Indofood Agri: JP Morgan maintains O/w. Note that 2Q11 results in line.
For 1H11, CPO production vol +18% while sales of edible oils & fats +20%. Mgt raised its full-year CPO production vol guidance and edible oils & fats vol growth to 15% as a result. For 1H11, Co. added only 135ha of oil palms as 2,941ha of new plantings were offset by replanting. Co. has a new planting target of 15,000ha for FY11E.
Sugar update: A sugar refinery is in the final stage of commissioning. Mgt expects earnings contribution from the sugar business to ramp up in 2H11. The floor price of sugar in Indonesia was increased in May by 12% from Rp6,250/kg to Rp7,000/kg, although sugar is already trading higher at Rp8,000-9,000/kg currently.
Assets acquisition post IPO does not sound imminent: From the earnings conference call, mgt reiterated its focus to look for acquisition targets along the equatorial belt. However, it did not appear that it is in final stages of concluding a deal.
The current SIMP share price of Rp1,300 is implying $1.62 for the IndoAgri share price, based purely on IndoAgri’s 72% stake in SIMP and the Co. level cash holding.
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