Sampoerna Agro(SGRO IJ)

Transcription

1 Equity Research Company Update Tuesday,31 July 2018 HOLD Maintain Last price (IDR) 2,360 Target Price (IDR) 2,300 Upside/Downside -2.5% Previous Target Price (IDR) 2,700 Stock Statistics Sector Bloomberg Ticker Plantation SGRO IJ No of Shrs (mn) 1,819 Mkt. Cap (IDRbn/USDmn) 4,292/298 Avg. daily T/O (IDRbn/USDmn) 0.2/0.0 Major shareholders (%) Sampoerna Agri Resources 67.1 Public 33.0 Estimated free float 27.2 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (11.3) SGRO relative to JCI Index Sampoerna Agro(SGRO IJ) Volume to Catch-Up in 2H18 SGRO posted 2Q18 net profits of Rp73bn (+349% YoY, +377%QoQ), resulting in 1H18 net profits of Rp89bn (-49% YoY), or reaching 26% of our full year forecast and 27% of consensus estimates, mainly due to lower-than-expected sales volume. We maintain our FY18 FFB growth estimate of 15%, in-line with the company s guidance of 15-20%. Our assumption implies 6% sales volume growth in FY18. Maintain HOLD. Lower-than-expected 1H18 results. SGRO booked 1H18 net profits of Rp89bn (-49% YoY), or reaching 26% of our full year forecast and 27% of the consensus number. The sluggish net profits mainly owed to lower-than-expected sales volume. 1H18 revenues were reported at Rp1.3tn (-17.2% YoY), only reaching 37% of our full year forecast and 35% of the consensus. 1H18 sales volume reached 135k tons (-5.5% YoY), or 37% of our FY18 CPO sales forecast, while the 1H18 CPO ASP stood at Rp7,965/kg (-6.9% YoY). The 1H18 gross margin reached 24.0% (vs. 28.7% in 1H17). Better 2Q18 earnings. SGRO booked 2Q18 net profits of Rp73bn (+349% YoY, +377% QoQ) helped by higher CPO sales volume (+21% YoY, +4% QoQ), lower COGS/kg (-15% YoY, -8% QoQ) and other income amounting to Rp54bn. 2Q18 revenues reached Rp666bn (+14% YoY, +0% QoQ). 2Q18 CPO sales volume was 69k tons (+21% YoY, +4% QoQ) while the 2Q18 CPO ASP stood at Rp7,970/kg (- 2% YoY, +0% QoQ). COGS/kg was recorded at Rp5,785/kg (-15%YoY,-8% QoQ) in 2Q18 due to the inventory built up. The 2Q18 gross margin reached 24.7% (vs. 1Q18 s 23.4% and 2Q17 s 22.9%). Volume assumption still on-track; much higher volume in 2H18. Post the release of the 1H18 result, we maintain our FY18 FFB growth assumption at 15%, still on-track with company guidance of 15-20%. Our assumption implies FY18 sales volume of 362k tons (+6.4% YoY). The company hinted that output may be 30-40% higher in 2H18 compared to 1H18. In 1H18, FFB and CPO output was reported at 758k tons (+16.0% YoY) and 155k tons (+13.5% YoY), respectively. Source : Bloomberg Maintain HOLD. On the expectation of much better volumes and earnings in 2H18, we keep our current forecast and maintain our HOLD call on SGRO with an unchanged TP of Rp2,300. The counter is currently trading at 12.4x FY18 P/E. Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 2,915 3,616 3,633 3,916 4,050 EBITDA (IDRbn) ,002 1,138 1,199 EBITDA Growth (%) (17.9) Net profit (IDRbn) EPS (IDR) x Yudha Gautama EPS growth (%) 84.5 (34.8) (62-21) ext 3509 BVPS (IDR) 1, , , , ,649.1 DPS (IDR) yudha.gautama@danareksa.com PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) See important disclosure at the back of this report 1 Source : SGRO, Danareksa Estimates

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level See important disclosure at the back of this report 2

