KGI Securities Initiates Coverage On Don Agro International With An Outperform Recommendation

SINGAPORE,July 29,2021 --On 23 July 2021,the sell-side research arm of KGI Securities (Singapore) Pte Ltd initiated coverage on Don Agro International Limited ("Don Agro") and its subsidiaries (collectively the "Group"),one of the largest agricultural companies based in the Rostov region of Russia,with an Outperform recommendation and a DCF-backed 12-month target price of S$0.64. Read the full report at: http://donagroint.com/analyst-reports/.

Investment Thesis:

Market Leadership in the Rostov Region,Russia.Don Agro has been operating as a single entity for more than 10 years,a result of the privatisation of five collective farms. The group's good financial track record can be attributed to the experienced gained and the structured and hands-on farm management practices,which continue to be overseen by a senior management team who has been with the group since 2012.

Acquisition-led growth,supported by a healthy balance sheet.KGI expects growth to be primarily driven by acquisitions. With the purchase of Volgo-Agro LLC in 4Q2020,Don Agro added around 10,040 hectares to its land bank,increasing it by 19% to 63,240 hectares as at end-2020. The group is in a robust financial position to embark on more acquisition-led growth and to invest in new machinery,thereby increasing production yield. The Group has generated positive free cash flows since 2018 and was in a net cash position of S$7 million as at end-2020.

Meeting the demand of a growing world. Don Agro's key products (wheat,sunflower,corn,and raw milk) are witnessing global demand growth. The OECD-FAO forecasts that the expanding global population remains the key growth factor for agricultural demand.

About Don Agro International Limited

Don Agro,together with its subsidiaries,is one of the largest agricultural companies in the Rostov region in Russia principally engaged in the cultivation of agricultural crops and production of raw milk. The Group has a total controlled land bank of 67,340 hectares,of which 54,420 hectares are arable land. The Group owns approximately 17,200 hectares of its controlled land bank. In addition,the Group is one of the top farms in terms of milk production in the Rostov region,and owns more than 4,000 heads of dairy cattle including approximately 2,200 milking cows. [http://donagroint.com/]

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