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Danareksa Equity Snapshot - 12 February 2019
February 12, 2019 09:46

FROM EQUITY RESEARCH

Plantation: Jan 19 Inventory: First Signs of a Decline (Overweight)

Malaysia’s palm oil inventory fell to 3.00mn tons in Jan 19 (+17.8% YoY, -6.7% MoM), below consensus estimates of 3.03mn tons, mostly due to higher-than-expected exports. We expect short-term support from the ongoing low crop season while slower supply growth, higher demand from the B20 mandate and higher exports to India and China will be key drivers in keeping the CPO price firm in the longer-term. Maintain OVERWEIGHT.

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Adaro Energy:  Coal production target maintained for 2019 (ADRO IJ. IDR 1,260 BUY.TP IDR 2,000 )

Adaro Energy (ADRO) reported coal production of 15.1mn tons in 4Q18 (+0.9% qoq, +21.2% yoy), translating into cumulative coal production of 54.0mn tons in 2018. For 2019, the company has provided guidance for flat growth in coal production at 54 – 56mn tons with operational EBITDA expected to reach USD1.0 – 1.2bn. The coal production and EBITDA are broadly inline with our assumptions. Maintain BUY.

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Buyung Poetra Sembada:  Room for Growth (Not Rated)

HOKI has reported steady quarterly sales following the implementation of HET (minimum retail selling prices).Also encouragingly, the gross and operating margins showed an improvement thanks to easing competition and less opex spending on marketing/promotions. Additional capacity and a new partnership with Alfa should help to drive growth this year.

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MARKET NEWS

 

MACROECONOMY

Bank Indonesia: Real sales index grew by 7.7%yoy in December 2018

Bank Indonesia (BI) reported that real sales index (RSI) grew by 7.7%yoy, higher compared to previous month (3.4%yoy) and last year (2.9%yoy). This increase was supported by sales improvement in tobacco, food and beverage, that grew by 9.1%yoy and entertainment and cultural goods (14.4%yoy).  Based on the result, BI sees that RSI growth in January 2019 may reach 4.8%yoy which mainly driven by fuel, cultural goods and entertainment, and clothing. (Kontan)

 

SECTOR

Pharmaceutical: KAEF and KLBF target higher exports in 2019

Kimia Farma (KAEF) and Kalbe Farma (KLBF) will push exports this year. In 2019, KAEF targets exports of IDR350bn (FY18: less than IDR300bn), which will be supported by additional outlets in the Middle East and also expansion into South East Asia. Meanwhile, KLBF targets FY19 exports of IDR1.2tn, higher than FY18’s IDR1tn or around 6% of total revenues. (Bisnis Indonesia)

 

Toll Roads: 15 toll roads will see tariff adjustments in 2019

According to the Indonesian Toll Road Authority (BPJT), there are 15 toll roads in Indonesia which will have tariff adjustments this year. The tariff adjustments for toll roads occur every two years based on UU no.38/2004 on toll roads. The toll roads are: Makassar Section IV, Gempol – Pandaan, Cikampek – Palimanan (Cipali), Bali Mandara, Jakarta Inner Urban Toll (JIUT), Surabaya – Gempol, Palimanan – Plumbon – Kanci (Palikanci), Belawan – Medan – Tanjung Morawa, Serpong – Pondok Aren, Tangerang – Merak, Ujung Pandang Tahap I and II, Jakarta – Tangerang, Jakarta – Bogor – Ciawi (Jagoraw), Padalarang – Cielunyi (Padaleunyi), and Cikampek – Puwarkarta – Padalarang (Cipularang). (Bisnis Indonesia)

 

Comment: For these toll roads, 11 of them are owned by JSMR. Furthermore, JSMR has received approval from BPJT to increase tariffs on the Soekarno Hatta Airport toll road by IDR500/car to IDR7,500/car or up by 7.1%. The new tariff for the Soekarno Hatta Airport toll road will be implemented starting on 14 Feb 19. Around 80% of JSMR’s revenues come from toll roads whose tariffs are adjusted in odd years. (Maria Renata)

 

CORPORATE

Adhi Karya: Booked IDR892bn of new contracts in 1M19

Adhi Karya (ADHI) booked ID891.8bn of new contracts in Jan19. The 1M19 new contracts accounted for ~2.54% of the full year target which set at IDR35.0tn. The major contract was coming from the development of power plant PLTA Asahaan of which ADHI forms a JO with Shimizu with a contract value of IDR808.4bn. (Bisnis Indonesia)

 

BSDE FY18 Marketing Sales Achievement and Target

Bumi Serpong Damai (BSDE) booked marketing sales of IDR 6.2 trillion in FY18, achieving 86% of its FY18 target of IDR 7.2 trillion. BSD City continue to be the major contributor (54%) to BSDE`s marketing sales. The four high rise residential combined, was only able to contribute c.13% of FY18 marketing sales figure. Almost all of its self-own projects marketing sales performance were under target while its two JV projects in BSD City (Nava Park and The Zora) were able to beat its target.

 

BSDE is targeting a marketing sales of IDR 6.2 trillion (flat y-o-y) with BSD City expected to contribute half of the target. Around 56% of marketing sales is targeted from residential segment, similar to FY18 marketing sales achievement. BSDE is targeting a marketing sales of IDR 200 billion the launch of Aerium, a high rise residential located in West Jakarta area.

Management expect Cibubur land value to catch up with Serpong`s on the back of infrastructure developments. Capital expenditure for land acquisition will be focused on Cibubur area in the next 2-3 year. (Company)

 

Comment: The underperformed of self-own projects and outperformed of JV project might put BSDE earnings under pressure. A weakness in high rise residential demand can be seen from the lack of sales from its existing project.

Although the FY19 marketing sales target of IDR 6.2 trillion seems conservative, we see some downside risk to it coming in from the high contribution from its high rise residential, which we believe is still harder to sell. BSDE is targeting 18% of its FY19 marketing sales from high rise residential, up from c.13% in FY18. (Victor Stefano)

 

SMRA 1M19 Marketing Sales Achievement

Summarecon Agung (SMRA) booked marketing sales of IDR 456 billion in Jan-19 which forms 11% of its FY19F marketing sales target of IDR 4 trillion. Serpong contribute 56% (IDR 255 billion) of Jan-19 achievement from the launch of North Goldfinch and recurring sales of Rosini and Mozart. Makassar first launch hype is still in effect with the IDR 67 billion marketing sales booked in Jan-19 compared to IDR 160 billion in Dec-18. (Company)

 

Semen Indonesia: Will boost profitability of SMCB

Semen Indonesia (SMGR) plans to apply quick win strategy in its new subsidiary, Solusi Bangun Indonesia (SMCB), to boost its profitability. SMCB booked net loss since 2016. In 2016 SMCB’s net loss reached IDR284.6bn and getting worse in 2017 to IDR758.0bn, while in 9M18 net loss reached IDR630.4bn. The strategy involve synergy within supply chain and lower raw materials price as SMCB is a member of Semen Indonesia Group. SMGR is on the preparation to conduct a tender offer to SMCB’s minority shareholders, while it still waiting approval from the OJK.

 

Furthermore, in the EGM held by SMCB yesterday, the company has officially changed its name from Holcim Indonesia into Solusi Bangun Indonesia. Hence, two subsidiaries of SMCB also changed its name: 1) Holcim Beton become Solusi Bangunan Beton (SBB), and 2) Lafarge Cement Indonesia into Solusi Bangunan Andalas (SBA). (Bisnis Indonesia)