Monday, October 29, 2012

Bukit Asam (PTBA-REDUCE-IDR16,100-TP:IDR13,100)

by Bahana : PTBA

29 October 2012  Bahana Beacon – Result Flash

3Q12 performance: Net earnings 25% lower than expected

§        3Q12 net profit down 7% q-q and 10% y-y: PTBA announced 3Q12 bottom line of IDR640b (25% lower than our 3Q12 estimate), down 7% q-q and 10% y-y. This brought 9M12 net income to IDR2.2t (-5.5% y-y), accounting for 67% of our full-year estimate and 66% of consensus.

Jasa Marga (JSMR-BUY-IDR5,700-TP:IDR7,000)

by Bahana

3Q12 earnings: In line with our and consensus’ estimates

§        3Q12 net profit down 26% q-q on extraordinary gain absence: JSMR reported 3Q12 bottom line of IDR379b, down 26% q-q and 9% y-y, in line with our and consensus estimate (77%), as the company booked IDR147b extraordinary gain in 2Q12 from the 4% CMNP stake sale. However, strong 9M12 volume growth of 11% y-y and the full-impact of periodic tariff adjustments have supported 9M12 net profit to reach IDR1.3t, +39% y-y.

Increased nucleus productivity, higher EBITDA margin

by Trimegah

Given unaggressive new planting in the last 10 years, TBLA experienced inferior FY08-FY11 FFB yield of 12-14 tons/ha (industry: 20 tons/ha), increasing TBLA’s dependency to FFB purchase from third parties (70%  of processed FFB).

3Q12 results: In line with ours and consensus’ estimates

by Bahana

Bank Danamon

§        3Q12 net profit -10.4% q-q, +1.3% y-y: BDMN registered 3Q12 net profit of IDR988 (5% below our estimate), down 10.4% q-q but up 1.3% y-y. This translates to 9M12 net profit of IDR3.0t (+22.2% y-y), in line with our (72.9%) and consensus (74.6%) estimate.

Monday, October 22, 2012

Balance & diversification

By Bahana : Property

2013: Preference towards diversification & commercial projects

Considering the strong rallies which have occurred on the selling prices of housing land since 2010 (exhibit 4), we believe property companies with diversified business models and greater exposure towards commercial and high-rise projects will outperform the  market in 2013. In our view, rising investments (exhibit 8) propping up industrial land ASPs to the highest ever this year (exhibit 9) will be followed by more expansions in retail/office/commercial segments. On the retail side, the implementation of a moratorium on malls in 2011 has curbed retail space supply and supported higher rental rates.  Demand support will also come from not only domestic retailers like MAPI and the unlisted PARA Group, but also  renowned  retailers  from  Japan, Korea, Europe and the US, capitalizing on Indonesia’s growing middle class income (exhibit 7) and looking for more space in Jakarta and Greater Jakartaareas.    Furthermore,  we  believe  rising  investment  will continue  to  support strong demand on office space, both for relocations and expansions. 

Sunday, October 21, 2012

CPO - Long-Term View Remains Strong

by BPS :

• Palm oil price has slumped over the year

Historically the price movement of palm oil and its close substitute, soy oil showed similar pattern. However, by the end of third quarter of 2012, the global palm oil price had reduced by 14%, while soy oil was relatively better, up 1% year on year (See Figure 1). Palm oil and soy oil are the two largest consumed edible oils, accounting for around 60% of major edible oil consumption (US Department of Agriculture/USDA, 2012).

Resilient 4W Sales

by BPS

• Resilient 4W volume sales

The company’s 4W sales showed resilience to the requirement of minimum DP with sales volume until 9M’12 up 24% (YoY) reaching 448k units. Meanwhile, the company’s 2W sales volume (Honda) for 9M’12 decline 3.5% (YoY) to 3.1 mn units, better than our previous estimate for FY2012F of 11% down (YoY). Even tough the company’s 2W sales declined, we note that the company’s market share was up to 58% from 52% in the same period last year. Meanwhile its nearest competitor, Yamaha, saw their market share shrink from 41% to 34%.

