Mansek BW Plantations:takeaway from a company visit (BWPT,Rp730,Not rated)

BWPT is an oil palm plantation company with focus on upstream business.As of 30 June 2010,BWPT managed 46,048 ha oil palm plantation.Its nucleus area of 42,632 ha represents 92.6%of total area.Meanwhile,its mature area of 15,270ha represents 33.2%of total area.Average age of plantation is 9.8 years old.

Although BWPT ’s 1H10 CPO production decreased by 16.6%yoy to 38,663 ton,BWPT still positive to achieve FY10F CPO production growth of 10%yoy.

BWPT targets to achieve CPO production growth of 12%in 2011,25%in 2012 and 30%in 2013.The main driver of this growth is higher FFB yield due to more plantation area that enter into peak production phase.

BWPT ’s CPO ASP increased from Rp6,211/kg in 1H09 to Rp6,502/kg in 1H10.The Average Sales Price gap between BWPT and AALI narrowed due to BWPT ’s jetty has been completed.In 1H09,AALI ‘s ASP was Rp 6,386/kg vs BWPT ’s ASP of Rp6,211/kg.In 1H10,AALI ’s ASP was Rp 6,590/kg vs BWPT ’s ASP of Rp6,502/kg.

We have yet covered BWPT.Currently,BWPT trades at FY10F PER of 11.3x and FY11F of .8x based on consensus estimates. Plantation Industry in Indonesia trades at FY10F PER of 12.9x and FY11F PER of 11.2x.