Equity Research FLASH NOTE
BISI International
Strong Start, Strong Finish
BUY
1Q16 results: higher volume, higher margin BISI posted strong results, with net profit grew by 35% YoY to Rp65 bn. Revenue was up 30% YoY to Rp341bn, while gross profit grew higher (42% YoY) thanks to margin expansion from corn seeds and pesticides. Opex/revenue increase to 16% (vs 14% in 1Q15), driven by 48% YoY increased in marketing expenses.
Current price Price target Upside/Downside 29 April 2016
1Q16
1Q15
YoY
4Q15
QoQ
2016F
% of est
Revenue (Rp bn)
341
263
30%
442
-23%
1,647
21%
Gross Profit (Rp bn)
131
92
42%
186
-30%
628
21%
Operating Profit (Rp bn)
79
57
39%
72
10%
406
20%
Net Profit (Rp bn)
65
48
35%
76
-14%
305
21%
Gross Margin
38.3%
34.9%
3.4%
42.1%
-3.8%
38.1%
Stock Data
Operating Margin
23.2%
21.7%
1.5%
16.3%
7.0%
24.7%
Net Margin
19.2%
18.4%
0.8%
17.2%
2.0%
18.5%
Bloomberg Ticker Outs. Share (bn) Mkt Cap (USD bn) 52 Week Range (Rp) 6M Avg Val (Rp bn) YTD Returns (%) Beta (x)
Corn seeds and pesticides drive profit growth Corn seeds gross profit grow by 159% YoY, from a combination of 90% YoY volume growth and +800bps GPM expansion supposedly from better product mix. Gross profit for pesticides grew by 20%, despite reporting relatively flat revenue and volume, as GPM improve to 37% (vs 26% in 1Q15) given lower cost of production thanks to weakening USD. More to come from corn seeds business, maintain BUY Keep note that sales on corn seeds during 1Q16 only comes from free market. Strong volume growth implies that a more favorable selling price has provided incentive for farmers to increase corn acreage to produce more corn. This condition will definitely positive for BISI. At present, we are still reviewing our earnings forecast and price target. BISI is currently trading at 16.2x and 2.4x PBV 2016F.
Key investment metrics 2013
2014
2015
2016F
2017F
Revenue (Rp bn)
1,056
1,156
1,438
1,647
2,062
Net profit (Rp bn)
127
165
264
305
397
EPS growth
-1.5%
29.9%
60.0%
15.6%
30.2%
Net profit margin
12.0%
14.3%
18.4%
18.5%
19.3%
ROE
8.6%
10.3%
14.5%
14.9%
17.0%
ROA
7.4%
8.8%
12.3%
13.4%
15.1%
ROIC
8.9%
10.2%
14.1%
15.7%
18.9%
P/E (x)
39.0
30.0
18.8
16.2
12.5
3.4
3.1
2.7
2.4
2.1
P/BV (x) EV/EBITDA (x)
26.6
21.1
13.5
10.1
7.4
Dividend yield
0.6%
0.7%
1.3%
1.5%
2.0%
Rp1,665 Rp2,000 20.1%
INDONESIA Agriculture BISI IJ Equity 3.00 0.39 830-1,835 1.7 25.2 1.2
Share Price Performance 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Share Performance (%) Month Absolute Relative 3m 23.2 20.1 6m 31.1 27.8 12m 28.4 47.2
Inav Haria Chandra
[email protected] +62 21 8067 3133
SucorInvest
BISI International
29 Apr 2016
Financial Summary Profit and loss (Rp bn) Total revenue Cost of Revenue Gross Profit Operating expense Operating profit EBITDA Interest expense Interest income Forex gain (loss) Other income (exp) Pre-tax income Income tax exp (benefit) Minority interest Extraordinary items Net profit
2013 1,056 608 448 297 161 181 1 6 (10) 0 156 29 0 127
2014 1,156 752 403 213 207 226 1 7 (0) (3) 209 44 0 165
2015 1,438 875 562 273 321 343 1 12 0 332 68 0 264
2016F 1,647 1,019 628 222 406 428 8 386 81 305
2017F 2,062 1,257 805 245 560 582 23 503 105 397
Balance sheet (Rp bn) Cash ST investments Accounts receivable Inventories Others Total Current Assets
2013 131 567 693 18 1,409
2014 174 627 534 194 1,530
2015 315 722 713 29 1,778
2016F 618 588 604 129 1,939
2017F 653 736 715 179 2,283
PP&E - net Others Total Assets
249 54 1,713
276 66 1,871
293 70 2,142
