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Danareksa Equity Snapshot - 10 Oktober 2019
October 10, 2019 10:04



Semen Indonesia:  New branding to reduce costs (SMGR.IJ IDR. 11,350 BUY TP IDR. 17,400)

SBI no longer uses the Holcim brand as its trademark as it was replaced by Dynamix in Sep19. However, SBI had previously signed a USD50.0mn fee agreement to use the brand until the end of Jan2020. Thus, we expect royalty cost savings of 7% to only kick in as of Feb2020. We expect SMIG’s cement sales to grow by 24.7%yoy in FY19 supported by the consolidation with SBI, while we expect 4%yoy growth for domestic sales in 2020. We assume 1.2%yoy and 3.0%yoy ASP growth in 2019 and 2020. We roll over our DCF to arrive at a new TP of IDR17,400. Maintain BUY.

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Electricity: Government plans to include the coal price in the formula for electricity tariffs adjustment in 2020

The government plans to include the coal price in the formula for electricity tariffs adjustment in 2020 as coal-based power plants account for about 48% of the total power plants capacity. Currently the formula for non-subsidy electricity tariffs - which are adjusted every three months and only applicable for non-subsidy customers - is derived from the Indonesia oil price (ICP), the IDR forex rate and inflation. (Source: Investor Daily)


Property: Bahasa Indonesia must be used in property project names

According to President Regulation no. 63/2019, property projects such as residential property, buildings, offices, apartments, and trade centers that are owned by Indonesian citizens or Indonesian companies should use Bahasa Indonesia as the project name unless the building has historical, cultural, or religious value.


Retail Sector: Retail sales under pressure in 3Q19

Bank Indonesia’s Retail Sales Index depicted mere 1.1% yoy growth or slower than Jul19’s figure of 2.4% yoy. The slowdown is driven by F&B plus tobacco for which the growth only reached 0.3% compared to 2.7% yoy in Jul19. The estimate for the September figure is only 2.1% yoy, which brings the 3Q19 growth to 1.8% yoy, or lower than 4.2%yoy in 2Q19 and 4.6% yoy in 3Q18. The sluggishness reflects the general slowdown in the global economy. (Source Kontan)



MNC Vision Networks (IPTV IJ): talks about potential synergies of a combined company

The MNC group seems increasingly keen on acquiring LINK. Pak Harry Tanoe openly discussed this on 9/10/19 at the analyst meeting on LINK by outlining operational and financial synergies. Among others, he pinpointed additional revenues coming from FTA and MNC channels, the MNC library and its original production as well as advertising sales. The founder also expects additional revenues from the relocation of overlapping network. There are also potential new revenues from OTT SVOD/AVOD type models. Moreover, MVN expects to initially save costs on a combined company amounting to 1% to 3%. Gradual OPEX reduction will come from marketing and bandwidth costs.  The combined company would potentially have ~4mn home passes. Additional strategic action would be to monetize with the sale/leaseback of the network to infra providers.  For new areas, IPTV will lease network from third parties to reduce future capex/OPEX. (MVN analyst meeting)


Waskita Beton Precast: To issue IDR1.5tn of bonds with a BBB+ rating

Waskita Beton Precast (WSBP) will issue IDR1.5tn of bonds with a 9.75% coupon rate for loan reprofiling and business preparation next year. This bond is rated by Fitch ratings agency with a BBB+ grade. The loans reprofiling is aimed at matching working capital with multiyear projects. The company also needs working capital for projects in Plant Penajam, East Kalimantan with capacity of 250,000 tonnes/year with 70% completion this year. (Bisnis Indonesia)

Jasa Marga: Jakarta-Cikampek II elevated toll road to start commercial operation in 2020