by Lauthandana Sec
Net income LSIP along the first 9 months of 2011 amounting to Rp 1.3 trillion, up 104% compared to 9M2010 only Rp 642 billion. Furthermore, sales grew 47% YoY from Rp 2.4 trillion to Rp 3.5 trillion.
Increased net income LSIP supported by FFB production increased by 24% YoY, the improved productivity of TBS core of 12.2 tonnes / ha to 13.4 tonnes / ha, volume sales of palm oil products such as palm oil grown up 28% Toy, PK up 19%, and the seeds grow and 39% YoY increase in average selling price of CPO from Rp 7.576 / kg to Rp 9.108 / kg.
Total sales reflect LSIP 9M2011 70.0% of our sales forecast for the period 2011 worth Rp 5 trillion. Operating profit of approximately 71.9% of our estimate for 2011 amounting to Rp 2.2 trillion and net profit of approximately 75.3% of the target until the end of our year to Rp 1.7 trillion.
FFB production until the third quarter-11 1.4 million tonnes, up 24% YoY. Achievement of production during the first nine months of 2011 equal to 81.4% of the estimated total production of FFB us in 2011. Rubber production fell 27% YoY to 10.931 tonnes as the reduction of plasma and the purchase of a third party. We forecast total TBS LSIP 2011 at 1.7 million tons and 17.026 tons of rubber.
3Q2011 CPO sales volume up to 309.8 thousand tons, equivalent to 80% of the predicted total sales volume of CPO 2011 at 389.3 thousand tons.
LSIP will add two palm oil mills in Kalimantan and South Sumatra in 2012 with a capacity of 40 metric tons per hour and improving infrastructure in the region of South Sumatra, which is targeted for completion in 2013 to facilitate the distribution of palm oil.
We are confident LSIP able to record positive growth in financial performance in the future driven by: 1) increase in CPO sales volume 2011F-2015F average of 6%; 2) the average selling price of CPO-2015F 2011F our prediction to U.S. $ 1.065 / metric ton; 3) the average age of palm trees in the productive phase (mean 12 years).
We estimate sales LSIP 2011 amounting to Rp 5 trillion, grew 40% compared to 2010 and our projections for this year's net profit LSIP worth Rp 1.7 trillion, an increase of 69% over the previous year. Decrease in income tax rates imposed from 25% to 20% because of the free float of 40% net profit LSIP help appreciated.
We recommend a BUY for the stock LSIP. The target price of USD 3.050 per share using the 10-year DCF with WACC assumption of 13.3%. TP gives 36% increase in space. TP values reflect 2011F PE of 12.0x and 9.9x for 2012F and EV / ha 2011F and 2012F worth U.S. $ 15.330 and U.S. $ 14.254. Based on the closing stock price yesterday LSIP, LSIP shares trading at 7.3x 2012F PE and EV / Ha 2012F of U.S. $ 9.656.