LSIP Bergelut Menghadapi Dinamika Harga CPO 20180516 NHKS Company Report (Bahasa)

  Dividend yield 2.1% 2.5% 4.1% 3.4%

  Namun demikian, dalam jangka panjang, harga kelapa sawit akan didukung oleh perlambatan pertumbuhan produksi akibat turunnya aktifitas penanaman baru. Moratorium pembukaan lahan baru sawit akan menghindarkan pasar dari kondisi oversupply dalam jangka panjang.

  37 35 45 38

  ROE 7.9% 9.7% 7.7% 8.1% ROA 6.5% 8.0% 6.4% 6.6% ROIC 7.9% 9.7% 7.7% 8.1% P/E 20.0x 12.7x 11.7x 10.6x P/BV 1.6x 1.2x 0.9x 0.8x EV/EBITDA 10.5x 7.3x 6.2x 5.4x DPS (IDR)

  15.4% 16.1% 15.8% 16.0%

  NPM

  30.7% 28.4% 28.2% 27.7%

  BVPS (IDR) 1,121 1,190 1,253 1,321 EBITDA margin

  EPS growth

  EBITDA 1,181 1,344 1,148 1,224 Net profit 594 764 642 709 EPS (IDR) 87 112 94 104

  Sales growth

  Sales 3,848 4,738 4,067 4,427

  2016/12A 2017/12A 2018/12E 2019/12E

  Untuk menjaga tingkat profitabilitas di tengah ketidakpastian harga komoditas CPO, LSIP akan terus fokus menjadi produsen berbiaya rendah dengan mengadopsi praktik manajemen yang terbaik. Target Harga Rp1.380 Kami menggunakan estimasi forward P/E sebesar 13,3x (1 SD di bawah rata-rata 3 tahun sebesar 14,9x) untuk memperoleh target harga pada Desember 2018. Target harga ini mengimplikasikan P/E 2018E sebesar 14,7x. Saat ini, LSIP diperdagangkan pada P/E 2018E sebesar 11,7x.

  Fokus Menjadi Produsen Paling Efisien di tengah Ketidakpastian LSIP mengalami penurunan penjualan 40,7% dari Rp1,46 triliun pada 1Q17 menjadi Rp868 miliar pada 1Q18. Hal ini disebabkan oleh penurunan produksi CPO sebesar 33% dari 120 juta ton pada 1Q17 menjadi 80 juta ton pada 1Q18. Selain itu, harga jual CPO juga mengalami koreksi sebesar 9,6%.

  Moratorium Sawit Menjaga Suplai Berlebih Harga komoditas CPO diperkirakan akan tetap bergejolak, terutama karena ketidakpastian fundamental dan global. Hal ini meliputi hasil panen yang tergantung kondisi cuaca, meningkatnya pasokan dari minyak nabati lainnya, fluktuasi permintaan dari pasar-pasar utama, serta ketidakpastian geopolitik.

• 16.4%
• 62 21 797 6202, ext:138
• - 8.2% 23.1%
• - 14.2% 8.8%

• - 4.7% 28.7%
• - 16.0% 10.4%

  Abs. Ret. -22.5% -20.0% -14.7% -22.3% Rel. Ret. -16.3% -13.6% -6.3% -27.6%

  12M

  3M

  1M

  Share Price Performance YTD

  PP London Sumatra Indonesia Tbk | Summary (IDR bn) Source: Company Data, Bloomberg, NHKS Research

  joni.wintarja@nhsec.co.id

  Agriculture Crude Palm Oil Bloomberg LSIP.IJ Reuters LSIP.JK Joni Wintarja

  17.17 Foreign Ownership 11.4%

  12.73 Avg. Trd Val - 3M (bn)

  40.4 Outstanding sh.(mn) 6,823 Market Cap (IDR bn) 7,573 Market Cap (USD mn) 542 Avg. Trd Vol - 3M (mn)

  Last Price (IDR) 1,100 Price date as of May 11, 2018 52 wk range (Hi/Lo) 1,560/1,095 Free float (%)

  vs. Last Price +25.5% Shares data

  Please consider the rating criteria & important disclaimer Company Report | May 16, 2018 PP London Sumatra Indonesia Tbk (LSIP) Bergelut Menghadapi Dinamika Harga CPO Buy Dec 2018 TP (IDR) 1,380 Consensus Price (IDR) 1,650 TP to Consensus Price

  Domestik Penopang Industri CPO Industri CPO pada 2018 diperkirakan akan didukung oleh perkembangan ekonomi domestik yang positif seiring berlanjutnya kebijakan fiskal Indonesia di bidang pengembangan infrastruktur dan jaminan sosial, serta besarnya konsumsi domestik di mana Indonesia sebagai konsumen produk minyak sawit yang terbesar kedua di dunia.

