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Danareksa Equity Snapshot - 14 Agustus 2019
August 14, 2019 09:33

FROM EQUITY RESEARCH

Surya Citra Media: Earnings forecast cut to reflect higher costs (SCMA.IJ IDR.1,230 BUY TP IDR.1,900)

We roll over our valuation and lower our 2020F earnings growth forecast to 11.3%yoy from 13.2%yoy. We make adjustments for possible additional content costs and operational costs in relation to new business in 2019. We also take into account the attempt of KPI (the Indonesia Broadcasting Commission) to intervene in digital media although we see only a minimal impact on SCMA’s digital content given it is in compliance with the current regulations. All in all, we remain positive with the solid performance of each channel depicted in steadily rising audience share and its digital content sold to Netflix. Nonetheless, we cut our target price from IDR 2,350 to IDR 1,900 with WACC of 12.2%.

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MARKET NEWS

MACROECONOMY

Government: Regional bonds to be issued next year

The Ministry of Home Affairs has signed some permits to allow some provinces in Indonesia to issue regional bonds. Some of them will be issued in 2020 and others will be issued after regional elections. Most of the regional bonds will be used to finance infrastructure development. The requirements to issue regional bonds have been released by the related authorities. (Bisnis Indonesia)

 

SECTOR

Telcos: ARPU increases as users shift to larger data packages

The average revenues per user (ARPU) of the major telco companies has increased recently as users shift to larger data packages. Telekomunikasi Selular (TSEL) recorded the highest ARPU of IDR47,000 in 2Q19, followed by XL Axiata (EXCL) at IDR34,000 and Indosat (ISAT) at IDR26,900. ISAT stated that the increasing ARPU is underpinned by more simple data packages with higher data quotas as well as improvements in national 4G connectivity. According to EXCL, the increasing ARPU was being driven by higher data traffic and 86% penetration of XL Axiata smartphone users nationwide. (Bisnis Indonesia)

 

CORPORATE

KLBF will develop a new factory in Myanmar

Kalbe Farma will develop a new factory in Myanmar involving a total investment of IDR300bn, expected for completion in 2021. Vidjongtius, the President Director of Kalbe Farma, stated that Mixagrip  currently held the largest market share in Myanmar. The new factory in Myanmar will produce OTC and prescription products. (Investor Daily)