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AALI

Contact our analyst Revita
35% upside, Buy
16th February 2023
Current price Rp 8,175
Target price Rp 11,040

9M22 CPO production -14%
As of 9M22, AALI produced 984,000 tons of CPO, a decrease of -14% compared to the same period last year. This decrease was accompanied by a decrease in FFB processed of -12.0% YoY because of a long dry season in 2019. For 2023 our production forecast conservatively targets growth  of -3% YoY as the majority of plants are mature and yield has been increasing over the last 10 years. We believe, similar with last year, AALI production for 2023 will mostly come from 3rd party fruit purchases and Plasma Plantations with a slight increase from nucleus plantation yield optimization. We adjust our target for FFB and CPO production in 2023 to 3.9 mn tons and 1,21 mn tons respectively. We expect production in 2023 will remain affected by the long dry season in 2019 as it takes about four years for an oil palm tree to produce fruit which is large enough for processing.




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Maintain double digit EBITDA margin
As of 9M22, AALI recorded a decrease in revenue  by -8% YoY  to IDR 16.5 trillion. The decrease in revenue was in line with the decrease in production of FFB and CPO, which was down  by -6% and -14% YoY respectively. The net profit attributable to shareholders in 9M22 was IDR 1.22 trillion or -17.2%YoY. We estimate net profit in 2022-2023F will reach IDR 1.67 trillion and IDR 1.23 trilllion respectively compared to IDR 1.97 trillion in 2021A as we believe the CPO price will be lower than 2021A due to better rainfall and a resulting higher industry output. Despite lower revenue and net profit, we maintain our EBITDA margin and double digit compound average growth of 16% during 2023-2024F compared to 16.9% in 2022F

Valuation: 35% upside
Based on the 9M22 result, We adjust our TP within one year to IDR 11,040, EV/EBITDA of 6.32x and EV/ha of 3.245 USD/Ha or trading at 18.2x PER. With 35% upside, we maintain our recommendation  to BUY.

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Previously
​AALI Oct2022
​AALI Jul2022
​AALI May2021
PT. Binaartha Sekuritas

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