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BWPT

Contact our analyst Revita
New Target Price IDR. 580
April23, 2018
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Strong production growth
  • 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.
download full report here
Previously
BWPT Jan 3, 2018
PT. Binaartha Sekuritas

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+62215206678 | email: [email protected]
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