Mandiri Sekuritas Sampoerna Agro: FY09 earnings of Rp282bn, in line with our estimates (SGRO, Rp2,650, Buy, TP: Rp3,200)

􀂄 Sampoerna Agro (SGRO) delivered FY09 revenue and earnings of Rp1.8tn and Rp282bn, down by 20.7% and 35.9% respectively. Bottom figure is in line with our and consensus expectations. Production number has yet to be disclosed, but we estimate CPO production in 4Q09 was around 90-95k tons which bring total cumulative production of 270-275k tons, slightly above our estimates.

􀂄 However, we highlighted that company manage to book lower-than-expected cost and therefore the operating margin decline is relatively small on yearly basis (-5.2% yoy). Noted that lower net margin (15.5% in FY09 vs 19.2% in FY08) was largely due to Rp20bn forex loss.

􀂄 We maintain our Buy recommendation on the counter with TP of Rp3,200/share.Currently, the stock is trading at PER10F of 11.3x.