28 September 2018

KONTAN.CO.ID - JAKARTA. PT Mahkota Group Tbk Perfomance ( MGRO ) is predicted to be positive until the end of the year. As the assets of this plantation issuer increase.

“With the increase in MGRO's assets in the first six months of this year, it is estimated that financial performance will also increase by the end of the year,” said Panin Sekuritas analyst William Hartanto, Friday (28/9).

William then continued that the construction of a refinery plant to produce cooking oil will certainly help sustain the company's performance in the future.

However, he sees MGRO's performance will encounter obstacles from Crude Palm Oil (CPO) prices which are still low and the trend is weakening.

“So, I think the palm oil processing products that are now running can be used to anticipate, because the price of raw materials is low, the palm oil needs to be processed so that the selling price is even higher,” he explained.

In terms of stocks, he recommends buying MGRO shares with a target price at the end of the year at the level of IDR 470 to IDR 500 per share.

For information, MGRO already has a number of palm oil processing plants located in North Sumatra and Riau.

In addition, it has started construction of a refinery project to produce cooking oil and kernel crushing plant in Dumai on Wednesday (26/9). The refinery plant is targeted to be operational by June 2019.

“This factory has a production capacity of 1,500 tons per day. While the kernel crushing plant has a capacity of 400 tons per day,” explained MGRO President Usli Sarsi, last Thursday (27/9).

For the construction of the factory, Usli said MGRO poured funds of IDR 330 billion. “The details of these funds are from the IPO taken IDR 90 billion. Then the remaining 120 billion from the company's internal cash and 120 billion from bank loans,” he explained.

Usli continued that the cooking oil products produced will be distributed throughout Indonesia and partnered with various national retail companies.

However, the cooperation is still undetermined because it is still in the process of exploring cooperation with these retail companies.

Not stopping at cooking oil, MGRO will also continue to expand its Palm Oil-based business by producing various derivative products, such as Biodiesel.

Given that the government has established B20, it is likely that MGRO will build a biodiesel plant in the future.

“It is possible that at the end of 2019 or early 2020 a Biodiesel Plant will be built, the funds for which are likely to be taken from company funds and bank loans,” Usli said.

For your information, MGRO posted a fairly positive performance in the first six months of this year.

MGRO posted an 11% increase in revenue of IDR 836.59 billion as of June 30, 2018 from IDR 755.04 billion in the same period the previous year.

Loss attributable to owners of the parent entity fell 28.5% to IDR 17.82 billion from IDR 24.93 billion in June the previous year.

The company's total assets increased by 1.7% to IDR 981.96 billion as of June 30, 2018, up from IDR 964.71 billion as of December 31, 2017.

Source : http://m.kontan.co.id/news/analis-panin-rekomendasikan-beli-saham-mahkota-group-mgro-ini-alasannya/