AALI
Contact our analyst Achmadi
14% upside, Buy
14th October 2024
Current price Rp 6825
Target price Rp 7750
14th October 2024
Current price Rp 6825
Target price Rp 7750
Improved Productivity in Q2-2024
AALI’s production increased by 16.47% in Q2-2024 compared to Q1-2024, totaling 1.308 million tons. Crude Palm Oil (CPO) led with 20.50% quarter-on-quarter growth, while Fresh Fruit Bunches (FFB) and Palm Kernel rose by 14.99% and 22.00%, respectively. However, production for the first half of 2024 was 15.03% lower year-on-year at 2.43 million tons, primarily due to a -11.71% year-on-year drop in Q1-2024. By the end of 2024, total production is forecasted to reach 5.11 million tons, down -13.33% from 2023, with FFB seeing the largest decline at -13.86%, followed by CPO (-11.91%) and Palm Kernel (-11.55%).
AALI’s production increased by 16.47% in Q2-2024 compared to Q1-2024, totaling 1.308 million tons. Crude Palm Oil (CPO) led with 20.50% quarter-on-quarter growth, while Fresh Fruit Bunches (FFB) and Palm Kernel rose by 14.99% and 22.00%, respectively. However, production for the first half of 2024 was 15.03% lower year-on-year at 2.43 million tons, primarily due to a -11.71% year-on-year drop in Q1-2024. By the end of 2024, total production is forecasted to reach 5.11 million tons, down -13.33% from 2023, with FFB seeing the largest decline at -13.86%, followed by CPO (-11.91%) and Palm Kernel (-11.55%).
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Significant Profit Growth
Despite lower productivity, AALI remained profitable. Net income attributable to the parent entity grew by 36.31% year-on-year, reaching IDR 501 billion, supported by a 9.82% rise in net sales. Interest income surged by 95.63%, and EBITDA increased by 16.03% to IDR 1.48 trillion. We expect profit attributable to the parent entity to grow by 14.65% to IDR 1.21 trillion by year-end 2024, with EBITDA reaching IDR 3.19 trillion, a 6.77% increase.
Stable Solvency
As of June 2024, AALI maintained a stable solvency ratio at 0.19x, rising slightly by 0.01x from last year. This was aided by a 57.17% reduction in long-term loans, though the Current Portion of Long-Term Loans surged by 492.53x. We project the Debt-to-Equity ratio to remain at 0.19x through December 2024.
Valuation: 14%, Upside, Buy
We have revised our EV/EBITDA target to 4.27x based on the Q2-2024 results and maintain a Buy recommendation with a target price of IDR 7,750 per share, implying a 12.32x PER and a 14% potential upside.
Despite lower productivity, AALI remained profitable. Net income attributable to the parent entity grew by 36.31% year-on-year, reaching IDR 501 billion, supported by a 9.82% rise in net sales. Interest income surged by 95.63%, and EBITDA increased by 16.03% to IDR 1.48 trillion. We expect profit attributable to the parent entity to grow by 14.65% to IDR 1.21 trillion by year-end 2024, with EBITDA reaching IDR 3.19 trillion, a 6.77% increase.
Stable Solvency
As of June 2024, AALI maintained a stable solvency ratio at 0.19x, rising slightly by 0.01x from last year. This was aided by a 57.17% reduction in long-term loans, though the Current Portion of Long-Term Loans surged by 492.53x. We project the Debt-to-Equity ratio to remain at 0.19x through December 2024.
Valuation: 14%, Upside, Buy
We have revised our EV/EBITDA target to 4.27x based on the Q2-2024 results and maintain a Buy recommendation with a target price of IDR 7,750 per share, implying a 12.32x PER and a 14% potential upside.
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