-->

Bumitama Agri - Maybank Research 2022-02-28: Strong 4Q21 On Better-Than-Expected CPO ASP

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

Bumitama Agri - Strong 4Q21 On Better-Than-Expected CPO ASP


A beneficiary of spot prices in FY22E

  • Bumitama Agri (SGX:P8Z)'s FY21 core PATMI beat ours and street estimates by 10% on better CPO prices. As Bumitama Agri has little forward sales commitment in FY22E, it is poised to benefit from high CPO spot prices (coupled with higher FFB output growth guidance).
  • Following our EPS upgrade, we reiterate our BUY call on Bumitama Agri with a higher target price of S$0.98 after rolling forward our valuation to FY23E on unchanged 11x PER peg, its 5-year mean (from S$0.93 on 11x FY22 PER).
  • Bumitama Agri's Share Price trades at just 8x PER with attractive dividend yields of ~5%.



Bumitama Agri's FY21 core PATMI beat estimates by 10%

  • Stripping aside FX gain (IDR72b) and fair value gain of biological asset (IDR82b), Bumitama Agri posted a 2H21 core PATMI of ID1,117b (79% y-o-y) that lifted FY21 core PATMI to IDR1,687b (+47% y-o-y).
  • The strong 2H21 earnings were mainly lifted by high CPO ASP (Rp11,683/kg; +40% y-o-y) and PK ASP (Rp7,342/kg; +62% y-o-y) which more than offset lower sales (-7% y-o-y) while 2H21 output fell -16% y-o-y (Figs.2-3) due to seasonal crop pattern changes.


Guiding for 5-10% FFB growth for FY22E

  • In terms of FFB output, Bumitama Agri is targeting 5-10% FFB growth for FY22E (MIBG Research: +7% y-o-y). It is expecting crop pattern to normalise in FY22E with 1H:2H output at 48%:52%. We understand Bumitama Agri has little forward sales commitment in FY22E (that was locked-in earlier in FY21). Hence, Bumitama Agri is poised to benefit from present lofty spot prices.

Upgrading EPS forecasts mainly on higher CPO ASP






Ong Chee Ting CA Maybank Research | https://www.maybank-ke.com.sg/ 2022-02-28
SGX Stock Analyst Report BUY MAINTAIN BUY 0.980 UP 0.93



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......