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Danareksa Equity Snapshot - 14 Desember 2018
December 14, 2018 09:26 WIB

FROM EQUITY RESEARCH

 

To see the full version of our snapshot, please click here

 

MARKET NEWS

SECTOR

Tax office upbeat on tax collection in 2018

The tax office has expressed optimism in reaching its tax revenues target for this year despite lower-than-expected realization as of November and is confident about posting strong performance in 2019. The Finance Ministry’s Director General Robert Pakpahan recently said that the tax office projected tax revenues for 2018 to reach IDR1.35quadrillion, 94.87% of the 2018 state budget, which is lower than the budget target of IDR1.42quadrillion. However, as of November, the tax authority only recorded IDR1.14quadrillion of tax revenues. (Jakarta Post)

 

Distribution of the Special Allocation Fund is being accelerated

The government is accelerating the distribution of the Special Allocation Fund (DAK) that includes regional transfers and village funds. As of Dec 3, 2018, the absorption of DAK reached IDR 48tn or 78.5% of the full year budget with 492 areas which have not received DAK. DAK can be distributed if the documentation and report from the regional government shows progress in specific areas. The central government is currently issuing an appeal memo to regional governments to push for more progress. (Bisnis Indonesia)

 

CORPORATE

Alibaba rumored to be interested in buying industrial land from DMAS

According to the local news, DMAS is rumored to have received inquiries from 2 big buyers each inquiring for 30-40Ha of industrial land. One buyer is rumored to be Alibaba while the other is a large automotive company. (Kontan)

 

Comment:  Based on our checks, DMAS has confirmed such inquiries, but even if this is the case, they are unlikely to be booked as marketing sales in FY18. If they materialize, the transactions would likely be booked in FY19’s marketing sales. Also, the amount of the land is still subject to change. Meanwhile, DMAS has managed to book 8 Ha of industrial land sales in 4Q18, resulting in YTD land sales of 33Ha. (Yudha)

 

EXCL partners with Indian content aggregator for “XL Home”

XL Axiata has partnered with EROS Eros that has a library of over 11,000 films, original shows, television programs, music videos and on demand services. This will help XL Axiata to offer an attractive home entertainment option with its XL Home services in fixed home broadband. Eros Now specializes in Indian content worldwide and is listed on the NYSE. With this collaboration, Eros Now will be able to expand its reach to a larger consumer base in Indonesia which will be able to enjoy their favorite Indian entertainment content on XL Home. XL Axiata has recently launched XL Home, a home broadband entertainment service. It targets 500,000 home passes in 2019 according to the press. (business wire)

 

PP Presisi: Targets revenues growth of 33%yoy in 2019

PP Presisi (PPRE) targets revenues growth of 29-33% in 2019 to IDR4.0-4.5tn from IDR3.0-3.5tn targeted in 2018. This growth should be supported by IDR5.5-6.0tn of new contracts targeted in 2019. The capex allocated for 2019 is IDR1.0-1.5tn of which 70% will be used to acquire heavy equipment and 30% to support inorganic growth. PPRE plans to acquire a company engaged in soil improvement and foundations. PPRE has cut its new contracts target to IDR5.0tn from IDR7.0-7.5tn set at the beginning of the year. (Bisnis Indonesia)

 


Danareksa Equity Snapshot - BJTM, 13 Desember 2018
December 13, 2018 09:52 WIB

BPD Jatim(BJTM IJ)

A sound dividend play

 

We maintain our BUY call on BJTM with a higher GGM-derived TP of IDR850 (implying 1.4x 2019F P/BV) as we roll over the valuation to next year. We like the bank for its strong foothold in East Java’s civil servants salary-based lending segment with a lower risk weight. CAR will remain high at 24.2% with 9.3% loans growth expected next year. Yet, NIM is expected to dip to 7.6% on the back of lower asset yields coming from lower rates on salary-based loans. The dividend payout ratio will remain enticing, however, especially in view of its status as a regional bank and its ample capital. We assume a 55% payout ratio, resulting to a 7.2% dividend yield next year.

