EQUITY RESEARCH

AALI - Results Update - 28 October 2021

CIPTADANA SEKURITAS ASIA

BUY Astra Agro Lestari

CPO price rally boosts earnings
TP: Rp18,300 (+81.2%)
9M21 net profit exceeds expectation due to stronger CPO price
Astra Agro Lestari (AALI) booked an excellent 9M21 net profit of Rp1.47 tn (+152.5% YoY)
Sector Plantation
driven by stronger CPO price. The 3Q21 revenues rose 23.9% QoQ to Rp7.18 tn supported
Bloomberg Ticker AALI IJ by higher revenues from CPO and PK segments as CPO sales volume climbed 27.1% QoQ
and 5.6% QoQ higher global CPO price. The 3Q21 net profit jumped 68.4% QoQ to Rp820 bn
Share Price Performance following addition of Rp92 bn non-operating income. The solid 3Q21 performance brought
Last price (Rp) 10,100 9M21 revenues to Rp18.0 tn (+35.2% YoY) with CPO/PK segments rose 32.5%/79.5% YoY
Avg. daily T/O (Rpbn/USDmn) 22.2/1.6 respectively. In 9M21, CPO sales volume declined -6.2% YoY as more production is used
for derivative products. As global CPO price soared 61.8% YoY, AALI’s margins improved
3m 6m 12m across the board with GPM expanded to 20.0% (vs. 14.4% in 9M20) while OPM improved to
Absolute (%) 27.0 8.3 -6.0 14.8% (vs. 8.2% in 9M20). Lower tax ratio also further increased the bottom line to a solid
Relative to JCI (%) 18.3 -1.8 -34.0
Rp1.47 tn (+152.5% YoY) in 9M21.

52w High/Low price (Rp) 13,350/7,275 rd

Higher 3 party FFB to offset decline in internal FFB
rd
The solid revenues are primarily due to higher CPO price and increasing 3 party FFB as
internal output remained flattish. In 3Q21, FFB production declined -1.9% QoQ to 1.13 mn
14,000 10% tons while CPO output contracted -6.0% QoQ to 382k tons. As of September 2021, AALI
12,000 0% total FFB production (including plasma) reached 3.36 mn tons (-1.1% YoY), still within
10,000
-10% expectation, accounting for 74% of our FY21 target. To compensate the decline in internal
8,000 rd
-20% FFB production, AALI increased its 3 party FFB by 38.2% YoY to 2.52 mn tons. As such,
6,000
-30% CPO production managed to rise 10.2% YoY to 1.14 mn tons which is 7% ahead of our
4,000
2,000 -40% forecast. We expect global CPO price will remain firm in 4Q21 and the Company will
- -50% rd
continue to purchase more 3 party FFB in order to maintain sales volume. In 9M21, AALI
Oct-20

Apr-21
Nov-20
Dec-20
Jan-21

Jun-21

Aug-21
Sep-21
Jul-21
May-21
Feb-21
Mar-21

sold 1.50 mn tons of CPO and palm oil derivatives products, a 0.3% YoY increase.
AALI 1yr Rel. to JCI (RHS)
After two years rally, price should stabilize at RM4,000/ton in 2022
Global CPO price averaged at RM4,176/ton in 9M21, soared 61.8% YoY, on the back of
limited supply as a result of dry 2019 weather which lasted until early 2020. Amidst the
pandemic, palm oil demand has shown stable growth with Indonesian January – August
Outstanding shrs (mn) 1,925
2021 palm oil exports grew 6.6% YoY while domestic consumption rose 9.6% YoY. The
Mkt. Cap (Rpbn/USDmn) 19,439/1,372 government continues to roll out mandatory B30 program in 2021 with target of B40 in
Estimated free float (%) 20.3 2022. However, following the successive rally in the last two years, we believe CPO price
will stabilize to average RM4,000/ton in 2022. Expectation of supply recovery could
Major shareholders
suppress another price hike while a narrow price discount to its closest substitute,
PT Astra International Tbk 79.7% soybean oil, would dampen palm oil competitive advantage which subsequently hampers
Public 20.3% demand.

