BWPT - Yields meaningful progress

KBVS Update
Wednesday, 6 December 2023

BWPT: Yields meaningful progress 
(Non-Rated)

BWPT's 9M23 performance has shown improvement yoy as it booked a net profit of IDR104.3 bn, despite lower net revenue of by 6.4% yoy in 9M23 as ASP decline, yet sales volume rose.

The company demonstrated meaningful efforts for deleverage, reflected by lower net gearing at 2.5x in 9M23 compared to 3.4x in 2022.

Management expects that CPO market to remain stable through 2024, mostly supported by domestic side thanks to government's intensification of B35. Yet, expected El-Nino could mean potential upside for CPO price.

In 2024, BWPT is targeting to achieve a 10% production growth, while putting its expansion focus on its kernel crushing plant that is expected to start construction next year and biogas located in Central Kalimantan.

BWPT's stock is currently trading at 16.4x P/E '23; or at 10.5x ’23 EV/EBITDA. Note that at that current price, it is slightly lower than peers at 10.9x '23 EV/EBITDA and 23.1x 'P/E '23 or rather undemanding.

Regards,
Devi Harjoto & Khairunnisa Nadhifah – KBVS Research Team