In the first quarter of 2017 revenue of Tiga Pilar Sejahtera Food fell 12.3 percent year-on-year (y/y) to IDR 1.46 trillion (approx. USD $109.8 million), particularly because the company's rice sales fell 17.2 percent (y/y) due to falling demand from Bulog, Indonesia's state food procurement body.

The management of Tiga Pilar Sejahtera Food earlier said to expect net profit to fall 15.3 percent (y/y) in full-year 2017 to IDR 502.5 billion, primarily due to weakening rice sales. However, this may be a too rosy forecast according to UOB Kay Hian Sekuritas.

A positive development, however, is that one of Tiga Pilar Sejahtera Food's subsidiaries is scheduled to conduct an initial public offering (IPO) on the Indonesia Stock Exchange at the end of the year. Dunia Pangan, the rice unit of Tiga Pilar Sejahtera Food (which is able to produce up to 480,000 tons of rice per year), plans to offer 20 percent of its enlarged capital to the public. This IPO should also give a boost to demand for shares of Tiga Pilar Sejahtera Food.

Regarding the long-term, the outlook for Tiga Pilar Sejahtera Food remains positive. UOB Kay Hian Sekuritas set the target price of the company's shares at IDR 2,050 a piece (reflecting a price-to-earnings ratio at 12.9, entry level at IDR 1,800).

Stock Quote Tiga Pilar Sejahtera Food - AISA: