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STOCK RECOMMENDATION - JAKARTA. PT Triputra Agro Persada Tbk (TAPG) is set to distribute dividends of IDR 1.8 trillion from the 2023 fiscal year. This decision was approved by shareholders at the Annual General Meeting of Shareholders (AGM) of TAPG, held on Thursday (2/5).
For context, TAPG recorded a net profit of IDR 1.6 trillion in 2023, a decrease of 46.05% year on year (YoY) from the previous IDR 2.98 trillion.
TAPG's operating income also fell 10.91% YoY to IDR 8.32 trillion last year. At the end of 2022, TAPG's operating income was recorded at IDR 9.34 trillion.
TAPG also has an unallocated profit balance for the 2023 fiscal year of IDR 5.75 trillion. A portion of this profit balance, amounting to IDR 145.32 billion, will be added to the dividend.
Therefore, the total dividend distributed by TAPG is IDR 1.80 trillion or equivalent to IDR 91 per share. This value increased by up to 140% compared to the dividend per share value last year.
TAPG also budgeted a capital expenditure (capex) of IDR 669 billion in 2024. 12% for plants, 69% for infrastructure, buildings, vehicles and installations-equipment, 11% for mills, and the remaining 8% for other capex.
In the first quarter of 2024, TAPG's sales were recorded at IDR 1.91 trillion, down 0.71% YoY from the previous IDR 1.92 trillion. Meanwhile, the profit for the period attributable to the parent entity was IDR 370.8 billion, up 25.8% YoY from IDR 294.7 billion.
Yasmin Soulisa, an analyst at Ciptadana Securities Asia, predicts that the price of crude palm oil (CPO) will remain stable at MYR 4,500 per ton due to the slow recovery of CPO production in Indonesia and Malaysia as a result of El Nino.
With the projection of an increase in the average selling price (ASP) of CPO, TAPG's sales in 2024 will also increase.
"On the other hand, fertilizer prices are likely to stabilize this year, which will reduce TAPG's production costs in 2024," she said in a Ciptadana Securities Asia research dated March 14, 2024.
Yasmin recommends buying TAPG with a target price of IDR 700 per share.
Head of Investment at Nawasena Abhipraya Investama, Kiswoyo Adi Joe, said that TAPG's performance in 2024 will be better than in 2023. This is driven by the age of TAPG's palm trees entering the productive period, which is at 12.5 years.
TAPG also recorded fresh fruit bunch (FFB) production of 672 thousand tons and CPO production of 214 thousand tons in the first quarter of 2024. TAPG's first quarter performance for FFB and CPO has met about 22% of the 2024 target.
However, according to Kiswoyo, the negative sentiment for the CPO industry this year is if the price of soybean and corn oil is lower than the price of CPO. If alternative vegetable oils are cheaper, the demand for CPO may decrease.
"Especially, the majority of countries that use CPO still come from the Asian region, especially India and China," he told Kontan on Thursday (2/5).
Kiswoyo recommends buying TAPG with a target price of IDR 750 - IDR 800 per share.
Investment Consultant at Reliance Securities Indonesia, Reza Priyambada, sees that the sales performance of CPO issuers depends more on the reference price of contracts with customers. As a result, TAPG just needs to maintain their market share and CPO sales volume if they want to maintain good performance this year.
"Looking at the current fluctuations, the price of CPO is likely to move in the range of MYR 750 - MYR 800 per ton," he told Kontan on Thursday (2/5).
Reza recommends buying TAPG with a target price of IDR 725 per share.