3 Exhibit 5. SGRO 1H18 Results Summary SGRO 2Q18 Results 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 YoY QoQ CPO Sales Volume (Tons) 85,740 56,988 94, ,564 66,116 68,806 21% 4% PK Sales Volume (Tons) 20,754 9,262 22,427 23,447 15,010 17,884 93% 19% % of ours % of consensus CPO Price (Rp/kg) 8,840 8,126 7,949 8,182 7,960 7,970-2% 0% PK Price (Rp/kg) 8,819 6,256 5,989 7,629 6,571 5,444-13% -17% COGS/kg (Rp/kg) (6,580) (6,787) (5,904) (6,416) (6,303) (5,785) -15% -8% Revenue (Rp Bn) 1, , % 0% 37% 35% Gross profit (Rp Bn) % 5% 32% 29% Operating Expense (Rp Bn) (91) (76) (69) (96) (91) (74) -2% -18% Operating profit (Rp Bn) % 37% 23% 21% Int Expense (Rp Bn) (53) (54) (62) (26) (47) (47) -12% -1% Forex Gain/(Loss) (Rp Bn) Others and int income (Rp Bn) (10) % 1742% Pretax profit (Rp Bn) % 360% 21% 24% Net profit (Rp Bn) % 377% 26% 27% Effective Tax Rate (%) 25% 18% 46% 52% 21% 23% Gross Margin 31.9% 22.9% 25.7% 24.3% 23.4% 24.7% Operating Margin 23.1% 10.0% 18.2% 15.4% 9.8% 13.5% Net Income Margin 15.4% 2.8% 5.2% 6.0% 2.3% 11.0% See important disclosure at the back of this report 3

4 Exhibit 6. Income Statement Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Revenue 2,915 3,616 3,633 3,916 4,050 COGS (2,275) (2,654) (2,625) (2,783) (2,867) Gross profit ,009 1,132 1,183 EBITDA ,002 1,138 1,199 Oper. profit Interest income Interest expense (227) (194) (162) (162) (188) Forex Gain/(Loss) Income From Assoc. Co s Other Income (Expenses) Pre-tax profit Income tax 193 (178) (197) (230) (235) Minority interest (17) (15) (19) (22) (22) Net profit Core Net Profit Exhibit 7. Balance Sheet Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Cash & cash equivalent Receivables Inventory Other Curr. Asset Fixed assets - Net 4,145 4,628 4,793 4,970 5,317 Other non-curr.asset 2,352 2,263 2,489 2,866 3,118 Total asset 8,328 8,285 8,676 9,104 9,949 ST Debt ,159 Payables Other Curr. Liabilities Long Term Debt 2,577 2,388 2,394 2,394 2,394 Other LT. Liabilities Total Liabilities 4,570 4,280 4,364 4,434 4,923 Shareholder'sFunds 3,612 3,860 4,149 4,485 4,818 Minority interests Total Equity & Liabilities 8,328 8,285 8,676 9,104 9,949 See important disclosure at the back of this report 4

5 Exhibit 8. Cash Flow Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Net income Depreciation and Amort Change in Working Capital (83) (13) 12 OtherOper. Cash Flow (124) Operating Cash Flow Capex (605) (866) (825) (723) (816) Others Inv. Cash Flow (87) 182 (59) (124) (85) Investing Cash Flow (692) (684) (883) (847) (902) Net change in debt 466 (195) New Capital (56) Dividend payment (45) (45) (58) (69) (81) Other Fin. Cash Flow (226) (190) (143) (140) (166) Financing Cash Flow 139 (430) (192) (209) 253 Net Change in Cash 137 (393) (86) (218) 246 Cash - begin of the year Cash - end of the year Exhibit 9. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales (2.8) EBITDA (17.9) Operating profit (40.1) Net profit 78.5 (34.9) Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) Interest Coverage (x) Source : SGRO, Danareksa Estimates See important disclosure at the back of this report 5

6 See important disclosure at the back of this report 6