Bumitama Agri’s stellar results for 1H20 ended June 30 have led analysts to remain bullish on the oil palm player.
RHB Securities, Maybank Kim Eng and DBS Group Research have maintained their “buy” recommendations on the stock.
On August 14, Bumitama reported earnings soared 87.6% y-o-y to IDR441.25 billion ($40.56 billion) from IDR235.25 billion.
Revenue jumped 15.8% y-o-y to IDR4 trillion from IDR3.46 trillion.
RHB says Bumitama’s 1H20 core earnings were above expectations, coming in at 65%-77% of its and consensus’ forecasts.
The company’s outperformance was driven by higher crude palm oil (CPO) and palm kernel (PK) prices, which pulled earnings up almost threefold in 1H20.
DBS says Bumitama is one of its top picks given the company’s earnings momentum that is stronger than peers.
This is despite the company’s reliance over external fruit purchases to maximise its mill utilisation rate, it adds.
Maybank KE says it expects Bumitama's 2H20 core profit after tax and minority interest to be broadly similar to 1H20.
This should come as seasonally higher output is expected to be accompanied by higher cost and a normalisation of effective tax rate, it explains.
RHB Securities has raised its target price to 65 cents from 50 cents previously.
The brokerage has also increased its FY20 earnings forecast by 51% and FY21-22 earnings forecasts by 33%-38%.
However, Maybank KE has reduced its target price to 74 cents from 78 cents previously.
The brokerage has increased its FY20 earnings per share (EPS) forecast by 4% and lowered its FY21-22 EPS forecasts by 7% and 2%, respectively.
Meanwhile, DBS has kept its target price unchanged at 66 cents.
It has also maintained its FY20 earnings forecast of IDR730 billion, up 6.4% y-o-y.
As at 2.58 pm, Bumitama was up 0.5 cent or 1% at 52 cents with 183,700 shares changed hands.
