BUMITAMA AGRI LTD. (SGX:P8Z)
Bumitama Agri - Looking To End The Year On A Good Note
Expect Bumitama Agri's 4Q20 results to be stronger
- Accelerated fertilizer application, unrealized FX losses on its USD debts and an estimated net inventory build-up of ~15,459t in 3Q have all contributed to Bumitama Agri (SGX:P8Z)'s flattish y-o-y 3Q20 headline PATMI.
- We expect Bumitama Agri's 4Q20 headline profits to be stronger q-o-q as output peaks in 4Q coupled with higher CPO ASP, and also lower fertilizer cost.
- Following our EPS revisions, we raise our Target Price for Bumitama Agri to S$0.78 on 13x 2021 PER peg (its updated 5-yr mean; from S$0.74 on 14.5x 2020 PER) as we rolled forward our valuation year.
- Bumitama Agri's 4.5% dividend yield is attractive. Maintain BUY.
Estimated 9M core PATMI above expectations
- Based on an executive summary of key financial and operational information of its 9M20 performance, Bumitama Agri reported a 3Q20 headline PATMI of IDR191b (+1% y-o-y, +6% q-o-q), bringing 9M20 headline PATMI to IDR632b (+49% y-o-y).
- As there is a lack of detailed disclosure for its 9M results, we have conservatively assumed its unrealised FX loss at Rp200b which we then estimate its 9M20 core PATMI at IDR782b (+113% y-o-y); which would have met 82%/79% of our/ consensus full-year estimates.
3Q hurt by higher fertiliser, FX loss & stock build-up
- Bumitama Agri's 3Q20 headline PATMI was flat y-o-y as higher revenue (+7% y-o-y mainly on higher CPO ASP) was offset by accelerated fertiliser application and also unrealised FX losses on its USD debts.
- There was also a net inventory build-up of +15,459t in 3Q (and +45,040t for 9M) due to timing of a shipment that should be recognised as sales in 4Q20.
EPS revised on CPO price and output changes
- Bumitama Agri has maintained its FY20 FFB growth guidance of -5%-0% y-o-y (9M: -6% y-o-y) and anticipates FFB output to peak in 4Q20. While we raised our industry-wide CPO ASP assumptions to MYR2,660/t (from 2,400), we have also cut our 2020 FFB output by 6%, implying –5% y-o-y growth (from +1% y-o-y).
- For 2021, we raised our industry-wide CPO price to MYR2,500/t (from 2,400) and cut Bumitama Agri’s FY21/ FY22 output by -7%/-7% to 2.30mt/2.42mt (implying a +8%/+5% y-o-y growth). Our FY20E/21E/22E EPS forecasts are revised by +8%/0%/-10% respectively.
- See Bumitama Agri Share Price; Bumitama Agri Target Price; Bumitama Agri Analyst Reports; Bumitama Agri Dividend History; Bumitama Agri Announcements; Bumitama Agri Latest News.
Ong Chee Ting
Maybank Kim Eng Research
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https://www.maybank-ke.com.sg/
2020-11-11
SGX Stock
Analyst Report
0.78
UP
0.740
