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Vale Indonesia (INCO.IJ IDR 6,250 BUY.TP: IDR 7,600J )
September 29, 2022 09:25 WIB

Clearer outlook for HPAL projects


INCO received FID for its HPAL project and expect the facility will complete in 2025. Mining activity for this project will begin next year and expect will begin operational in 2025. Reiterate our Buy call on INCO with a higher TP of IDR7,600.


Expect margins compression in 2H22, but... Vale Indonesia plan to maintain their nickel matte production volume at 65k tons in 2022F, although up to 1H22, the company’s production was at 26,394 tons, which was still 41% of full year target. As a result, we expect the company will ramp up their operation in 2H22. We believe the company’s peak production growth In 2022F would be during 3Q22 and we expect INCO will produce of around 21k tons and another ~17k tons in 4Q22.


With FY22 production target remain intact, we leave our 2022F earnings forecast unchanged and we also expect that nickel price will continue to decline in following quarters with building up surplus from additional nickel smelter capacity of around 180k tons this year. And thus, we will see a margins compression on INCO’s P&L in 2H22. 


…Positive progress on HPAL project in Pomalaa, and... INCO already signed memorandum of cooperation agreement to develop an HPAL processing facility in Pomalaa with capacity up to 120k tons of MHP. INCO partnering with Huayou and Ford to develop this project. Currently, the company try to finalize the feasibility study to improve capacity for both mine and HPAL facility. Also, INCO targets they could secure definitive agreement by October 2022. Mining operation will begin next year to secure ore required for HPAL.


…another HPAL smelter in Soroako. INCO was also enter an agreement with the same partner in Pomalaa, Huayou, to develop HPAL smelter in Sorowako. The feasibility of this project already began since the beginning of this year. This HPAL plat will also process limonite into MHP with capacity of 60k tons. We believe INCO will disclose the detail timeline of this project early next year.

Maintain Buy with Higher TP of IDR7,600. We try to take into account HPAL Pomalaa that will effectively operational in 2025 to our valuation and this brings our TP upgraded to IDR7,600. We still not factored in another HPAL smelter in Soroako and once this project come into FID stage this could be another upside potential to INCO’s valuation.


… Read More 20220929 INCO

BRI Danareksa Sekuritas Equity Snapshot - September 29,2022
September 29, 2022 09:24 WIB



Vale Indonesia: Clearer outlook for HPAL projects  (INCO.IJ IDR 6,250 BUY.TP IDR 7,600)

INCO received FID for its HPAL project and expect the facility will complete in 2025. Mining activity for this project will begin next year and expect will begin operational in 2025. Reiterate our Buy call on INCO with a higher TP of IDR7,600.

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Ferry Transport Fares to be Increased by 11% Starting October

Ministry of Transportation are increasing the inter-province crossing tariff of economy class on ferry-boat transportation mode by around 11%, starting 1 October this year. Following the increase in subsidized fuel price, the Ministry are adjusting to the needs of industry by tariff-hike, with application to be done in 23 commercial crossing area across Indonesia. Examples on increase in tariff will be: Merak-Bakauheni passenger’s rate (prev. IDR 14,4k increased to IDR16,5k (+14.5%)), Ketapang-Gilimanuk (prev. IDR 4,5k increased to IDR 5,4k (+21%)). (Bisnis)



BMRI Reviewing Options on Corporate Action for Its Digital Banking Services

BMRI is reviewing the possibility of taking corporate actions to strengthen its digital banking services. There are 2 options being studied. (1) Opportunity to separate or spin off the Livin superapps application into a stand-alone digital bank service. (2) BMRI to conduct acquisitions to enter digital banks. According to BMRI, with the company's capital adequacy ratio above 19%, it is very possible to take corporate action with mergers and acquisitions. But it will still be calculated which option is the most optimal. (Kontan)


LINK Received Loan worth IDR 1.5 tn

LINK received sharia financing worth IDR 1.5 tn with 5-year tenure from BNLI. According to LINK, this transaction was aimed to support the financing of its working capital and business activities, also deemed to not having either conflict of interests and negative impact to the its financial condition. (Kontan)


XL Axiata – Huawei, Apply the Latest Technology to Expand Network Capacity

PT XL Axiata Tbk collaborated with Huawei to implement the latest FDD Smart 8T8R technology to improve network quality and capacity. Currently, XL Axiata has implemented the FDD Smart 8T8R network in more than 700 4G BTS in various regions in Indonesia. The results of a series of trials that have been carried out show an increase in network quality and capacity up to 2.9x. The application of this technology also implements green ICT principle.