Reiterate BUY with higher TP Rp18,300/sh

rd
We take into account higher 3 party FFB purchase and CPO production in 2021F/2022F
EPS Consensus
CPO production. As such, our net profits increased by 50.4%/33.3% respectively. We apply
Ciptadana Cons. % Diff -0.5 SD of 5-yr mean PE as multiple and arrive at higher 2022F TP of Rp18,300/sh
2021F 1,017.1 783.6 29.8 (previously Rp14,500/sh). Our TP offers more than 80% upside hence we maintain BUY.
2022F 1,201.5 747.8 60.7
2023F 1,429.4 810.2 76.4 Exhibit 1 : Financial Highlights
Year to 31 Dec 2019A 2020A 2021F 2022F 2023F
Revenue (Rpbn) 17,453 18,807 25,238 26,673 26,835
Operating profit (Rpbn) 960 1,842 3,382 4,341 5,186
Net profit (Rpbn) 211 833 1,958 2,313 2,751
EPS (Rp) 109.7 432.8 1,017.1 1,201.5 1,429.4
EPS growth (%) -85.3 294.6 135.0 18.1 19.0
Yasmin Soulisa EV/EBITDA (x) 22.8 10.8 5.6 4.6 3.8
+62 21 2557 4800 ext. 799 PER (x) 92.1 23.3 9.9 8.4 7.1
soulisayasmin@ciptadana.com PBV (x) 1.0 1.0 0.9 0.9 0.8
Dividend yield (%) 1.2 0.5 1.1 2.6 3.1
http://www.ciptadana.com ROE (%) 1.1 4.4 9.4 10.4 11.6
Source : AALI, Ciptadana Estimates

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 EQUITY RESEARCH
AALI - Results Update - 28 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 2 : AALI 9M21 Result

Rp bn 9M21 9M21 YoY 3Q21 2Q21 QoQ FY21F 9M/21F
Revenues 18,014 13,324 35.2% 7,182 5,797 23.9% 20,519 88%
Cost of revenue -14,403 -11,407 26.3% -5,785 -4,515 28.1%
Gross profit 3,611 1,917 88.4% 1,397 1,282 9.0% 4,789 75%
Gross margin (%) 20.0 14.4 5.7 19.5 22.1 (2.7)

G&A expenses -622 -512 21.6% -255 -187 36.0%

Marketing expenses -320 -308 4.1% -121 -104 15.9%
Operating expenses -942 -819 15.0% -376 -292 28.8%
Operating profit 2,669 1,098 143.2% 1,021 990 3.2% 3,450 77%
Operating margin (%) 14.8 8.2 6.6 14.2 17.1 (2.9)

Forex gain (loss) 48 16 209.6% 21 15 46.4%

Interest income 43 39 10.3% 19 12 64.6%
Interest expense -297 -318 -6.6% -99 -98 0.2%
Other income (exp) -239 131 n/m 150 -162 n/m
Total other inc (exp) -445 -132 237.0% 92 -234 n/m

Pre-tax profit 2,224 966 130.3% 1,113 756 47.2%

Tax -680 -347 96.0% -264 -243 8.7%

PBMI 1,544 619 149.6% 849 513 65.5%

MI -75 -36 107.9% -29 -26 11.7%
Net profit 1,469 583 152.2% 820 487 68.4% 1,302 113%
Net margin (%) 8.2 4.4 3.8 11.4 8.4 3.0

Revenue breakdown
CPO 16,353 12,346 32.5% 6,606 5,243 26.0%
PK 1,578 879 79.5% 565 518 8.9%
Others 83 99 -15.6% 12 35 -67.5%

Source : AALI, Ciptadana Estimates

Exhibit 3 : Forecast Changes

New Original Diff (%)
2021F 2022F 2021F 2022F 2021F 2022F
Financials (Rp bn)
Revenue 25,238 26,673 20,519 21,610 23.0 23.4
Gross profit 4,644 5,965 4,789 5,193 -3.0 14.8
Operating profit 3,382 4,341 3,450 3,812 -2.0 13.9
Net profit 1,958 2,313 1,302 1,735 50.4 33.3

Margins (%)
Gross profit 18.4 22.4 23.3 24.0 -4.9 -1.7
Operating profit 13.4 16.3 16.8 17.6 -3.4 -1.4
Net profit 7.8 8.7 6.3 8.0 1.4 0.6

Source : AALI, Ciptadana Estimates

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 EQUITY RESEARCH
AALI - Results Update - 28 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 4 : ESG Assessment

Company description Palm oil producer

Environmental
1. Astra Agro is guided by the principles of environmental
conservation which includes the protection of life support
systems, preservation of nature core and sustainable usage.
2. The company is engaged in rehabilitation and conservation
research that have been consistently implemented and have
provided good results.
3. Comply to the practice of sustainable palm oil industry adds
great value for the company.

Social
1. The Company absorbs large number of labors to maintain and
harvest palm oil hence provides large employment opportunities.
ESG-related
opportunity or risk 2. Plasma plantation program offers new opportunity for
assessment smallholder plantation owners.
3. Astra Agro collaborates with locals through several activities
aimed at improving the livelihood of surrounding communities.