Biggest piece of the pie remained ASII’s

by Trimegah


Sep’12 4W sales increased 33.7% MoM

Sep’12 four-wheelers (4W) sales reached 102k units, jumped 34% MoM,  caused by lower base in Aug’12 on lesser marketing days due to Ied Holiday. Sep’12 sales volumes, which increased 28% YoY and is the second highest historical sales volumes (Jul’12 sales is the highest with 102.5k units), cementing our view that 4W sales will be less impacted by government regulation of minimum down payment for vehicle loan of 30%. 9M12 4W sales reached 816k units, up 24% YoY.

Strong as expected

by DBS

Bank Tabungan Negara : BUY; Rp1,460;

Price Target : Rp1,700; BBTN IJ

Strong as expected

·          3Q12 net profit of Rp362bn was spot on with our forecast; 9M12 at Rp1,021bn (73%/77% of our/consensus forecast)
·          NIM uptick due to cost of funds bottoming
·          Maintain BUY with TP Rp1,700

Thursday, October 18, 2012

Indonesian Bank Reiterate soft 2H12 trends

DBS : Bank
By Lim Sue Lin             +603 2711 0971      ;
Indonesia Research Team

· Unexciting 3Q12 results but there are exceptions; expect moderate growth
· Banks sound cautious, anticipating softer growth prospects
· We still like BBRI, but switch to BBTN (for small cap)

Tuesday, October 16, 2012

Cement update: September volumes: Back in business

Bahana : Cement

 12 October 2012  Bahana Beacon – Sector flash

§        +43.4% m-m & +34.4% y-y growth: Post August’s slow performance due to the Islamic holidays, the Indonesian Cement Association published outstanding September domestic cement volumes of 5.2mt (+43.4% m-m, +34.4% y-y), translating to 9M12 volumes of 39.5mt (+15.0% y-y), in line with our estimate (73% of our FY12 of 54mt, +13% y-y).  The strong September growth was also backed by solid adjusted daily production of 207k tons/day (+9.0% m-m, +23.6% y-y), the highest this year.

15 October 2012 Bahana Beacon – Corporate Flash

by Bahana : ADRO

Adaro Energy (ADRO-REDUCE-IDR1,410-TP:IDR1,120)

Lower volumes + higher cash costs = earnings downgrades

§        Lower sales volumes on weaker global coal demand: With continued worsening global economic condition, demand for thermal coal, despite its defensive nature (mainly used to generate electricity), will remain weak through 2013.  ADRO, Indonesia’s second largest coal exporter, will not be immune to this global growth deceleration.  Hence, we cut our 2012-14 sales volumes by 5%-8% from 53.6m-58.6m tons to 49.5-56m tons (exhibit 5). We note in 1H12, ADRO booked flat output of 23m tons (+0.9% y-y), while sales reached 23.7m tons (-1.4% y-y).

Earnings Discussion

by Trimegah : MDLN

Earnings Discussion

• MDLN posted 2Q12 bottom line of Rp74bn, slightly increasing by 6% QoQ while jumping by 438% YoY. 1H12 earnings reached Rp144bn, soared 185% YoY, outperforming our and consensus estimate by 7%. We perceive this increment is supported by MDLN’s new business on industrial estate division, that contributed higher GPM of 71%, compared to the residential division with 55% GPM.

Thursday, October 11, 2012

Cigarette levy is not an issue – raw material is

Trimegah : GGRM

Gudang Garam
Double-edged leadership in SKM-FF
Cigarette levy is not an issue – raw material is

In our view, if the cigarette levy is not increased consistently at a rate twice as fast as the average minimum wage growth (12.1% in 2011), then the cost of smoking will be increasingly less. Our reasoning is based on GGRM’s 2011 cost structure, where cigarette levy is 70.3% (decreasing from 74.1% in 2007) of COGS (75.8% of sales in 2011). We believe raw material price increase is more alarming for GGRM’s leading products. Kretek cigarette industry is comprised of SKT (unfiltered hand-rolled), SKM (filtered machine-rolled), while SKM is divided into two sub-categories: full-flavored (FF) and low-tar-low-nicotine (LTLN). In our view, consumers are shifting toward the latter, confi rmed by Nielsen’s report that stated that 2011 SKM-LTLN sales volume has grown by 22% YoY, while SKT, SKM-FF, and white cigarettes (i.e. Marlboro) only grew by 4%, 2%, and 5%, respectively. GGRM has been the co-leader in SKM-FF (with Djarum, 2010-2011 ICSA survey) with its Surya, Professional, and International series.

