Saturday, November 26, 2011

Astra Agro Lestari (AALI) - 51% Profit Growth

by Lauthandana Sec


Aali's net profit during the third quarter of 2011 reached Rp 1.9 trillion, grew 51% over the same period the previous year. Appreciation of the net profit bolstered by sales rise 39% YoY to Rp 7.9 trillion from the previous year only amounted to Rp 5.7 trillion.

Performance Aali positive until the third quarter-11 triggered the volume of FFB production rose 13% YoY to 3.4 million tonnes, CPO sales volume increased by 17% YoY to 889.917 tons, as well as the increase in average selling price of CPO 16% to $ 7.776 / kg and kernel is up 39% to $ 5.022 / kg.

Until 10M11, FFB and CPO production Aali respectively reached 3.9 million tons (+15% YoY) dan1.05 million tonnes (+17% YoY).


Sales Aali 9M11 reflects 76% of our estimate for 2011 amounting to Rp 10.5 trillion. Operating profit was 77% of our target is around Rp 3.5 trillion and net profit 72% of our estimate for 2011 valued at Rp 2.6 trillion.

FFB production Aali 9M11 reached 3.4 million tonnes, reflecting an estimated 73% of our FFB production by the end of 2011 at the level of 4.7 million tonnes.

Aali CPO sales volume up to September 2011 approximately 889.917 tons, an estimated 77% of our total sales volume of CPO to the end of 2011, which reached 1.2 million tons.

The average age Aali palm trees has reached 14 years. For the next 2 years, our predictions will Aali trouble finding a new land-related moratorium. But Aali will optimize land management and rely on land planted immature to sustain growth. Aali still have immature land area of ​​25.576 ha at 2012F. Currently in phase survey Aali search of new land in Kalimantan and Sulawesi.

Aali will add four palm oil mills in the next 3 years with a total investment value of approximately U.S. $ 12-14 million, 2 built in East Kalimantan, South Kalimantan and one in Central Sulawesi.

We expect the financial performance of Aali will be stable until 2012 and further increased since 2013 is supported by: 1) increase in CPO sales volume of 5-year CAGR of 8%, 2) the average selling price of CPO Aali CAGR 5 years we grew 7%.


We assume Aali 2011 sales grew 18% YoY to Rp 10.5 trillion, and our net profit estimate will be up 29% YoY to Rp 2.6 trillion.

Our recommendation for the stock Aali HOLD with TP Rp 23.550 per share based on the method of 10-year DCF with WACC assumption of 12.9%. TP values ​​provides a potential upside of about 7%. TP reflects the 2011F and 2012F PE of 14.3x and 10.8x and EV / ha 2011F and 2012F of U.S. $ 13.100 and U.S. $ 12.415. Based on the closing stock price yesterday, Aali shares traded at 10.1x 2012F PE and EV / Ha 2012F U.S. $ 11.476.

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