DBS Research Group analysts William Simadiputra and Woon Bing Yong see plantation stock Bumitama Agri as a potential bargain, arguing that a positive earnings outlook for the stock has yet to have been priced in by the market. They are maintaining their “buy” call on the counter with a $0.66 target price. 

Bumitama saw 3Q2020 net earnings of Rp190 billion ($1.82 million), which represented a 0.7% y-o-y and a 6.5% q-o-q improvement. This figure outperformed the expectations of the analysts on the basis of stronger than expected sales volume and palm oil prices in line with consensus. 

CPO sales volume rose 6.1% q-o-q to 237,200 metric tonnes while palm kernel sales volume fell 4.4% q-o-q to 48,900 metric tonnes. CPO and PK average selling price (ASP) reached Rp 7,922 and Rp3,995 respectively. 

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