Despite the smuggling-induced volume and price weaknesses in the first half of the year, we leave our FY'23 top-line expectation for OKOMU unchanged at N83.24 billion. This optimism is hinged on the expected impact of the over 13.7%-naira depreciation at the parallel market between June 2023 and August 2023 (or weaker 27.9% YoY), which should support local CPO prices in H2'23. We, however, lower our earnings expectation due to the likely sustenance of inflation-induced margin pressures in FY'23.
Broad adjustments to our model, including a reduced equity risk premium, resulted in a slightly higher 12-month TP of N253.07 (vs N250.30 previously). We retain a SELL rating on the counter.
