Mansek AALI:7M10 CPO production volume reach 53%of our FY10F assumption (AALI,BUY,Rp21,200,TP:Rp24,500)

AALI ’s 7M10 CPO production volume decreased by 6.5%yoy from 607,826 ton in 7M09 to 568,315 ton in 7M10.This 7M10 CPO production volume represents 53%of our FY10F.From 2003 to 2009,7M production represented between 52%up to 59%of FY CPO production.Currently,We maintain our CPO production assumption.

Currently,AALI trades at FY10F and FY11F PE of 15.3x and 13.1x, respectively.

Mansek Astra Agro Lestari:takeaway from a company visit (AALI,Rp21,250,BUY,TP:Rp24,500)

Although its 1H10 CPO production decreased by 5.7%yoy,AALI still maintains its FY10F CPO production similar to that recorded in FY09.

AALI indicated that its COGS in 1H10 increased by 6%yoy,which we believe was due to newly matured plantation (please note that newly matured plantation was recorded at 12,882 ha in 1Q10 (an increase of 9.2%from FY09).

The cost (fertilizer,maintenance,etc)of newly matured plantation is charged to income statement (while for immature plantation it is capitalized).Meanwhile,the productivity of newly mature plantation is still low around 10 ton FFB/ha compared to its average productivity of 22 ton FFB/ha.

We estimate AALI ’s 1H10 net income will decrease by around 6%-10%yoy.
Currently,AALI trades at PE FY10F and FY11F of 15.3x and 13.1x.

Mansek AALI:6M10 CPO sales volume reach 45%of our FY10F assumption (AALI, Rp20,250,BUY,TP:Rp24,500)

AALI ’s 6M10 CPO sales volume decreased by 3.3%yoy from 494,018 ton in 6M09 to 477,639 ton in 6M10.This 6M10 CPO sales volume represents 45.0%of our FY10F assumption.We will maintain our CPO sales volume assumption.

AALI ’s 6M10 CPO sales price increased by 3.2%yoy from Rp6,386/kg in 6M09 to Rp6,590/kg in 6M10.

Currently,AALI trades at FY10F and FY11F PE of 14.6x and 12.5x, respectively.