Bumitama

Bumitama: Grp has acquired an 80% stake in PT. Nabatindo Karya Utama (NKU) for Rp175.7t ($22.4m or US$18.3m). Grp’s landbank to cross the 200,000ha mark. The purchase price of US$18.3m worked out to be about US$2,082/ha, a high pricing, as the acquired land comes with 30% planted areas. The valuation paid was close to a recent deal by Genting Plantations in Central Kalimantan, at about US$2,599/ha on a blended basis (planted and unplanted areas). This acquisition is expected to be funded internally. Newly-acquired land is located near to its existing estate, which has about 38,000ha planted with an average age of 4-5 years. With the purchase, this region will have approximately 50,000ha, which is the size that management targets for each region. The close proximity would allow the sharing of resources, enhancing operational efficiency and cost savings. Management is hosting a conference call on this acquisition. More details after the conference call. UOBKH maintain BUY and target price of $1.28, based on 14x 2013F PE. Like grp for its young age profile and best OER to support its 5-year net profit CAGR of 36%.