Primed for a rebound

by DBS

Indomobil Sukses Internasional : BUY; Rp5,350;

Price Target : Rp7,500 (previous: Rp8,500); IMAS IJ

Primed for a rebound

· Management less sanguine on prospects for FY12

· Yet, despite cutting FY12/13F earnings to Rp1,121/1,387bn, share still offers compelling value. Growth to rebound from 2H12

· Maintain Buy with a revised TP of Rp7,500

Alert: Sanguine Views Moderated by Capacity Constraints

Citigroup : Cement

Indonesia Cement

 Major producers upbeat on outlook; Semen Gresik remains our top pick.

Our recent conversation with major cement producers suggests that they are at their most upbeat in the past 18 months. Not only has cement volume growth been much better than their earlier expectations, this year has seen sizable cement price hikes after tepid hikes in the previous two years. Our top pick remains Semen Gresik (SMGR.JK; Rp14,800; 1) as the ongoing market share gain should continue well into 2013E as the industry’s capacity constraints worsen.

Rights issue details announced

by DBS :
Bank Tabungan Negara : BUY; Rp1,460;

Price Target : Rp1,700; BBTN IJ

Rights issue details announced

By Lim Sue Lin           
Indonesia Research Team

· Rights issue price to range between Rp1,000-1,400 (4-32% discount); ex-date on 19 Nov 2012

· Estimated FY12F EPS and ROE dilution of 15% and 2-3ppts respectively; total CAR enhanced by 4ppts

· Maintain BUY with TP Rp1,700

Tuesday, October 9, 2012

Positive newsflow but...

by JP Morgan

Wijaya Karya

Even though we are excited about the growth prospects of Wijaya Karya as mega projects are taking shape, following the 123% YTD outperformance, we view that current valuations already reflect some of the positive news. There is a risk that execution upside is capped at 25-30% y/y growth in FY13E due to difficulties on finding skilled workers. With a potential revenue cap and premium valuations, we downgrade WIKA to Neutral

Not the Time to Chicken Out

Citigroup : CPIN JPFA

Indonesian Poultry

Not the Time to Chicken Out

Raise TP for CPIN and JPFA; Upgrade CPIN to Buy — Following our 2012-2014E earnings upgrade and rolling forward our valuation, our TP for CPIN is raised to Rp3,580 (prev. Rp3,240) and JPFA to Rp6,180 (prev. Rp5,500). Our top pick is CPIN and thus we upgrade our rating from Neutral to Buy. Ability to pass on cost hikes given market-leader status and exposure to the higher-margin processed chicken business are key positives to cushion against volatile commodity/DOC prices. As for JPFA, we remain buyers of the stock. Given feed and DOC portfolio, JPFA would also be a key beneficiary of downtrends in commodity prices and uptrend in DOC prices. Furthermore, the recent merger of JPFA and MBAI means lower interest costs and further expansion plans.

Sunday, October 7, 2012

Slowing growth

by Samuel Sekuritas


 Selama 1H12 AKRA membukukan pendapatan  sebesar Rp10.7 triliun, naik 18% YoY, sementara core net income mencapai Rp298 miliar, tumbuh 23% YoY.

Reflecting Higher Cost and SG&A

by Credit Suisse

Indofood CBP (ICBP, O, PT Rp8,100): Reflecting Higher Cost and SG&A

·         Ella upgrades ICBP’s SOTP-based TP to Rp8,100 (from Rp7,350) – as she rolls over the valuation using 2013 assumptions – which equates to 18.6x 2013 P/E with 14% projected  earnings growth for 2013-14. ICBP is CS’ top pick in the Indonesian consumer space. Despite its outperformance against the JCI, ICBP valuation remains undemanding to its peers, and Ella also likes ICBP’s sound growth potential and clearer earnings visibility.