 

Consumer lending will continue to be the driver. While salary-based loans will continue to account for most of BJTM’s loans, the bank can also leverage its strong customer-base covering regional civil servants to boost its mortgage lending. On the other hand, commercial lending may only be driven by the syndicated loans scheme (along with other big SOE banks) for certain infrastructure projects such as the toll roads. Next year, we estimate 10.4% yoy growth in consumer loans, thus pushing up the contribution from consumer loans to total loans to 71.6% by December 2019F.

 

Lower projected NIM. Amid tight competition in salary-based lending, BJTM recently cut its lending rate in this segment by 200bps to 11-12%. Yet, we still expect the bank’s funding structure to remain secure thanks to strong support from the local government, both institutional and retail customer-based. Taking these factors into account, we project a NIM compression to 7.6% given a lower assets yield of 11.2% in 2019.

 

Good dividend yield. Given its status as a regional bank, we believe that BJTM will maintain its attractive dividend payout ratio. Additionally, with estimated loans growth of 9.3%, CAR will remain high at 24.2% by the end of next year. Note that historically, the dividend payout ratio has ranged from 52% to 73.5% in the past five years. As such, with the expectation of a 55% payout ratio over the next three years, the dividend yield looks attractive within our banking universe at 7.2% for next year.

 

BUY with a new TP of IDR850. We maintain our BUY call on BJTM with a GGM-derived TP of IDR850 assuming 11.3% CoE, 14.7% sustainable ROAE and 3% long-term growth. Our TP implies 1.4x 2018F P/BV. The main downside risks are political risks in relation to its shareholders (regional governments), lower-than-expected loans growth, higher-than-expected blended CoF and slower progress on improving its assets quality.

 

 

… read more 20181213 BJTM


Danareksa Equity Snapshot - SIDO, 13 Desember 2018
December 13, 2018 09:48 WIB

Sido Muncul (SIDO IJ)

Healthy growth ahead

 

Sido Muncul is on track to book solid earnings growth in FY18-20F given: (1) additional production capacity and (2) the full commercialization of its expanded extraction plant which will support higher margins. The plan to improve distribution and penetrate export markets will also drive growth. Maintain BUY with a TP of IDR1,000.

 

Strong 11M18 sales; on track to achieve 9.2% yoy FY18F revenues growth. In a recent conversation with the company we learnt that the new factory in Semarang - which will provide additional capacity of 100mn sachets/month - is on track to commence operations by the end of 2018. This will raise the total capacity to around 180mn sachets/month. In addition, the company also reported strong sales in November 2018 in line with the 4Q18 seasonality. As such, we remain confident that SIDO is on track to meet our FY18F revenues growth estimate of 9.2% yoy.

 

Solid earnings growth forecast in FY19F of 18%. We estimate revenues growth of 14.9% yoy in 2019, supported by the additional capacity and the continued improvement in SIDO’s sales force with a greater focus on Modern Trade (around 90% of revenues are still from General Trade). The soft oil price and full commercialization of its expanded extraction plant will improve the gross margin to 52%. Combined with manageable opex, we estimate FY19F earnings of IDR 805bn, +18.3% yoy.

 

Maintain BUY.  In November 2018, the company already started to supply more goods to Philippines’ modern trade (MT) channel. Going forward, product availability should increase in 2019 with a more extensive MT network. Combined with the improvement in the national distribution system, the way should be paved for the company to record higher growth ahead. We estimate FY18-20F earnings CAGR of 19.6% with additional capacity supporting sales in the coming years. We view favorably the company’s shift from its F&B product Kuku Bima to its herbal product Tolak Angin, noting the latter’s higher margins which should underpin earnings growth going forward. At the current share price, SIDO is trading at FY19F PE of 14.8x. Maintain BUY with TP IDR1,000 (FY19F PE of 18.5x).

 

… read more 20181213 SIDO