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MARKET MAKER : IHSG - 27 Juli 2017
July 27, 2017 08:18 WIB

Kinerja harian IHSG cenderung menguat terbatas untuk menguji level 5.820. Potensi tersebut disertai dengan kinerja IHSG yang berada trend reversal / perbalikan arah momentum positive. Download artikel selengkapnya(497.39 Kb)

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Danareksa Equity Snapshot - HOKI 26 Juli 2017
July 26, 2017 11:45 WIB

Buyung Poetera Sembada

 

Better margins in store

Buyung Poetra Sembada (BPS) is upbeat on its growth prospect, on the back of greater distribution network to general trades as well as the expectation to see the full-year impact of its wet paddy processing, which should translate to improve gross margin this year. At current price, the stock is trading at FY17F PE of 9.9x, based on the management’s guidance of 110% yoy earnings growth.

 

Upbeat on its growth prospect. We recently met the management of Buyung Poetra Sembada (HOKI IJ) and learnt that the company is optimistic that it will book solid top line growth going forward. The company, which has extensive experience in the rice business going back to 1977, sells a range of reputable brands that are distributed to modern and general traders across Indonesia and which tap all market segments. Since 3Q15, the company has worked closely with local distributors to further penetrate general trade (GT), successfully raising GT’s revenues contribution to 54.9% in 2016 from only 40.8% in 2015.

Wet paddy processing: paving the way for better margins. At the end of Dec 2016, HOKI had total installed production capacity of 302,400tons/year with a utilization rate of almost 80%. Starting mid-2016, the company added a new facility to process the wet paddy. In so doing, BPS was able to cut the supply chain which led to quality improvements in its rice milling. This should help to boost the gross margin by 2%. At present, the supply of rice from its wet paddy facility is approximately 30% of the total sales volume. In the coming years, the company plans to develop new production facilities including both wet paddy processing and rice milling (exhibit 2).

HOKI trades at FY17F PE of 9.9x. The company made its 1Q17 unaudited result available at the meeting. The 1Q17 top line reached Rp347.6bn (+72% yoy) with an improved gross margin of 16.3% (FY16: 14.7%) and bottom line of Rp26.2bn (+94% yoy). For 2017, the company is providing guidance of FY17 revenues and net profits of Rp1.3tn (+13% yoy) and Rp92bn (+110% yoy), respectively. Using fully diluted EPS from the company’s FY17 earnings guidance, the company is trading at FY17F PE of 9.9x, slightly above that of its main peer in the rice business (AISA: FY17F PE of 8.5x).

… read more 20170726 HOKI