Bumitama Agri - Maybank Kim Eng 2020-11-11: Looking To End The Year On A Good Note

BUMITAMA AGRI LTD. (SGX:P8Z) | SGinvestors.io 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






Ong Chee Ting Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2020-11-11
SGX Stock Analyst Report BUY MAINTAIN BUY 0.78 UP 0.740



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......