Live Chat Software
Berita Dan Riset Terbaru
Company Research
Danareksa Equity Snapshot - SMGR, 14 Februari 2020
February 14, 2020 09:56

Semen Indonesia

Supported by solid export sales

SMGR booked cement sales volume in Jan 20 of 3.36mn tons, or +34.5%yoy on the back of consolidation with SBI but -14.6%mom due to the extreme weather in Indonesia which caused floods in many areas. Domestic cement sales were down 6.2%yoy while exports jumped by 30.1%yoy. SMGR’s domestic sales amounted to 55% of the national cement consumption. Its Jan 2020 sales are in-line with our forecast as they are 7.8% of our FY target.

Strong yearly sales growth thanks to consolidation with SBI. Semen Indonesia Group (SMGR) sold 3.36mn tons of cement in Jan 20. This includes sales of SBI and TLCC. The sales grew by +34.5%yoy thanks to consolidation with SBI. The SBI sales have been consolidated since Feb 19. However, on a monthly basis, the sales were down by 14.6%mom due to soft domestic sales and weak sales from TLCC. Sales from TLCC contributed ~5% of the group’s sales.

Soft sales in the domestic market due to the bad weather. In the domestic market, the group sold 2.86mn tons of cement in Jan 20, accounting for 55.1% of the domestic consumption. This figure is -6.2%yoy and -17.6%mom which, we believe, reflects the impact of extreme weather and heavy rainfall that caused flooding in many areas in Jan 2020. SMGR recorded strong export performance, by comparison. Exports in Jan 20 reached 0.32mn tons, or up by 30.1%yoy and 47.2%mom.

SMGR’s Jan sales are in-line with our expectation. Historically, SMGR’s sales in 1Q are 33% of the full year figure, with sales in Jan reaching 21.4% of the 1Q result and 7.1% of the full year number. The sales in Jan 20 are 7.8% of our FY target of 43.0mn tons (+1%yoy). We expect normalizing and drier weather in the coming months to support cement sales.

The bad weather hit sector sales in Jan 20. Domestic cement consumption in Jan 20 reached 5.20mn tons, or -7.5%yoy and -20.5%mom hit by extreme weather. Based on sales area, only Eastern Indonesia booked positive yearly growth of +25.5%yoy, while other regions booked negative growth. However, consumption in Eastern Indonesia accounted for only 4% of the domestic market. By contrast, sales in Java, the biggest market, dropped by 9.6%yoy, while Sumatra sales were down by 10.5%yoy. Both areas contributed ~75% of the market turnover.

Maintain BUY. SMGR is traded at EV/ton of USD129, below its historical avg. of USD138. SMGR’s EV/ton is also lower than INTP’s USD147, but higher than SBI’s USD79.

… read more 20200214 SMGR