Mandiri Sekuritas Astra Agro Lestari: 9M09 earnings in line with ours, but below market consensus (AALI, Rp21,600, Neutral, TP: Rp17,500)

􀂄 AALI booked 9M09 earnings of Rp1.2tn (-41.4% yoy), as average selling price for CPO in the 9M09 was 20.8% lower than in the same period a year ago (Rp6,336/kg in 9M09 vs Rp7,995/kg in 9M08). This result represents around 71% of ours and 66% of market consensus.

􀂄 However, on quarterly basis, the company booked substantial earnings growth (+26% qoq) but with lower margin (net margin of 20.9% in 3Q09 vs 25.9% in 2Q09). The company is aiming to boost its CPO production by building new processing mill with total capacity of 45tons FFB/hr in Jambi. As of current, AALI has 20 processing mill with total capacity of 940tons FFB/hr.

􀂄 Currently, AALI is trading at PER09F of 19.4x and PER10F of 15.1x.