Mandiri Sekuritas BW Plantation: 2M10 CPO productions fell by 20.3% yoy (BWPT, Rp750, Not rated)

􀂄 In the first two months 2010, PT BW Plantation (BWPT) delivered CPO production of 10.4k tons, down by 20.3% yoy and 2.3% mom (noted that AALI’s CPO production fell by 4.7% yoy during the same period). Theoretically, they expect FFB yield to sustain around 27-28tons/ha this year, before tapering off in 2011, as new areas mature. But, looking at their current 2 months production, we think the yield could be lower than last year’s achievement of 27tons/ha. Currently, BWPT has around 41k ha planted area as of FY09 with some 5% plasma areas.They aim to add another 22,600ha planted over the next 2 years to help sustaining their yield.

􀂄 As of current, BWPT is trading at PER10F of 12.1x according to consensus estimates, which is relatively expensive in our
view.