Gozco Plantations (GZCO IJ) is showered with abundant land bank
availability and young age profile (average age of 7 compared to peers of
10). Factoring additional mature hectarage of 2.1k ha, we estimate 20%
growth in CPO production, leading to 10% EPS growth in 2012. But this is
just the beginning, with FFB production Cagr of 52% from 2011-14CL, we
believe Gozco full potential to kick off in 2014. We set our TP at Rp
410/sh, implying 10x 2013 P/E, 30% discount to Astra Agro. O-PF.
Jumat, 13 April 2012
Sampoerna Agro, Inferior margin, CLSA
Sampoerna Agro (SGRO IJ), the fourth-largest plantation company by
planted area, would likely to see inferior margin compared to its peers,
particularly during strong CPO price environment. The fact that their
plasma production accounts for 40% of company’s plantation area would
translate to higher cost – of which about 70-75% of production cost still
come from FFB purchased. Re-initiate with U-PF on its inferior margin and
more volatile production.
planted area, would likely to see inferior margin compared to its peers,
particularly during strong CPO price environment. The fact that their
plasma production accounts for 40% of company’s plantation area would
translate to higher cost – of which about 70-75% of production cost still
come from FFB purchased. Re-initiate with U-PF on its inferior margin and
more volatile production.
Lonsum, Superior profitability, CLSA
We like London Sumatra (LSIP IJ) on its superior cost structure and
production growth profile. We expect to see company’s oil yield
improving to 4.5-4.8tons/ha in 2012-13, from 4.3tons/ha in 2011
supported by its continued infrastructure improvement coupled with
maturing age profile. Its Ebit margin also stands out at 41-42% range,
the highest amongst CPO companies under our coverage. We set our TP
at Rp3,600/sh, implying 13x 2013 P/E, 10% discount to Astra Agro. BUY.
production growth profile. We expect to see company’s oil yield
improving to 4.5-4.8tons/ha in 2012-13, from 4.3tons/ha in 2011
supported by its continued infrastructure improvement coupled with
maturing age profile. Its Ebit margin also stands out at 41-42% range,
the highest amongst CPO companies under our coverage. We set our TP
at Rp3,600/sh, implying 13x 2013 P/E, 10% discount to Astra Agro. BUY.
Astra Agro, Mounting production cost, CLSA
Astra Agro Lestari (AALI IJ) is set to see production growth slowing to
5% Cagr over 2011-14CL as plantation ages, exacerbated by lack of land
bank and rising costs. Third party FFB dependency will continue to erode
margin, while rising wage will lead to 5% higher production costs. We
thus trim our 2012/13 EPS by 12-16% respectively elaborating new
export tax as well as higher production costs. We set our TP at
Rp24,000/sh, based on 14x FY13 EPS, its 5-yrs mean P/E. Re-initiate
with U-PF.
5% Cagr over 2011-14CL as plantation ages, exacerbated by lack of land
bank and rising costs. Third party FFB dependency will continue to erode
margin, while rising wage will lead to 5% higher production costs. We
thus trim our 2012/13 EPS by 12-16% respectively elaborating new
export tax as well as higher production costs. We set our TP at
Rp24,000/sh, based on 14x FY13 EPS, its 5-yrs mean P/E. Re-initiate
with U-PF.
Astra Intl, The magnificent Honda, CLSA
Honda is not slowing down even after a victory over Yamaha last year. It
gained another 4% lead over Yamaha in 1Q12, supported by successful
launch of new model, with more to come. Impact from higher down
payments on financing and potential subsidized fuel price hike are risks to
earnings, but Astra is a much more diversified company now, with less
reliance on 2W market. With demand unleashes on the under-penetrated
4W market and UNTR business expansion unfolds, we expect mkt cap to
reach US$50bn by 2015. Maintain O-PF.
gained another 4% lead over Yamaha in 1Q12, supported by successful
launch of new model, with more to come. Impact from higher down
payments on financing and potential subsidized fuel price hike are risks to
earnings, but Astra is a much more diversified company now, with less
reliance on 2W market. With demand unleashes on the under-penetrated
4W market and UNTR business expansion unfolds, we expect mkt cap to
reach US$50bn by 2015. Maintain O-PF.
Indonesia Plantation, Supply tightness, CLSA
We believe palm oil supply will be tight in the near-term as weather
volatility prevails amid lack of new plantings. Particularly for Indo,
production growth of palm oil will likely decelerate to 6% this year from
2011’s 8% as trees enter biological slowdown while domestic demand is
seen rising. As a consequence, we uplift our CPO price assumption to
RM3,300/t this year. Amongst Indo plantation companies, we like LSIP
given its superior profitability and strong production growth potential.
volatility prevails amid lack of new plantings. Particularly for Indo,
production growth of palm oil will likely decelerate to 6% this year from
2011’s 8% as trees enter biological slowdown while domestic demand is
seen rising. As a consequence, we uplift our CPO price assumption to
RM3,300/t this year. Amongst Indo plantation companies, we like LSIP
given its superior profitability and strong production growth potential.
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