Revealing The Unprojected Performance of Astra Agro Lestari

Bareksa.com - We maintain our BUY recommend on AALI with a new target price of Rp26,400 (previous target Rp25.900). Sales of AALI’s CPO and Kernel in 2013 was +5%/+4% above our projection. As a result, we increase our FY2013 sales/net profit estimation by +4%/11% to Rp12.8 tn/Rp1.7 tn, or 111%/110% compared to consensus.

According to consensus, sales of AALI in 2013 is Rp11.47 trillion, while actual sales of CPO and Kernel surpasses consensus reaching Rp12,6 trillion (not including PKO and PKE). We estimate that revenue in FY2013 of AALI will reach Rp12.87 trillion or 12% above consensus.

AALI’s CPO sales volume in December 2013 was recorded at 166.8 thousand tons. That figure increased by 7% YoY or 9.8% MoM compared to last year’s achievement. These results formed 12M2013 sales amounting to 1.57 million tons, an increase of 10.8 % YoY. The result was slightly above our estimation as it formed 101% above our target in FY2013.

AALI’s ASP in December rose significantly to Rp8,753/kg which is an all time high. The ASP increased 43% YoY and 6% MoM. On the other hand, 12M2013 ASP reached Rp7,277/kg, an edged down of -0.6 % YoY. The 12M13 ASP of AALI is +2.8% above our expectation of Rp7.000/kg.

Currently AALI trades at a P/E level of 2014F/15F 13.4x/9.7x respectively. An attractive price considering FY14 EPS growth of 44% and ROE of 22%.

By December 2013, the sales volume of AALI’s CPO grew to 166.8 thousand tons, an increase of 7% YoY or 9.8% MoM. That figure put the Company’s sales volume in December hit record high.

CPO sales realization in 12M2013 reached 1,577,484 tons, as it increased by 10.8% YOY. These results reached 101% of FY2013 our sales volume target of 1.56 million tons.

The 12M13 CPO production of AALI was recorded at 1,538,658 tons, an increase of 4.2% YOY. The growth was the lowest in the last 3 years where CPO production grew by 14%/16 in 2011/2012 respectively. The low growth in CPO production was due to lower FFB production in 12M2013 which went down -6.8% YoY.

AALI’s CPO ASP in December 2013 was at record high of Rp8.753/kg. The ASP increased by 43% YoY and 6% MoM. While the 12M2013 ASP reach Rp7.277/kg which was slightly lower compare to last year (-0.6 % YoY). The 12M13 ASP of AALI is +2.8% above our expectation of Rp7,000/kg.

Vs Our projection

AALI’s CPO derived revenue in 2013 amounted to Rp11.48 trillion where it increased +10% YOY. This results is 5% above our target of Rp10.9 trillion.

Similar trend is shown from Kernel, where its ASP reached 108% of our target. That stated translates to a 44% YoY increase of revenue in 2013 amounting to Rp1.16 trillion that forms 104% of our target projection.

With this result, the consolidated sales in 2013 positions AALI above market estimates. Consensus’ estimates for the Company’s earnings in 2013 is Rp11.47 trillion, while revenue from palm oil products and Kernel has reached Rp12,6 trillion. We forecast that revenue in FY2013 will reach Rp12.87 trillion or 12 %/5% above consensus and our target respectively. As a result, we increase our FY2013 sales/net profit estimation by +4%/11% to Rp12.8 tn/Rp1.7 tn, or 112%/113% compared to consensus.

*Marolop A. Nainggolan is Head of Research of PT Buana Capital. This article is part of The Equity Research of PT Buana Capital (www.buanacapital.com)