  Sekilas Tentang LSIP LSIP yang dikenal sebagai “Lonsum”, didirikan pada tahun 1906 pada saat Harrisons & Crosfield Plc, perusahaan perkebunan dan perdagangan yang berbasis di London, Inggris, memulai lahan perkebunan pertamanya di Indonesia berlokasi dekat kota Medan, Sumatera Utara.

  Saat ini LSIP telah berkembang menjadi salah satu perusahaan perkebunan terkemuka di dunia, dengan total lahan perkebunan inti mencapai 115.695 hektar, di mana 83% terdiri dari perkebunan kelapa sawit, sementara sisanya sekitar 14% dan 3% merupakan perkebunan karet serta perkebunan lainnya yang sebagian besar adalah kakao dan teh. Saat ini LSIP mengoperasikan 12 pabrik kelapa sawit dengan total kapasitas pengolahan

sebesar 2,5 juta ton Tandan Buah Segar (TBS) per tahun.

  Komitmen LSIP pada produk yang aman dan terlacak terefleksi pada upaya tanpa henti untuk meraih sertifikasi Roundtable Sustainable Palm Oil (RSPO) dan Indonesian Sustainable Palm Oil (ISPO). Di tahun 2017, total sertifikasi RSPO LSIP mencapai 240.000 ton atau sekitar 62% dari total produksi CPO.

  Daya Saing LSIP di ASEAN Meskpun LSIP diperkirakan akan mengalami penurunan pertumbuhan laba pada 2018, LSIP memiliki margin laba bersih tertinggi kedua setelah First Resources Ltd. Selain itu, LSIP saat ini diperdagangkan dengan valuasi yang paling murah di ASEAN sebesar 11.7x. Dengan neraca keuangan LSIP yang kuat serta bebas dari utang, LSIP memiliki deviden yield yang tertinggi sebesar 4,1%.

  ASEAN CPO Plantation Company Market Cap Total Asset Net Profit Net Profit Dividend Company ROE P/E P/BV (USD mn) (USD mn) Growth Margin Yield

  LSIP 542 717 16.0% 15.8% 7.7% 11.7x 0.9x 4.1%

• AALI 2,004 1,835 11.3% 11.3% 11.7% 12.7x 1.4x 3.5%

  Malaysia

  Genting Plantations Bhd 2,066 2,085 3.3% 18.7% 7.7% 23.1x 1.9x 1.3%

• Kuala Lumpur Kepong Bhd 6,914 4,619 16.6% 4.8% 8.5% 28.0x 2.3x 2.0%
• IOI Corp Bhd 7,711 4,193 99.6% 5.3% 20.8% 20.3x 4.7x 2.0%

  Singapore

  Wilmar International Ltd 15,308 40,933 25.4% 2.8% 8.0% 12.5x 1.0x 2.2% Golden Agri-Resources Ltd 3,489 8,138 81.5% 1.0% 1.8% 48.1x 0.9x 3.9%

• First Resources Ltd 2,085 1,731 9.8% 21.3% 14.9% 15.1x 2.1x 2.1%

  Source: Bloomberg, NHKS research

  Performance Highlights LSIP Sales Breakdown | 1Q18 LSIP Quarterly Net Profit | 2015 - 2018

  Source: Company, NHKS Research Source: Company, NHKS Research

  

Malaysia Palm Oil Inventory (000’ tons) | 2016-2018 Malaysia Palm Oil Production Data (000’ tons) | 2016-2018

