3rd interim DPS of 1.75sen to sustain interest
Benefited from strong CPO price upswing in 3Q21
3Q21 results beat our expectations due to high CPO ASP achieved and lower-than-expected cost. BPLANT proceeded to reward shareholders with a 3rd interim DPS of 1.75sen (ex-date: 8 Dec), bringing 9M DPS to
4.35sen. We raise FY21E DPS to 6sen (from 3.6sen). Trading at just 0.6x PBV and EV/planted ha of ~MYR33,000, BPLANT remains a BUY and is a prime privatisation target. Following our PATMI upgrade, we raise our RNAV-TP to MYR0.93 (from MYR0.90). Our FY22E EPS has yet to incorporate a proposed land disposal gain of MYR323m (14.4sen/sh).
3Q21 results exceeded our expectations
3Q21 PATMI of MYR96m (+432% YoY, +98% QoQ) brings 9M21 PATMI to MYR156m (10x YoY), at 154% of our FY21E. YoY, 3Q PATMI was boosted by (i) higher CPO ASP achieved at MYR4,331/t (+56% YoY, +8% QoQ) which offset lower FFB output (-4% YoY, +14% QoQ), and (ii) lower-than expected production cost.
Higher YoY unit cost on lower yield
We estimate BPLANT’s 9M21 all-in operating cost to customer at a higher MYR2,373/t (+10% YoY), in part due the low FFB yields at 9.7t/ha (-14% YoY) and in part due to the higher state taxes and windfall profit levies. On production, 9M21 FFB output of 0.675mt (-10% YoY) met 76% of our full-year forecast. We maintain our -11% YoY FFB growth for FY21E.
Raising our CPO ASP and PATMI forecasts
Following our industry-wide CPO ASP revisions to MYR4,300/t (from MYR3,500/t) for 2021, MYR3,200/t (from MYR2,800/t) for 2022, and MYR3,000/t (from MYR2,800/t) for 2023, our FY21E/22E/23E core EPS
forecasts for BPLANT are raised by 105%/74%/30% respectively. Our new EPS also factored in revisions to windfall profit levies from 1 Jan 2022, and rising cost pressures (especially fertiliser). We do not expect BPLANT to be affected by Cukai Makmur in FY22E.