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Stock Shoot - AGRO
January 16, 2017 10:43 WIB

Kinerja harga saham AGRO cenderung menguat untuk menguji harga 800 - 850, dimana target harga tersebut merupakan target harga selama 52 minggu sebelumnya. Sebelumnyam rekomendasi beli saham AGRO di sampaikan pada tanggal 10 Nov 2016 di harga 318 dengan rekomendasi jual saham AGRO pada harga 400 tanggal 14 Nov 2016, dengan total pertumbuhan sebesar 26%. Download artikel selengkapnya(431.01 Kb)

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Danareksa Equity Snapshot - SMBR 16 Januari 2017
January 16, 2017 10:34 WIB

Semen Baturaja

Improving performance but rich valuation

We reiterate our SELL call on SMBR with a target price of Rp390 (DCF based valuation with WACC of 12.0% and growth of 3.0%). Our target price implies 25.6x 2017F PE, slightly below SMBR’s four-year average forward PE of 30.4x. While we believe that SMBR can increase its sales volume by 6.5% yoy and its EBITDA margin by 3.5ppt in 2017, we don’t believe that its lofty valuation can be justified. SMBR is currently trading at 144.3x 2017F P/E.

Encouraging performance in 2016 and we expect the trend to continue in 2017. In 2016, SMBR managed to record sales volume of 1.6mn tons, up by 6.1%, outperforming the industry which saw flattish cement sales in 2016. SMBR’s stellar performance was supported by the development of multiple infrastructure projects, including LRT Palembang and the Palembang Indralaya toll road. In 2017, we expect the uptrend in cement sales to continue, with the company estimated to record total sales of 1.7mn tons, up by 6.5% yoy. Note that our sales target is 15.0% lower than the management’s target of 2.0mn tons.

Higher sales will come at the expense of lower ASP, however. Given the arrival of new entrants and considering the close proximity of SMBR’s home market to the western part of Java, we believe that pricing pressure in the retail market will be more severe in 2017, particularly in Lampung and South Sumatera. Our view is that SMBR will more aggressively defend its supremacy in its home market following the commencement of the Baturaja II plant with capacity of 1.85mn tons.

Baturaja II to start commercial production soon. SMBR is still constructing its Baturaja II plant with installed capacity of 1.85mn tons. Construction progress has reached 90%. As such, the company expects to start commercial production in 2H17. Upon commencement of this plant, we believe that the portion of externally purchased clinkers will decline considerably (in 2016, purchased clinkers reached 280,000 tons, while in 2017 they will only reach an estimated 120,000 tons). Coupled with lower electricity costs from the migration to electricity consumption bracket I-4 from I-3, we estimate that the company’s EBITDA margin will widen by 3.5ppt in 2017.

Maintain SELL. We reiterate our SELL call on SMBR with a target price of Rp390 (DCF based valuation with WACC of 12.0% and growth of 3.0%), slightly lower than our previous target price of Rp400, as we take into account the expectation of higher energy prices and more severe pressure on pricing.

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