  Source: MPOB, Bloomberg, NHKS Research Source: MPOB, Bloomberg, NHKS Research

  LSIP CPO Sales Volume | 2015 - 2018 CPO CIF Rotterdam (IDR/kg) | 2011-2018

  Source: Bloomberg, NHKS Research Source: Company, NHKS Research

  Multiple Valuation Forward P/E Band | Last 3 years Dynamic Forward P/E band | Last 3 year

  Source: NHKS research Source: NHKS research

  Rating and target price update Target Price Revision Date Rating Target Price Last Price Consensus vs Last Price vs Consensus

  07/10/2017 Buy 1,970 (Dec 2017) 1,430 1,705 +37.7% +15.5% 10/12/2017 Buy 1,970 (Dec 2018) 1,440 1,700 +36.8% +15.9% 01/05/2018 Buy 1,540 (Dec 2018) 1,320 1,750 +16.7% 12.0%

• 05/16/2018 Buy 1,380 (Dec 2018) 1,100 1,650 +25.5% 16.4%
• Source: NHKS research, Bloomberg

  Analyst Coverage Rating Closing and Target Price

  Source: Bloomberg Source: NHKS research

  NH Korindo Sekuritas Indonesia (NHKS) stock ratings

  1. Period: End of year target price

  2. Rating system based on a stock’s absolute return from the date of publication : Greater than +15%

   Buy : -15% to +15%  Hold : Less than -15%  Sell

  Summary of Financials

DISCLAIMER

INCOME STATEMENT BALANCE SHEET

  

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errors, omissions, misstatements, negligence, inaccuracy arising herefrom. All rights reserved by PT NH Korindo Securities Indonesia ^{LSIP Summary Last Price (IDR) 1,100}

^{Target Price (IDR) Dec 2018 1,380 2016/12A 2017/12A 2018/12E 2019/12E}

^{Analyst: Joni Wintarja Rating: Buy ROE 7.9% 9.7% 7.7% 8.1% ROA 6.5% 8.0% 6.4% 6.6% ROIC 7.9% 9.7% 7.7% 8.1% EBITDA/Equi ty 15.8% 17.1% 13.8% 13.9%}

^{In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E EBITDA/As s ets 12.9% 14.0% 11.4% 11.4%}

^{Sales 3,848 4,738 4,067 4,427 Ca s h Di vi dend (IDR bn) 252 239 306 257}

^{Growth (% y/y) -8.2% 23.1% -14.2% 8.8% Di vi dend Yi el d (%) 2.1% 2.5% 4.1% 3.4%}

^{COGS (2,737) (3,395) (2,943) (3,190) Pa yout Ra ti o (%) 40.5% 40.2% 40.0% 40.0%}

^{Gross Profit 1,111 1,343 1,124 1,237 DER 0.0% 0.0% 0.0% 0.0%}

^{Gross Margin 28.9% 28.3% 27.6% 27.9% Net Gea ri ng 0.0% 0.0% 0.0% 0.0%}

^{Opera ti ng Expens es (300) (384) (376) (409) LT Debt to Equi ty 0.0% 0.0% 0.0% 0.0%}

^{EBIT 811 958 749 828 Ca pi ta l i za ti on Ra ti o 0.0% 0.0% 0.0% 0.0%}

^{EBIT Margin 21.1% 20.2% 18.4% 18.7% Equi ty Ra ti o 80.8% 83.4% 82.8% 81.2%}

^{Depreci a ti on 370 386 399 396 Debt Ra ti o 0.0% 0.0% 0.0% 100.0%}

^{EBITDA 1,181 1,344 1,148 1,224 Fi na nci a l Levera ge 123.7% 120.0% 120.8% 123.2%}

^{EBITDA Margin 30.7% 28.4% 28.2% 27.7% Current Ra ti o 245.9% 520.9% 469.9% 542.7%}

^{Interes t Expens e - - - - Qui ck Ra ti o 156.7% 405.8% 378.7% 443.2%}

^{EBT 779 1,007 842 929 Ca s h Ra ti o 146.1% 392.4% 370.2% 428.4%}

^{Income Ta x (186) (243) (201) (222) Ca s h Convers i on Cycl e 59.9 49.0 64.4 48.6 Mi nori ty Interes t 1 1}