Governance
1. The company has more than 30 years’ experience in plantation
industry.
2. Astra Agro develops 7 values of corporate culture which include
basic value and principles, business and work ethics and also,
roles of stakeholders.
3. Through internal audit the company provides independent
assurance that risk management, governance and internal
control processes are operating effectively.

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 EQUITY RESEARCH
AALI - Results Update - 28 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 5 : Income Statement

Year to 31 Dec (Rpbn) 2019A 2020A 2021F 2022F 2023F
Revenue 17,453 18,807 25,238 26,673 26,835
COGS -15,308 -15,844 -20,594 -20,708 -20,029
Gross profit 2,145 2,963 4,644 5,965 6,806
Oper. expenses -1,184 -1,121 -1,262 -1,623 -1,620
Oper. profit 960 1,842 3,382 4,341 5,186
EBITDA 1,084 2,235 4,367 5,019 5,842
Interest income 30 51 192 125 230
Interest expense -350 -418 -314 -349 -308
Other income (exp.) 55 -45 -109 -27 -36
Pre-tax profit 661 1,463 3,150 4,090 5,072
Income tax -417 -569 -1,043 -1,590 -2,081
Minority interest -33 -61 -150 -188 -240
Net profit 211 833 1,958 2,313 2,751

Exhibit 6 : Balance Sheet

Year to 31 Dec (Rpbn) 2019A 2020A 2021F 2022F 2023F
Cash & cash equivalent 383 979 574 914 1,228
Acct, receivables 369 766 761 805 809
Inventory 1,974 2,166 3,411 3,285 3,206
Other curr, asset 1,746 2,028 2,713 3,738 4,619
Total current asset 4,472 5,938 7,460 8,741 9,862
Fixed assets - net 16,832 16,248 16,534 16,164 15,881
Other non-curr.asset 5,503 5,340 5,473 5,401 5,519
Total asset 26,974 27,781 29,722 30,562 31,517

ST debt + curr. maturity 150 0 0 0 0

Acct, payable 827 770 1,038 1,044 1,009
Advances received 89 81 109 115 116
Other curr. liab 501 941 1,057 1,324 1,516
Long term debt 5,535 5,624 5,574 4,774 3,974
Other non-curr, liab, 893 1,117 526 526 526
Total liabilities 7,996 8,533 8,304 7,783 7,141
Shareholder equity 18,521 18,752 20,908 22,233 23,814
Minority interest 457 495 510 546 561
Total liab + SHE 26,974 27,781 29,722 30,562 31,517

Exhibit 7 : Per Share Data

Year to 31 Dec(Rp) 2019A 2020A 2021F 2022F 2023F
EPS 109.7 432.8 1,017.1 1,201.5 1,429.4
BVPS 9,622.9 9,743.1 10,862.9 11,551.4 12,372.9
DPS 116.4 47.3 106.1 266.6 315.9
FCF per share -7.8 687.4 19.9 1,105.1 1,186.8

Source : AALI, Ciptadana Estimates

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 EQUITY RESEARCH
AALI - Results Update - 28 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 8 : Cash Flow

Year to 31 Dec (Rpbn) 2019A 2020A 2021F 2022F 2023F
Net income 211 833 1,958 2,313 2,751
Depreciation 124 393 985 678 656
Chg in working cap. 958 1,096 -1,634 -555 -751
Other 0 0 0 0 0
CF-Oper activities 1,292 2,322 1,309 2,436 2,657

Capital expenditure -19 -103 -1,271 -309 -372

Others -1,289 -896 0 0 0
CF-Investing activities -1,307 -999 -1,271 -309 -372

Net change in debt 954 -62 -50 -800 -800

Net change in equity 0 0 0 0 0
Dividend payment -431 -175 -393 -987 -1,170
Other financing -189 -531 0 0 0
CF-Financing activities 349 -727 -443 -1,787 -1,970

Net cash flow 334 596 -405 340 314

Cash - begin of the year 49 383 979 574 914
Cash - end of the year 383 979 574 914 1,228

Exhibit 9 : Key Ratios

Year to 31 Dec 2019A 2020A 2021F 2022F 2023F
Growth
Revenue (%) -8.5 7.8 34.2 5.7 0.6
Operating profit (%) -58.7 91.8 83.6 28.4 19.4
Net profit (%) -85.3 294.6 135.0 18.1 19.0
Profitability Ratios
Gross margin (%) 12.3 15.8 18.4 22.4 25.4
Operating margin (%) 5.5 9.8 13.4 16.3 19.3
EBITDA margin (%) 6.2 11.9 17.3 18.8 21.8
Net margin (%) 1.2 4.4 7.8 8.7 10.3
ROA (%) 0.8 3.0 6.6 7.6 8.7
ROE (%) 1.1 4.4 9.4 10.4 11.6
Liquidity Ratios
Current ratio (x) 2.9 3.3 3.4 3.5 3.7
Quick ratio (x) 1.6 2.1 1.8 2.2 2.5
Cash conversion cycle (days) 37.3 45.4 58.4 54.4 55.4
Activity Ratio
Inventory turnover (days) 47.1 49.9 60.5 57.9 58.4
Receivable turnover (days) 10.3 11.0 11.0 10.7 11.0
Payable turnover (days) 20.0 15.5 13.1 14.2 14.0
Solvency Ratio
Interest cover (x) 3.1 5.3 13.9 14.4 19.0
Debt to equity ratio (x) 0.3 0.3 0.3 0.2 0.2
Net debt to equity (x) 0.3 0.2 0.2 0.2 0.1