310 18 2,268
332 5 2,621
83 102 185
89 122 211
144 135 279
114 71 185
131 83 214
52 0 1,476 1,713
55 0 1,605 1,871
47 0 1,815 2,141
40 2,043 2,268
66 2,341 2,621
ST borrowing Accounts payable Other current liabilities Total Current Liabilities Long-term loan Others Minority Interest Shareholders' equity Total Liabilities and Equity
2
SucorInvest
BISI International
29 Apr 2016
Cashflow (Rp bn) EBIT D&A Others Change in working capital Interest & taxes Operating cash flow
2013 161 20 (29) (27) (24) 100
2014 207 20 (12) (51) (38) 126
2015 321 22 (4) (40) (57) 242
2016F 406 22 (21) (102) (81) 224
2017F 560 22 (58) (231) (105) 188
Capital expenditures Disposal of fixed asset Change in ST investment Dividend received Others Investing cash flow
(16) 1 (16)
(48) 3 (45)
(39) 1 (38)
(42) (42)
(47) (47)
85
80
204
182
141
Change in Equity Net change in LT borrowings Net change in ST borrowings Cash Dividends Paid Others Financing cash flow
(50) (30) 0 (80)
(1) (36) 0 (37)
(63) (0) (63)
(76) 5 (71)
(99) 15 (84)
Beginning cash Change in cash Other adjustment Ending cash
126 5 (0) 131
131 44 174
174 141 (1) 315
315 303 618
618 35 653
2016F 38.1% 24.7% 18.5% 14.9% 13.4% 15.7% 16.2 2.4 4,331 10.1 1.5% 3.7% (618) (1.4) -30%
2017F 39.0% 27.2% 19.3% 17.0% 15.1% 18.9% 12.5 2.1 4,296 7.4 2.0% 2.8% (653) (1.1) -28%
Free cashflow
Key ratios Gross profit margin Operating profit margin Net Profit margin ROE ROA ROIC PE (x) PBV (x) EV (Rp bn) EV/EBITDA (x) Dividend yield Free cash flow yield Net debt (Rp bn) Net debt/EBITDA Net debt/equity
2013 42.4% 15.3% 12.0% 8.6% 7.4% 8.9% 39.0 3.4 4,819 26.6 0.6% 1.7% (131) (0.7) -9%
2014 34.9% 17.9% 14.3% 10.3% 8.8% 10.2% 30.0 3.1 4,784 21.1 0.7% 1.6% (174) (0.8) -11%
2015 39.1% 22.3% 18.4% 14.5% 12.3% 14.1% 18.8 2.7 4,634 13.5 1.3% 4.1% (315) (0.9) -17%
3
SucorInvest
BISI International
29 Apr 2016
Sucorinvest rating definition, analysts certification, and important disclosure
Ratings for Sectors Overweight Neutral months. Underweight
: We expect the industry to perform better than the primary market index (JCI) over the next 12 months. : We expect the industry to perform in line with the primary m arket index (JCI) over the next 12 : We expect the industry to underperform the primary market index (JCI) over the next 12 months.
Ratings for Stocks Buy Hold Sell
: We expect this stock to give return (excluding dividend) of above 10% over the next 12 months. : We expect this stock to give return of between -10% and 10% over the next 12 months. : We expect this stock to give return of -10% or lower over the next 12 months.
Analyst Certification The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed in this research report accurately reflect their personal views about any and all of the subject securities or issuers. The research analyst(s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
Disclaimers This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. PT Sucorinvest Central Gani accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. PT Sucorinvest Central Gani and its directors, officials and/or employees may have positions in, and may affect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. PT Sucorinvest Central Gani may also seek investment banking business with companies covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
4
SucorInvest
BISI International
29 Apr 2016
