BWPT
Contact our analyst Achmadi
BUY
4th June 2024
Current price Rp 51
Target price Rp 75
4th June 2024
Current price Rp 51
Target price Rp 75
Quarterly Production Rebound
BWPT’s production rebounded in Q2-2024 across all segments—CPO, PK, and FFB—after facing seasonal trends and public holidays in Q1-2024. Despite the recovery, production remained lower compared to the previous year. The strongest growth came from PK, increasing by 5.12% QoQ, while CPO and FFB grew by 0.29% and 1.07%, respectively. We project total FFB production for 2024 to reach 1.23 MT, reflecting a 9.26% YoY decline.
BWPT’s production rebounded in Q2-2024 across all segments—CPO, PK, and FFB—after facing seasonal trends and public holidays in Q1-2024. Despite the recovery, production remained lower compared to the previous year. The strongest growth came from PK, increasing by 5.12% QoQ, while CPO and FFB grew by 0.29% and 1.07%, respectively. We project total FFB production for 2024 to reach 1.23 MT, reflecting a 9.26% YoY decline.
Don’t want the hassle of opening a trading account? We will do it all for you. You will be able to trade what you what, when you want, where you want. Sign up in seconds with phone or email 🔽
Solid Profitability
Despite lower productivity, BWPT’s Q2-2024 profitability improved, with revenue growing by 13.32% QoQ to IDR 1.07 trillion. However, 1H-2024 revenue fell by 6.18% YoY to IDR 2.01 trillion, mitigated by a 14.45% YoY reduction in COGS to IDR 1.42 trillion. Additionally, other income (expenses) dropped significantly by 53.01% YoY, largely driven by a 22.03% YoY decrease in interest expenses, reflecting the company’s strategy to reduce bank loans. Consequently, Net Profit Attributable to Parent Entity surged 60.89% YoY, with EBITDA up 19.08%. By the end of 2024, we forecast a 27.05% YoY growth in Net Profit Attributable to Parent Entity, reaching IDR 224.91 billion, and a 10.65% YoY increase in EBITDA, expected to reach IDR 1.24 trillion. We also expect a 4.66% YoY reduction in interest expenses due to a shift from bank loans to corporate bonds.
Improved Solvency through Bank Loan Reduction and Bond Issuance
BWPT’s solvency has improved significantly, as evidenced by its Q2-2024 Debt-to-Equity Ratio (DER) and Financial Leverage Ratio, which fell to 2.05x and 4.69x from 2.59x and 5.69x, respectively. This improvement reflects the company’s strategic shift to reduce bank financing and incorporate corporate bonds. Total Interest-Bearing Debt decreased by 13.11% YoY, with long-term bank loans down by 26.26% YoY. On July 11, 2024, BWPT raised IDR 61.85 billion through “Obligasi Berkelanjutan I Eagle High Plantations Tahap I Tahun 2024” at a 9.75% annual interest rate, maturing on July 20, 2025. By the end of 2024, we expect BWPT’s DER and Financial Leverage Ratio to decrease to 1.58x and 4.17x, with Interest-Bearing Debt down by 27.24%, reducing the outstanding bond to IDR 47.18 billion after amortization.
Valuation: BUY, 53% potential upside
Following Q2-2024 results, we revised our EV/EBITDA target to 5.20x. We maintain our "Buy" recommendation with a new target price of IDR 87/share, reflecting a valuation of 12.09x PER and offering a 53% potential upside.
Despite lower productivity, BWPT’s Q2-2024 profitability improved, with revenue growing by 13.32% QoQ to IDR 1.07 trillion. However, 1H-2024 revenue fell by 6.18% YoY to IDR 2.01 trillion, mitigated by a 14.45% YoY reduction in COGS to IDR 1.42 trillion. Additionally, other income (expenses) dropped significantly by 53.01% YoY, largely driven by a 22.03% YoY decrease in interest expenses, reflecting the company’s strategy to reduce bank loans. Consequently, Net Profit Attributable to Parent Entity surged 60.89% YoY, with EBITDA up 19.08%. By the end of 2024, we forecast a 27.05% YoY growth in Net Profit Attributable to Parent Entity, reaching IDR 224.91 billion, and a 10.65% YoY increase in EBITDA, expected to reach IDR 1.24 trillion. We also expect a 4.66% YoY reduction in interest expenses due to a shift from bank loans to corporate bonds.
Improved Solvency through Bank Loan Reduction and Bond Issuance
BWPT’s solvency has improved significantly, as evidenced by its Q2-2024 Debt-to-Equity Ratio (DER) and Financial Leverage Ratio, which fell to 2.05x and 4.69x from 2.59x and 5.69x, respectively. This improvement reflects the company’s strategic shift to reduce bank financing and incorporate corporate bonds. Total Interest-Bearing Debt decreased by 13.11% YoY, with long-term bank loans down by 26.26% YoY. On July 11, 2024, BWPT raised IDR 61.85 billion through “Obligasi Berkelanjutan I Eagle High Plantations Tahap I Tahun 2024” at a 9.75% annual interest rate, maturing on July 20, 2025. By the end of 2024, we expect BWPT’s DER and Financial Leverage Ratio to decrease to 1.58x and 4.17x, with Interest-Bearing Debt down by 27.24%, reducing the outstanding bond to IDR 47.18 billion after amortization.
Valuation: BUY, 53% potential upside
Following Q2-2024 results, we revised our EV/EBITDA target to 5.20x. We maintain our "Buy" recommendation with a new target price of IDR 87/share, reflecting a valuation of 12.09x PER and offering a 53% potential upside.
Previously
