AALI
Contact our analyst Revita
40% upside, Buy
13th July 2022
Current price Rp 9275
Target price Rp13000
13th July 2022
Current price Rp 9275
Target price Rp13000
Slower 4M22 production
As of 4M2022, FFB and CPO production decreased -15.5% YoY and –16.9% YoY respectively driven by a long dry season in 2019. In addition to the weather low production is also the result of the Covid 19 pandemic which limited mobility and production in Plasma plantations. For 20222 we are targeting production growth of 5% YoY as the majority of plants are mature and yield has already increased over the last 10 years. AALI’s planted area age was a high 15.8 years in 2021 compared to 15.5 years in 2020. As AALI targets to complete replanting of another 5,000 ha this year. nucleus area will decrease while the plasma area will increase. The increase in production this year will therefore mostly come from third party and Plasma Plantations with a slight increase from nucleus plantation yield optimization as digitalization has helped to overcome work and production constraints during the pandemic. We are targeting FFB and CPO production in 2022 of 4,54 mn tons and 1,41 mn tons respectively. We expect production in 2022 will now improve with more favorable weather.
As of 4M2022, FFB and CPO production decreased -15.5% YoY and –16.9% YoY respectively driven by a long dry season in 2019. In addition to the weather low production is also the result of the Covid 19 pandemic which limited mobility and production in Plasma plantations. For 20222 we are targeting production growth of 5% YoY as the majority of plants are mature and yield has already increased over the last 10 years. AALI’s planted area age was a high 15.8 years in 2021 compared to 15.5 years in 2020. As AALI targets to complete replanting of another 5,000 ha this year. nucleus area will decrease while the plasma area will increase. The increase in production this year will therefore mostly come from third party and Plasma Plantations with a slight increase from nucleus plantation yield optimization as digitalization has helped to overcome work and production constraints during the pandemic. We are targeting FFB and CPO production in 2022 of 4,54 mn tons and 1,41 mn tons respectively. We expect production in 2022 will now improve with more favorable weather.
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Higher bottom line
In 1Q22 AALI revenue increased by 30.7% YoY from IDR 5,035 billion to IDR 6,581 billion. The increase in net revenue is in line with the rise in the selling price of CPO by 52.7% YoY, despite the weakness in production and sales volumes. As a result AALI was able to book a net profit of IDR 483 billion, up by 198% YoY. We estimate bottom line profit in 2022F will reach IDR 2.9 trillion compared to IDR. 1.97 trn in 2021A.
Valuation: 40% upside
We estimate a TP within one year of IDR. 13,000, EV/EBITDA at 6.29x and EV/ha of 4,151 USD/Ha or trading at 8.41x PER. With 40% upside, we recommend to BUY.
In 1Q22 AALI revenue increased by 30.7% YoY from IDR 5,035 billion to IDR 6,581 billion. The increase in net revenue is in line with the rise in the selling price of CPO by 52.7% YoY, despite the weakness in production and sales volumes. As a result AALI was able to book a net profit of IDR 483 billion, up by 198% YoY. We estimate bottom line profit in 2022F will reach IDR 2.9 trillion compared to IDR. 1.97 trn in 2021A.
Valuation: 40% upside
We estimate a TP within one year of IDR. 13,000, EV/EBITDA at 6.29x and EV/ha of 4,151 USD/Ha or trading at 8.41x PER. With 40% upside, we recommend to BUY.
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