AALI
Contact our analyst Revita
27% upside, Buy
8th November 2023
Current price Rp 7025
Target price Rp 8920
8th November 2023
Current price Rp 7025
Target price Rp 8920
In 9M23, FFB production grew by +4.84%
As of 9M23, AALI produced 977,000 tons of CPO, a -0.71% decrease compared to the same period last year. On the other hand, FFB total production and FFB processed increased with positive single-digit growth during 9M23 of +4.84% and +1.24%, respectively. This increase is in line with the growth in FFB nucleus production at +6.2% YoY. AALI also produced Crude Palm Oil (CPO) as of 9M23, totaling 977,000 tons, a decrease of -0.7% compared to the same period in 2022. This decrease aligns with the decline in Kernel production by 1.2% to 210,000 tons during 9M23 compared to the same period in 2022 with 213,000 tons. For 2023, we maintain our production forecast targets with a conservative 3% year-on-year growth due to the mature age of the plants, but increasing yields seen over the past decade. Based on the 9M23 results, the adjusted targets for FFB and CPO production in 2023 are 4.40 million tons and 1.28 million tons, respectively.
As of 9M23, AALI produced 977,000 tons of CPO, a -0.71% decrease compared to the same period last year. On the other hand, FFB total production and FFB processed increased with positive single-digit growth during 9M23 of +4.84% and +1.24%, respectively. This increase is in line with the growth in FFB nucleus production at +6.2% YoY. AALI also produced Crude Palm Oil (CPO) as of 9M23, totaling 977,000 tons, a decrease of -0.7% compared to the same period in 2022. This decrease aligns with the decline in Kernel production by 1.2% to 210,000 tons during 9M23 compared to the same period in 2022 with 213,000 tons. For 2023, we maintain our production forecast targets with a conservative 3% year-on-year growth due to the mature age of the plants, but increasing yields seen over the past decade. Based on the 9M23 results, the adjusted targets for FFB and CPO production in 2023 are 4.40 million tons and 1.28 million tons, respectively.
Sign up here to trade what you want, when you want & wherever ⬇️ you are ⬇️
Strong 3Q23 bottom line growth
As of 9M23, AALI experienced a 5.1% year-on-year decrease in revenue, amounting to IDR 15.7 trillion. This decline aligns with the 15.8% year-on-year decrease in the average CPO price and the 44.8% year-on-year decrease in the average Kernel price during 9M23. However, on a QoQ basis, in 3Q23, AALI posted very strong growth in bottom-line net profit of +203% QoQ as revenue grew by +36% QoQ compared to 2Q23. The increase in net profit in 3Q23 was also in line with an increase in COGS expenses and operating expenses that were not significant and therefore manageable. Based on the 9M23 results, we estimate that net profit in 2023-2024F will reach IDR 909 billion and IDR 1.28 trillion, respectively, compared to IDR 1.73 trillion in 2022FY, as the CPO price is expected to be lower in 2023 due to improved rainfall and higher industry output. Despite lower revenue and net profit, we estimate AALI's average EBITDA margin to be 14% during 2023-2024F, compared to 18.6% in 2022FY.
Valuation: 27% upside
Based on the 9M23 results, the adjusted target price (TP) for AALI within one year is IDR 8,920, representing an EV/EBITDA ratio of 5.26x and an EV/ha ratio of 3,129 USD/Ha, or trading at 13.39x PER. With a projected 27% upside, we maintain our recommendation to BUY.
As of 9M23, AALI experienced a 5.1% year-on-year decrease in revenue, amounting to IDR 15.7 trillion. This decline aligns with the 15.8% year-on-year decrease in the average CPO price and the 44.8% year-on-year decrease in the average Kernel price during 9M23. However, on a QoQ basis, in 3Q23, AALI posted very strong growth in bottom-line net profit of +203% QoQ as revenue grew by +36% QoQ compared to 2Q23. The increase in net profit in 3Q23 was also in line with an increase in COGS expenses and operating expenses that were not significant and therefore manageable. Based on the 9M23 results, we estimate that net profit in 2023-2024F will reach IDR 909 billion and IDR 1.28 trillion, respectively, compared to IDR 1.73 trillion in 2022FY, as the CPO price is expected to be lower in 2023 due to improved rainfall and higher industry output. Despite lower revenue and net profit, we estimate AALI's average EBITDA margin to be 14% during 2023-2024F, compared to 18.6% in 2022FY.
Valuation: 27% upside
Based on the 9M23 results, the adjusted target price (TP) for AALI within one year is IDR 8,920, representing an EV/EBITDA ratio of 5.26x and an EV/ha ratio of 3,129 USD/Ha, or trading at 13.39x PER. With a projected 27% upside, we maintain our recommendation to BUY.
Previously