Tariff Increase For Jakarta-Cikampek

by Credit Suisse

Jasa Marga (JSMR, O, PT Rp6,750): Tariff Increase For Jakarta-Cikampek

·         The Ministry of Transportation has approved 10% tariff hike for the Jakarta-Cikampek toll road, which will be effective starting October 7, 2012. By regulation, toll-road tariff is increased every two years, where the magnitude of the increase is based on the average inflation rate.

Thursday, October 4, 2012

Baby steps

Bahana : BSDE

Bumi Serpong Damai (BSDE-BUY-IDR1,130-TP:IDR1,450)

Cut target price on slow execution, but retain BUY

Bumi Serpong Damai (BSDE) has the second largest land bank totaling to 4,945ha, of which 67% are located in Serpong, greater Jakarta area.  However, slower than expected project realizations (exhibit 15) have us cutting our target price to IDR1,450, reflecting 30% discount to NAV.  Nevertheless, we maintain a BUY on BSDE as we continue to like its solid 2012-14F operating cash flow on revenue recognition and earnings growth.  With continued net cash position to support high capex, BSDE is currently developing commercial projects (mixed used developments and office towers) in BSD City phase II (Exhibit 13) and the opening of the next township development in BSD City phase III (2,450ha).  Recently, BSDE has started the construction of The Breeze (20k sqm commercial project consisting of F&B and a supermarket on 13.5ha area) and Green Office Park lot 6 (a 5-storey building with 15k sqm leasable space) in BSD City phase II.  In spite of its small contribution to the top line, we see these commercial projects as stepping stones to help sustain growth until greater commercial projects can materialize. Thus, once BSDE can accelerate realization on its plan to develop more commercial areas and monetize its assets, we expect its share price performance to improve going forward (exhibit 5 shows just 4% ytd market outperformance, which is amongst the worst in the sector – exhibit 11 ).

Indonesia Multifinance Companies Brace for a bumpy ride


By Lim Sue Lin            

Indonesia Research Team

· 2W sales to decline after implementation of minimum down payment (DP); prospects for 4W remain robust

· Alternative growth via syariah lending may be short-lived until regulators plug the loophole

· For exposure, pick BFIN and CFIN, avoid 2W multi finance companies (MFC)

Wednesday, October 3, 2012

Not so succesful

Bahana : IMAS

2 October 2012  Bahana Beacon – Corporate Flash
Indomobil Sukses Internasional

To acquire coal mines

What the Expert Say :

Harum Energy : HOLD; Rp5,850;
Price Target : Rp6,250; HRUM IJ

Tuesday, October 2, 2012

Indonesia strategy Investor marketing feedback

by Macquarie

 We met with US investors over the past week to discuss the outlook for Indonesia’s equity market.

Key concerns remain on the currency and the trade-off BI will have to make between a weaker rupiah or higher interest rates to slow the economy. One possible solution suggested is to raise subsidized fuel prices, which should slow oil imports. However raising fuel prices is a politically sensitive option that looks increasingly difficult as we move closer to 2014’s election. Policy flexibility is also further constrained by increasingly cautious local sentiment as the rupiah moves towards psychologically important Rp10,000/US$ levels.

Bekasi project to benefit from the surrounding industrial estates

by DBS

Bumi Serpong Damai : BUY; Rp1,130;
Price Target : Rp1,800; BSDE IJ

Visit note: Bekasi project to benefit from the surrounding industrial estates
We visited BSDE’s project in Bekasi, Grand Wisata. The landbank is quite big with 800+ha remaining although much smaller compared to BSD City in Serpong. The project caters to the population in Bekasi area as well as those who are working in the nearby industrial estates. Within the Bekasi-Karawang area, there are a number of large industrial estates such as Bekasi Fajar, Jababeka, Lippo Cikarang, Delta Mas and Surya Semesta. The selling points of Grand Wisata is direct access from Cikampek toll road, distance from Jakarta is one of the closest and the development is solely residential while other projects could be mixed with industrial.