Sales Office & Research PT. Sucorinvest Central Gani HEAD OFFICE PT. Sucorinvest Central Gani Equity Tower, 31st Floor Jl. Jend Sudirman Kav. 52-53 Jakarta 12190 – Indonesia Ph : (+62-21) 2996 0999 Fax : (+62-21) 5797 3938 JAKARTA Equity Tower, 31st Floor Jl. Jend Sudirman Kav. 52-53 Jakarta 12190 – Indonesia Ph : (+62-21) 2996 0999 Fax : (+62-21) 5797 3938 Ruko Pluit Village (Mega Mall Pluit) no. 30 Jl. Pluit Indah Raya, Jakarta Utara 14450 Ph: (+62-21) 6660 7599 (+62-21) 6660 7607 Fax: (+62-21) 6660 7610 Ruko Mangga Dua Square Blok F no. 39 Jl. Gunung Sahari Raya, Jakarta Utara 14420 Ph: (+62-21) 2961 8899 Fax: (+62-21) 2938 3525 Wisma 77 Lt.17 Jl. Letjend S. Parman Jakarta Barat 11410 Ph: (+62-21) 536 3033 Fax: (+62-21) 5366 2966 Ruko Inkopal Block A No. 23 A Jl. Boulevard Barat Raya Jakarta Utara 14240 Ph: (+62-21) 4585 9114 Fax: (+62-21) 4585 9227 Ruko Puri Niaga 1 Blok K7 / 3T Jl. Puri Kencana Jakarta Barat 14240 Ph: (+62-21) 582 3117 Fax: (+62-21) 582 3118 GALERI INVESTASI Universitas PANCASILA Jl. Srengseng Sawah, Lenteng Agung, Jakarta Selatan 12640 Ph: (+62-21) 787 3711
GALERI INVESTASI Universitas Krisnadwipayana Jl. Raya Jatiwaringin, Pondok Gede Jakarta Timur 13620
YOGYAKARTA Jl. Poncowinatan No. 94 Yogyakarta 55231 Ph: (+62-274) 580 111 Fax: (+62-274) 580 111
Kiosk Mall Ambassador Lantai Dasar Blok H No.3A Jl. Professor Doktor Satrio Jakarta Selatan 12940
GALERY INVESTASI Universitas Ahmad Dahlan Lab kompt FE Lt-2 kampus 1 Universitas Ahmad Dahlan Jl. Kapas no 9, Semaki, Umbulhardjo, Yogyakarta 55166 Ph: (+62-274) 71 700 48
GALERI INVESTASI Univesitas Islam 45 Bekasi Jl. Cut Meutia NO.83, Bekasi 17113 TANGERANG Ruko PDA No.9 Jl.Raya Boulevard Gading Serpong Tangerang 15810. Ph : (+62-21) 54210990 GALERI INVESTASI Surya University Gedung 01 Scientia Business Park Jl. Boulevard Gading Serpong Blok O/1 Summarecon Serpong Tangerang 15810 BOGOR Komplek Ruko V Point Jl. Pajajaran Blok ZG, Bogor 16144 Ph: (+62-251) 835 8036 Fax: (+62-251) 835 8037 GALERI INVESTASI STIE Kesatuan Bogor Jl. Ranggagading No.1 Bogor 16123 Ph : (+62-251) 835 8036 BANDUNG Ruko Paskal Hyper Square Blok B No.47 Jl. Pasir Kaliki No. 25 - 27 Bandung 40181 Ph: (+62-22) 8778 6206 Fax: (+62-22) 8606 0653
MALANG Jl. Jaksa Agung Suprapto No.40 Kav. B4, Malang 68416 Ph: (+62-341) 346 900 Fax: (+62-341) 346 928
GALERI INVESTASI Universitas Negeri Surabaya PIC : Wahyudi Maksum Kampus ketintang Gedung bisnis centre fakultas ekonomi Jl. Ketintang, Surabaya 60231 Ph: (+62-31) 8297123 GALERI INVESTASI Universitas 17 Agustus 1945 Jl. Semolowaru 45 Surabaya 60118 BALI Jl. Raya Puputan Renon No.60C, Denpasar 80226 Ph : (+62-361) 261 131 Fax: (+62-361) 261 132
GALERI INVESTASI UNIVERSITAS MERDEKA Jl. Terusan Dieng No.59, Malang 65146 Ph: (+62-341) 580 900 KEDIRI GALERI INVESTASI UNIVERSITAS NUSANTARA PGRI Jl. KH Ahmad Dahlan 76, Kediri 64112 Ph : (+62-354) 7417352 SURABAYA Jl. Trunojoyo no.67 Surabaya 60264 Ph: (+62-31) 563 3720 Fax: (+62-31) 563 3710 Jl. Slamet no. 37 Surabaya 60272 Ph : (+62-31) 547 9252 Fax : (+62-31) 547 0598 Ruko Pakuwon Town Square AA2-50 Jl. Kejawen Putih Mutiara, Surabaya 60112 Ph: (+62-31) 5825 3448 Fax: (+62-31) 5825 3449
JL.Hegarmanah No.57 Bandung 40141 Ph: (+62-22)-203 3065 Fax: (+62-22) 203 2809
Research 1. Inav Haria Chandra 2. Adityo M. Yogiswara 3. Alexander Budiman 4. Sharon Anastasia Tjahjadi 5. Felicia Putri 6. Sandy Ham 7. Emily Bonosusatya 8. Ahmad Hapiz
Email Equity Analyst Equity Analyst Equity Analyst Equity Analyst Equity Analyst Equity Analyst Equity Analyst Equity Analyst
[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]
5
