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Danareksa Equity Snapshot - HOKI 26 Juli 2017
July 26, 2017 11:45 WIB

Buyung Poetera Sembada

 

Better margins in store

Buyung Poetra Sembada (BPS) is upbeat on its growth prospect, on the back of greater distribution network to general trades as well as the expectation to see the full-year impact of its wet paddy processing, which should translate to improve gross margin this year. At current price, the stock is trading at FY17F PE of 9.9x, based on the management’s guidance of 110% yoy earnings growth.

 

Upbeat on its growth prospect. We recently met the management of Buyung Poetra Sembada (HOKI IJ) and learnt that the company is optimistic that it will book solid top line growth going forward. The company, which has extensive experience in the rice business going back to 1977, sells a range of reputable brands that are distributed to modern and general traders across Indonesia and which tap all market segments. Since 3Q15, the company has worked closely with local distributors to further penetrate general trade (GT), successfully raising GT’s revenues contribution to 54.9% in 2016 from only 40.8% in 2015.

Wet paddy processing: paving the way for better margins. At the end of Dec 2016, HOKI had total installed production capacity of 302,400tons/year with a utilization rate of almost 80%. Starting mid-2016, the company added a new facility to process the wet paddy. In so doing, BPS was able to cut the supply chain which led to quality improvements in its rice milling. This should help to boost the gross margin by 2%. At present, the supply of rice from its wet paddy facility is approximately 30% of the total sales volume. In the coming years, the company plans to develop new production facilities including both wet paddy processing and rice milling (exhibit 2).

HOKI trades at FY17F PE of 9.9x. The company made its 1Q17 unaudited result available at the meeting. The 1Q17 top line reached Rp347.6bn (+72% yoy) with an improved gross margin of 16.3% (FY16: 14.7%) and bottom line of Rp26.2bn (+94% yoy). For 2017, the company is providing guidance of FY17 revenues and net profits of Rp1.3tn (+13% yoy) and Rp92bn (+110% yoy), respectively. Using fully diluted EPS from the company’s FY17 earnings guidance, the company is trading at FY17F PE of 9.9x, slightly above that of its main peer in the rice business (AISA: FY17F PE of 8.5x).

… read more 20170726 HOKI


Danareksa Equity Snapshot - 26 Juli 2017
July 26, 2017 09:26 WIB

FROM EQUITY RESEARCH

Buyung Poetera Sembada:  Better margins in store

(HOKI IJ. IDR 374. Non Rated)

Buyung Poetra Sembada (BPS) is upbeat on its growth prospect, on the back of greater distribution network to general trades as well as the expectation to see the full-year impact of its wet paddy processing, which should translate to improve gross margin this year. At current price, the stock is trading at FY17F PE of 9.9x, based on the management’s guidance of 110% yoy earnings growth.

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MARKET NEWS

Sector

  • Retail: Jakarta’s brick-and-mortar stores face stiff challenges

Corporate

  • AISA: Lowered its FY17 revenues growth estimate to 8%
  • Bank Mandiri: to issue global bond
  • PP Properti: prepares IDR10tn capex up to 2021

TECHNICAL ANALYSIS CORNER

Market Maker

  • JCI Index. 5,813. POSITIVE. Target 5,825

Stock Shoot

 

  • ASII IJ. IDR8,100. BUY. TP IDR8,680
  • CPIN IJ. IDR3,040. BUY. TP IDR3,250
  • JPFA IJ. IDR1,200. BUY. TP IDR1,430

To see the full version of our technical analysis corner, please click here


Danareksa Equity Snapshot - BMRI 25 Juli 2017
July 25, 2017 09:28 WIB

Bank Mandiri: Forecast adjustments

(BMRI IJ. Rp13,225. HOLD. TP Rp11,800)

  • We adjust our FY17-18F forecasts after incorporating the 1H16 result.  We make adjustments to our assumptions on Net-interest income, Operating Expenses and deposit growth.
  • We raise our FY17F Net-interest Income by 8.5% estimate as BMRI has been able to book higher than ours in Cash Recovery and slightly higher loan related fees.
  • We lower by 2.5% FY17F Operating Expenses mainly on G&A expenses.
  • We made minor adjustment on corporate loan segment lending rate for FY18-19F
  • We lower deposit growth assumption to maintain around 85% LDR in FY18-19F.
  • We maintain our HOLD recommendation on the stock and maintain our TP at Rp11,800, implying 1.6x PB 1H17F (ROE=17%, G=9.5% and Ke=14.1%) as we rolled over our valuation base to mid-2018. The stock is currently trading at 1.7x 1H17 PB, higher than its fair value.

… read more 20170725 BMRI