KUALA LUMPUR: Innoprise Plantations Bhd will continue to outperform, even though crude palm oil (CPO) prices are in freefall.

RHB Research said that with attractive dividend yields of 10-15 per cent for the financial years 2022 (FY22) to FY24, the research firm believes Innoprise Plantations is an attractive dividend play within the plantation sector, in light of the cyclical CPO price downtrend. 

It said Innoprise's young plantation maturity profile should translate to robust future production growth, helping offset the impact of the lower average selling price (ASPs). 

As a pure upstream player, RHB Research said Innoprise's financial performance and share price depend on CPO prices' performance. 

Given its sensitivity to CPO prices, the firm said this stock performs well in times of rising CPO prices and vice versa. 

"However, we highlight that Innoprise continued to outperform, even though CPO prices were in a freefall. Its share price only declined by 14 per cent despite CPO prices dropping 49 per cent from the peak," it said.

RHB Research has projected a three-year future earnings compounded annual growth rate (CAGR) of -5.1 per cent.

The firm said this is in line with its declining CPO price per tonne assumptions of RM5,100 for FY22, RM3,900 for FY23 and RM3,500 for FY24, but offset by continuing positive fresh fruit bunches (FFB) growth of 2.8-7.8 per cent during the period. 

"We projected a RM1.75 fair value on the stock based on ten times FY23 earnings," it added.

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