sd above Bumitama's 10-year historical average forward PE of 8.6x.
"The higher P/E multiple is supported by Bumitama’s commitment to enhancing shareholder returns by raising dividends.
"We also note that, despite the recent share price rally, Bumitama continues to trade at a fairly attractive forward 12-month dividend yield of around 6%," she adds.
Bumitama Agri shares changed hands at $1.11 as at 2.26 pm, down 0.89% for the day but up 29.07% year to date.