Source : AALI, Ciptadana Estimates

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 EQUITY RESEARCH
AALI - Results Update - 28 October 2021
CIPTADANA SEKURITAS ASIA

EQUITY RESEARCH

HEAD OF RESEARCH ANALYST ANALYST

Arief Budiman Erni Marsella Siahaan, CFA Yasmin Soulisa
Strategy, Automotive, Heavy Equipment, Banking Property, Plantations
Construction, Oil & Gas and Shipping T +62 21 2557 4800 ext 919 T +62 21 2557 4800 ext 799
T +62 21 2557 4800 ext 819 E siahaanerni@ciptadana.com E soulisayasmin@ciptadana.com
E budimanarief@ciptadana.com

ECONOMIST ANALYST ANALYST

Nicko Yosafat Fahressi Fahalmesta Robert Sebastian
T +62 21 2557 4800 ext 820 Cement, Toll Road, Poultry Retail, Healthcare
E yosafatnicko@ciptadana.com T +62 21 2557 4800 ext 735 T +62 21 2557 4800 ext 760
E fahalmestafahressi@ciptadana.com E sebastianrobert@ciptadana.com

ANALYST ANALYST ANALYST

Gani Thomas Radityo Muhammad Fariz
Telco, Tower, Media Coal, Metal Mining Consumer, Cigarette
T +62 21 2557 4800 ext 734 T +62 21 2557 4800 ext 795 T +62 21 2557 4800 ext 740
E gani@ciptadana.com E radityothomas@ciptadana.com E farizmuhammad@ciptadana.com

TECHNICAL ANALYST RESEARCH ASSISTANT

Asrul Husni Sumarni
T +62 21 2557 4800 ext 780 T +62 21 2557 4800 ext 920
E husniasrul@ciptadana.com E sumarni@ciptadana.com

EQUITY SALES

DIRECTOR OF INSTITUTIONAL EQUITY SALES

Dadang Mulyana
Plaza ASIA Office Park unit 2
Jl. Jend. Sudirman Kav. 59
Jakarta - 12190
T +62 21 2557 4800 ext 838
F +62 21 2557 4900
E mulyanadadang@ciptadana.com

BRANCH OFFICES

JAKARTA - MANGGA DUA SURABAYA SURABAYA

Komplek Harco Mangga Dua Intiland Tower Surabaya
Rukan Blok C No.10 Ground Floor Suite 5 & 6
Jl. Mangga Dua Raya Jl. Panglima Sudirman 101-103
Jakarta - 10730 Surabaya - 60271
T +62 21 600 2850 T +62 31 534 3938
F +62 21 612 1049 F +62 31 534 3886

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 EQUITY RESEARCH
AALI - Results Update - 28 October 2021
CIPTADANA SEKURITAS ASIA

Analyst Certification

Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her personal views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not
and will not be influenced by any part or all of his or her compensation.

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This report does not constitute an offer to buy or sell any security/instrument, invitation to offer or recommendation to enter into any
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without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these
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The information contained in this report is based on material we believe to be reliable; however, we do not represent that it is accurate,
current, complete, or error free. Assumptions, estimates and opinions contained in this report constitute our judgment as of the date of the
document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and
there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results. PT
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Disclaimer: This document is not intended to be an offer, or a solicitation of an offer, to buy or sell relevant securities (i.e. securities
mentioned herein or of the same issuer and options, warrants or rights to or interest in any such securities). The information and opinions
contained in this document have been compiled from or arrived at in good faith from sources believed to be reliable. No representation or
warranty, expressed or implied, is made by PT CIPTADANA SEKURITAS ASIA or any other member of the Ciptadana Capital, including any
other member of the Ciptadana Group of Companies from whom this document may be received, as to the accuracy or completeness of the
information contained herein. All opinions and estimates in this report constitute our judgment as of this date and there can be no
assurance that future results or events will be consistent with any such opinions, forecasts or estimates. The information in this document
is subject to change without notice; its accuracy is not guaranteed; and it may be incomplete or condensed.

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