- BUY Entry – 0.725 Target – 0.810 Stop Loss – 0.680
- Bumitama Agri Ltd is an Indonesia-based producer of crude palm oil and palm kernel with oil palm plantations and mills located in three provinces of Indonesia, namely Central Kalimantan, West Kalimantan and Riau. Its primary business activities are cultivating and harvesting oil palm trees, processing fresh palm fruit bunches from its oil palm plantations, plasma plantations and third parties into crude palm oil and palm kernel, and selling crude palm oil and palm kernel.
- Stellar 1Q22 financials. Revenue rose 69% YoY to IDR 3,899,550 mn in 1Q22 while gross profit rose 195.9% to IDR 1,500,622mn. Gross profit margin improved significantly to 38.5% in 1Q22, compared to 22.0% in 1Q21. Overall net profit grew 423.6% to IDR 873,023mn in 1Q22, while net margins stood at 22.4%, compared to 7.2% in the previous period.
- Cloudy production outlook in Malaysia. State agency Malaysian Palm Oil Council (MPOC) on Wednesday lowered its production outlook for the world’s second largest producer and pegged prices to remain above 6,000 ringgit ($1,367.37) a tonne this year. The Malaysian Palm Oil Council forecast Malaysia’s 2022 production at 18.6 million tonnes, below previous expectations and after Indonesia has cancelled a long-awaited plan to send a batch of workers to operate in labour-starved Malaysia’s palm oil plantations. MPOC pegged Malaysia’s benchmark palm oil prices to remain between 6,500-6,800 ringgit until the end of July, and ease to 6,300-6,500 ringgit until September due to the resumption of Indonesian exports, Mohd Izham said.
- Indonesia’s export ban. Despite efforts made by Indonesia to cool palm oil prices, Indonesia has so far re-entered the export market only slowly with export volumes allowed significantly low. The government expected to allocate 1 million tonnes of palm oil exports based on domestic sales made during the export stoppage. So far, permits have been issued for 87,109 tonnes of refined, bleached and deodorised (RBD) palm oil and 90,255 tonnes of RBD olein, while the rest were issued for cooking oil, according to trade ministry data provided by Oke.
- Positive consensus estimates. Bumitama Agri currently has a positive consensus estimate of 4 BUYS, 0 HOLD and 0 SELL, with a 12M TP of S$0.97.
Generic 1st Crude Palm Oil (K01 Comdty)
(Source: Bloomberg)
