AALI posted 1Q10 revenues of Rp1.63tn (16.0%yoy, -16.7%qoq). This translates to net income of Rp272bn (+24.9%yoy, -34.1%qoq)
Revenues decreased by 34.1%qoq due to a decrease in CPO sales volume by 22.5% qoq from 288,289 ton in 4Q09 to 223,308 ton in 1Q10 and a decrease in kernel sales volume by 32.7% qoq, which partially offset by increase in CPO sales price by 9.3% from Rp5,985/kg in 4Q09 to Rp6,544/kg in 1Q10.
1Q10 CPO sales volume of 223,308 ton represents 20.4% of our FY10E CPO sales volume. In the last 3 years, average 1Q sales volume represented 23.1% of full year sales volume.
Our concern is on cost pressure which caused profit margin squeeze from 4Q09 to 1Q10 when CPO sales price increased in the same period.
Currently the counter trades at PER10-11F of 14.7-13.2x. We are in process of reviewing our assumptions with possible downgrade.
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Kamis, 29 April 2010
Kamis, 01 April 2010
Mandiri Sekuritas Timah: FY09 net income is inline with our estimate, but 9% above consensus (TINS, Rp2,400/share, Buy, TP: Rp3,000/share)
Timah posted FY09 revenues of Rp7.7tn (-14.8%yoy, +9.0%qoq) and net income of Rp314bn (-76.6%yoy, +11.4%qoq), which is in line with our estimate, but 9% above consensus.
YoY worsening performance was mainly due to lower ASP by 26%, qoq better performance was also due to better ASP of 3%. The company has not given any operational details.
Company’s performance is highly depends on ASP and tin ore mix between offshore and onshore mining. We expect the company to be able to maintain equal mix between offshore and onshore mining. With 1Q10 tin price up by 11%qoq, we expect the company to continue its strong profitability growth.
We still maintain Buy recommendation for TINS which is currently trading at PER10-11F of 9.6x-6.2.
YoY worsening performance was mainly due to lower ASP by 26%, qoq better performance was also due to better ASP of 3%. The company has not given any operational details.
Company’s performance is highly depends on ASP and tin ore mix between offshore and onshore mining. We expect the company to be able to maintain equal mix between offshore and onshore mining. With 1Q10 tin price up by 11%qoq, we expect the company to continue its strong profitability growth.
We still maintain Buy recommendation for TINS which is currently trading at PER10-11F of 9.6x-6.2.
Selasa, 30 Maret 2010
Mandiri Sekuritas Gudang Garam: FY09F net income was in line with our estimate, but 13% above consensus (GGRM, Rp25,500, Buy, TP: Rp30,000/share)
Gudang Garam posted revenues of Rp33tn (+9.0%yoy, +11.5%qoq), this translates to net income of Rp3.5tn (+83.8%yoy, -5.9%qoq).
Despite of qoq growth in sales, 4Q09 gross profit was relatively flat while 4Q09 operating profit declined by 17.5%qoq. As the company increased 4Q09 selling expense by 148%qoq, we think the company was aggressively promoting their products through advertising and sales discounts. We will confirm it later after analyst meeting.
We still maintain Buy recommendation on GGRM which is trading at PER10-11F of 11.6-10.2x.
Despite of qoq growth in sales, 4Q09 gross profit was relatively flat while 4Q09 operating profit declined by 17.5%qoq. As the company increased 4Q09 selling expense by 148%qoq, we think the company was aggressively promoting their products through advertising and sales discounts. We will confirm it later after analyst meeting.
We still maintain Buy recommendation on GGRM which is trading at PER10-11F of 11.6-10.2x.
Selasa, 23 Maret 2010
Mandiri Sekuritas Timah: Key takeaways from site visit (TINS, Rp2,225/share, Buy, Rp3,000/share)
We visited Timah’s mining sites at Bangka last week. Some of the key takeaways are:
Go offshore, go deeper. The company is not planning to add more onshore mining sites this year, they are intensifying offshore mining. In offshore mining, they will replace old bucket line ships with newer cutter section ships. The new ships have advantages in terms of (1) 40% lower production cost, (2) deeper exploration, and (3) not surrounded by illegal miners’ ships.
So far, smooth transition from subcontracting to outsourcing. With the new regulation, Timah is not renewing expired subcontract, instead, they are going to outsource labor and equipment to the existing subcontractors. Therefore, tin ore cost will switch from variable cost to relatively fixed cost. Based on recent negotiation, it will take 3 years to fully convert subcontracting to outsourcing. If all goes well, it is estimated that this scheme will reduce offshore mining cost
by around 15%.
Illegal mining is getting more difficult. Based on our casual conversation with local people, they told us that illegal mining is getting more difficult. One of the reasons is Timah’s policy to shift to offshore mining. In offshore mining, the number of illegal miners also decreased from around 500 ships to around 300 ships, this is because Timah moved to deeper sea on which illegal miner do not have sufficient mining equipment. Note that either in offshore or onshore, illegal miners are used to mine close to Timah’s site as exploration cost to measure tin ore contents is very costly.
We still maintain our Buy recommendation on TINS which trading at PER10F-11F of 8.9x-5.7x, respectively.
Go offshore, go deeper. The company is not planning to add more onshore mining sites this year, they are intensifying offshore mining. In offshore mining, they will replace old bucket line ships with newer cutter section ships. The new ships have advantages in terms of (1) 40% lower production cost, (2) deeper exploration, and (3) not surrounded by illegal miners’ ships.
So far, smooth transition from subcontracting to outsourcing. With the new regulation, Timah is not renewing expired subcontract, instead, they are going to outsource labor and equipment to the existing subcontractors. Therefore, tin ore cost will switch from variable cost to relatively fixed cost. Based on recent negotiation, it will take 3 years to fully convert subcontracting to outsourcing. If all goes well, it is estimated that this scheme will reduce offshore mining cost
by around 15%.
Illegal mining is getting more difficult. Based on our casual conversation with local people, they told us that illegal mining is getting more difficult. One of the reasons is Timah’s policy to shift to offshore mining. In offshore mining, the number of illegal miners also decreased from around 500 ships to around 300 ships, this is because Timah moved to deeper sea on which illegal miner do not have sufficient mining equipment. Note that either in offshore or onshore, illegal miners are used to mine close to Timah’s site as exploration cost to measure tin ore contents is very costly.
We still maintain our Buy recommendation on TINS which trading at PER10F-11F of 8.9x-5.7x, respectively.
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