This is due to Covid-19 prevention measures implemented since early March, local sales, manageable storage supply, and a lack of logistical issues despite the partial lockdown in Indonesia so far.
Bumitama’s management’s guidance of a 10% growth y-o-y in fresh fruit bunch (FFB) remains unchanged. It also plans to plant up to 1,000 hectares of new plants in 2020.
The way Maybank Kim Eng analyst Ong Chee Ting sees it, BAL remains a “buy” with an unchanged target price of 78 cents for its “medium-term prospect with its relatively younger trees of an average age of 10.6 years old”.
“It is also one of the lowest cost producers in the region. Trading at 8x price-to-earnings ratio (P/E), this is at -2 standard deviation (SD) of mean,” he says.
As at 3.52pm, Bumitama shares were trading flat at 41.5 cents.
See also: Analysts see better year ahead as Bumitama Agri misses FY19 estimates
