BWPT
Contact our analyst Revita
New Target Price IDR. 580
April23, 2018
Strong production growth
Back to profit in 2018
Valuation: Reiterate BUY, with higher potential upside
- We maintain our BWPT’s production target will remain on track for higher productivity from the increase in mature area and improved weather.
- In April we predicted that production will grow higher following the rainfall pattern that seems to be likely stronger than March.
- Based on 2017 production, we adjust our full year target to 1.57mn tons in 2018F and 1.80mn tons in 2019F.
- We expect a much better outlook for 2018 in production and prices.
- We adjust our target for top line based on 2017 result, to 13% growth in CAGR during 2018-2019F.
Back to profit in 2018
- We maintain our belief that bottom line profitability is coming for BWPT.
- 4Q17, BWPT managed to book net profit to IDR. 23bn
- BWPT even has free cash flow positive and total debt starting to reduce in 2017FY.
- We adjust our target for 2018F and 2019F to net profit of IDR. 86bn and IDR. 190bn respectively, supported by the maturing of the young plantations.
Valuation: Reiterate BUY, with higher potential upside
- Based on our DCF (WACC 6.37%), we maintain our BUY recommendation, with a higher TP of IDR. 580/share, reflecting a valuation of 10.17x EV/EBITDA and significant potential upside.
- Since our latest update on Jan till now, shares price has increased more than 50% upside.
Previously