^{Net Profit 594 764 642 709 Tota l Sha res (mn) 6,823 6,823 6,823 6,823}

^{1 Pa r Va l ue (IDR) 100 100 100 100}

^{Growth (% y/y) -4.7% 28.7% -16.0% 10.4% Sha re Pri ce (IDR) 1,740 1,420 1,100 1,100}

^{Net Profit Margin 15.4% 16.1% 15.8% 16.0% Ma rket Ca p (IDR tn) 11.9 9.7 7.5 7.5 In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E}

^{Ca s h 1,141 1,633 2,073 2,577 Pri ce /Ea rni ngs 20.0x 12.7x 11.7x 10.6x}

^{Recei va bl es 82 56 48 89 Pri ce /Book Va l ue 1.6x 1.2x 0.9x 0.8x}

^{Inventori es 569 308 267 391 Pri ce/Sa l es 3.1x 2.0x 1.8x 1.7x}

^{Total Current Assets 1,920 2,168 2,632 3,265 PE/EPS Growth -4.2x 0.4x -0.7x 1.0x}

^{Fi xed As s ets 6,366 6,229 6,381 6,567 EV/EBITDA 10.5x 7.3x 6.2x 5.4x}

^{Other Non Current As s ets 546 471 426 475 EV/EBIT 15.3x 10.2x 9.5x 8.0x}

^{Total Assets 9,459 9,744 10,327 11,104 EV (IDR bn) 12,444 9,768 7,144 6,641}

^{Pa ya bl es 120 129 112 136 Sa l es CAGR (3-Yr) -2.4% 0.1% -1.0% 4.8%}

^{ST Debt - - - - EPS CAGR (3-Yr) -8.3% -5.9% 1.0% 6.1%}

^{Other Current Li a b. 661 288 449 466 Ba s i c EPS (IDR) 87 112 94 104 LT Debt - - - - Di l uted EPS (IDR) 87 112 94 104}

^{Other Non Current Li a b. 550 230 305 362 BVPS (IDR) 1,121 1,190 1,253 1,321}

^{Total Liabilities 1,813 1,622 1,776 2,092 Sa l es PS (IDR) 564 694 596 649}

^{Shareholders' Equity 7,646 8,122 8,551 9,013 DPS (IDR) 37 35 45 Net Income 594 764 642 709 DCF (IDR bn) 38 In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E Deprec & Amorti za ti on 370 386 399 396 NOPAT 617 727 570 630 Chg. In Worki ng Ca pi ta l 109 (120) 121 (88) +Depr./Amor. 370 386 399 396 CFO 1,073 1,030 1,161 1,017 -CAPEX (374) (293) (401) (581) Ca pex (374) (293) (401) (581) -Incr. (Decr.) i n Worki ng Ca p. 109 (120) 121 (88)}

^{CFI (364) (293) (358) (265) (Unl evered) FCFF 722 700 688 357}

^{Di vi dends Pa i d (252) (239) (306) (257) WACC Net Borrowi ng (PMT) - - - - Cos t of Debt (Ta x Adj.) 7.0% 6.3% 7.1% 7.1% CFF (293) (225) (306) (247) Cos t of Equi ty (COE) 9.2% 9.5% 9.7% 9.7% Net Changes in Cash 416 511 497 504 WACC (%) 9.2% 9.5% 9.7% 9.7% RIM Sprea d (FROE-COE) (%) -1.4% -0.1% -2.2% -1.9% Res i dua l Income (IDR) (108) (4) (190) (168)}

^{By Geography % Shareholders % Equi ty Cha rge 702 768 832 877}

^{Indones i a 88.6 Sa l i m Ivoma s Pra ta ma 59.5 EVA Uni ted Sta tes 7.5 Di mens i ona l Fund 2.2 Inves ted Ca pi ta l (IDR bn) 7,646 8,122 8,551 9,013 Fi nl a nd 1.0 Va ngua rd Group 1.3 ROIC-WACC (%) -1.4% -0.1% -2.2% -1.9% Ca na da 0.9 Bl a ckrock 0.9 EVA (IDR bn) (108) (4) (190) (168)}

  CASH FLOW STATEMENT DCF, RIM & EVA OWNERSHIP PROFITABILITY & STABILITY _{May 11, 2018}