Bumitama

Bumitama: Results generally in-line. 2QRev at RP829.0b +19.3% yoy, net profit $191.5m +8.3% yoy. For 1H2012, the increase in rev was attributed to an increase in sales volume despite falling ASPs of CPO and Palm Kernels. Co also recorded a net forex loss of RP22b in 1H2012 due to translation losses on US$ denominated bank loans. Co expects demand from emerging economies (China, India and Indonesia) to grow yoy due to population growth and higher consumption per capita. CPO prices are expected to remain resilient for the rest of the yr and co is confident of achieving satisfactory results. HSBC downgrades from Overweight to Neutral with TP$1.14 unchanged on valuations. Results are in-line, but increase in share price currently places valuations at 16x FY12e P/E, a premium compared to other Indonesian plantations avg 10x FY12 P/E.