According to EXCL, this FDD Smart 8T8R Technology, in addition to increasing spectrum efficiency to achieve an increase in user throughput of up to 2.0x over 4T4R technology, can also help reduce power consumption by up to 26% and increase spectrum efficiency on the network, thereby helping to reduce network operational burdens. (Company)


VOLTA Introducing New EV Series and Motor Ownership Program

Volta, a subsidiary of NFCX-MCAS Group, attended the Indonesia Electric Motor Show (IEMS) 2022 exhibition, which took place on 28-30 September 2022 at the Jakarta Convention Center. Volta presents variants of its superior electric motorcycle models, including the flagship Volta 401 and the models in collaboration with Bumilangit, namely the 'Virgo and the Sparklings' series and the new series, 'Mandala.' At IEMS 2022, visitors can buy Volta motorbikes with attractive ownership installment programs from various Banks and Multifinance.


Volta also introduced Volta Plus+, an electric motor ownership program that is more affordable and economical, starting from IDR 12,750,000* (OTR Jakarta). Volta Plus+ is also equipped with various advantages, including a lifetime battery warranty, free home charging, and operating costs that are more efficient than ordinary motorbikes with battery’s flat fee based on usage. (Company)

Jasa Marga (JSMR.IJ IDR 3,470 BUY.TP: IDR 5,400)
September 28, 2022 09:16 WIB

Inline result


JSMR 1H22 result is pretty much inline with our forecast and consensus. The company booked higher operating revenue due to the combination of tariff adjustment as well as improvement in traffic volume during Lebaran holiday. As such, we maintain our net FY22 earnings estimate. Maintain BUY.


1H22 highlight: Inline result. JSMR booked IDR735bn of revenue in 1H22, pretty much inline with our expectation (48%). This figure is extraordinarily higher vs 1H21 excluding gain on divestment which was only at IDR67bn. Operating revenue grew by 19.7% yoy in 2Q22 (+18% yoy in 1H22), which is derived from combination of toll tariff adjustment as well as high traffic growth mainly in Lebaran holiday. For 2Q22, the gross and operating profit grew by double digit, and the core profit turned into positive from IDR95bn loss in last year.


JSMR has done some tariff adjustments in this year: Inner City Toll Road (26 February), Surabaya-Mojokerto (19 March), and Bali Mandara (26 February). Next year, JSMR sees to make another tariff increase in Surabaya-Gempol toll road. As the result of tariff adjustment, we have seen the highest revenue growth from parent toll road comes from Cawang-Tomang-Cengkareng toll road which is part of Inner City Toll Road at 21.2% yoy. While on the subsidiary level, we also see significantly higher revenue growth from several new toll roads such as Balikpapan-Samarinda (+137%yoy), and Serpong-Cinere (+744%yoy). From our analysis, should we exclude the deconsolidated toll road as of 1H22, the toll revenue growth would reach 22% in 1H22 with 15% growth in traffic volume. These imply ~6% increase of effective tariff per vehicle as of 1H22.


Going forward strategy. As the consequence of recent policy rate hike, JSMR sees that there could be a manageable increase in the cost of debt, from currently at 6.5% to somewhere between 7%. JSMR targets to see 60% fixed rate loan next year, from currently ~40%, which it aims to negotiate the interest from its investment loan. JSMR also still maintain the plan for equity fundraising of its subsidiary (PT JTT) which has effectively managed the Transjawa toll road since spin-off. Initial scenario of the equity fundraising will be around 30% of stake divestment to the public and strategic investors.


… Read More 20220928 JSMR