Bumitama Agri

Bumitama Agri: DBSV initiates at Buy with TP $1.35, based on DCF valuation. This implies 15.7x FY12e P/E on 0.54x PEG. Says the Indonesian oil palm planter has been aggressively planting/ acquiring estates since 2004 – it is now the 4th largest Indonesian planter under DBSV’s coverage, with planted area of 98.6k ha, of which 48% is immature. DBSV believes Bumi to be in a strong growth phase, offering FY11-14e earnings CAGR of 29%, with plantable reserves of 63k ha to support expansion to FY15e. Tips the company as best in class, and an attractive stock to own, because i) the refining build up in Indonesia will lead to overcapacity in two yrs time, and ii) its strong volume growth over the next 3 yrs should be able to offset any CPO price weakness better than peers.