30 Juni 2021
DSNG IJ - MNC Sekuritas Company Snapshot 30 June 2021
National ESG Leader
Lowered Export Levy
•The Government has agreed to narrow the CPO price range that is subjected to levy from USD750/mt to USD1,000/mt. With every increase of USD50 on price, the levy increased by USD20, capped at USD175 from previously at USD255.
•With 16.79% export weight from the total revenue, DSNG’s revenue in the 2H21E could potentially increase as the export fee portion drop to below 30% of the CPO price.
Rumored Acquisition
•DSNG was previously said to potentially be acquired by PT Triputra Agro Persada Tbk (TAPG). However, there has not been any official statements from both companies.
•If it really did come into action, we believe DSNG would be able to benefit from the digitalization that has been done by TAPG within their operation which will result in cost efficiency.
Strong Contender
•DSNG is the winner in the Indonesian ESG game with the highest ESG rank at 16, while the other peers are above 30.
•Subsequently, DSNG’s PBV is still quite attractive as it remains below 1x compared to peers.
•While, DSNG valuations (EV/ha and EV/EBITDA) are quite high due to higher productivity and ESG value.
Quite a Performance
•DSNG ‘s revenue managed to grow by 3% YoY to IDR1.64 trillion in the 1Q21, supported by a higher CPO ASP at IDR8.7 million/ton, although sales volume dropped by 5% YoY to 135,000 tons.
•Furthermore, net income also booked a significant increase of 22% YoY to IDR99.7 billion in 1Q21.
Valuation and Recommendation: NOT RATED
DSNG is currently trading at -1STD at 0.83x PBV; There is potential margin increase with the decrease on export levy as well as from the CPO price uptrend. With the increasing investor’s appetite toward ESG stocks, DSNG is one of the most lucrative choice.
DSNG
