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BRI Danareksa Equity Snapshot - 26 Februari 2021
February 26, 2021 09:21

Astra International:  Soft earnings – but within expectations (ASII IJ. IDR 5,575 BUY. TP IDR 7,800)
Astra International (ASII) reported net profits (excl. gains on the divestment of BNLI) in 2020 of IDR10.3tn (-52.6% yoy) with quarterly earnings of IDR2.1tn (-20.1% qoq, -63.6% yoy) in 4Q20. Including gains on the divestment of BNLI, the net profits were down by 25.5% yoy to IDR16.2tn in 2020. The net profits excl. gains are within our expectations (101%). Maintain BUY with a TP of IDR7,800 (based on SOTP valuation).
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Indo Tambangraya: Upside Emerges (ITMG IJ. IDR 12,100 BUY. TP IDR 14,500)
At the recent meeting, Indo Tambangraya Megah (ITMG) expressed its cautiously optimistic view on coal prices in 2021 with the expectation of coal production of 17.7 – 19.9mn tons and a lower SR of 9.7x (2020: 10.1x). As such, we foresee solid coal prices and stable coal production that should give a boost to earnings in 2021. Upgrade to BUY as the recent share price correction provides more upside to our new TP of IDR14,500 (DCF valuation).
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United Tractors: 4Q20: Weak earnings (UNTR IJ. IDR 23,650 BUY. TP IDR 33,000)
United Tractors (UNTR) reported net profits of IDR665bn in 4Q20 (-47.9% qoq, -75.1% yoy). The weak coal prices arising from the impact of the Covid-19 pandemic pushed down the net profits by 46.9% yoy to IDR6.0tn in 2020 with most divisions reporting lower earnings. The result is below our expectation (81%) and consensus estimates (85%). Maintain BUY with a TP of IDR33,000 (DCF valuation).
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BTPN (BTPN IJ, HOLD, TP IDR3,200): Below the forecast due to a contraction in loans book
•              FY20’s net profit dropped by 32.0%yoy to IDR1.7tn are below our forecast. This is mainly driven by c.40bps dipped in NIM to 4.4%, a 3.9% compression in yoy loans growth, and a  higher credit costs of 202bps.
•              Restructured loans of IDR7.4tn (5.5% of loans book as of Dec-20), should be mostly coming from its sharia subsidiary (BTPS IJ, BUY, TP IDR4,200). While gross NPLs ratio uptick to 1.2% by Dec-20 from 0.8% in Dec-19 with 202bps credit costs.
•              NIM can be maintained to only dipped by c.40bps 4.4% mainly owing to a significant declined in CoF amid aggressive policy rate cut by BI in 2020. CoF dropped by c.300bps to 4.0% based on our calculation due also to a higher contribution from CASA deposits of 27.5% to total customer deposits as of Dec-20 (Dec-19: 24.3%).

MNC Vision Networks - (IPTV IJ, non-rated) SPAC to absorbVision+ (OTT) and MNC Play (Fixed Bb)
•    According to Bloomberg disclosure, MNC Vision Networks Tbk is in talks to spin-off its units a) Vision+ (OTT dubbed Netflix of Indonesia) and b) MNC Play (fixed Broadband + Pay TV unit), its streaming television business
•    The blank-check company (SPAC) Malacca Straits Acquisition Co. is said to acquire those assets. In return MVN will own stake at a merged entity with SPAC Malacca into what appears to be a non-cash transaction.
•    The Malacca Straits SPAC, led by CEO Kenneth Ng, counts pan-Asia special situations investor Argyle Street Management Ltd. as its co-sponsor. It raised $144 million in a July initial public offering and said it’d focus its search for a target in Southeast Asia.
•    Malacca Straits has begun discussions with investors including Ray Zage’s Tiga Investments as it seeks to raise $50 million or more in new equity to support a transaction that’s set to give the combined company an enterprise value of around US$600mn.
Short Comment: Current market cap of MVN is at USD890mn, and the expected Enterprise value of the merged company is expected at USD600mn, therefore we expected MVN to own majority of the SPAC, and the spin-off units will enjoy the new liquidity coming from SPAC to strengthen business efforts in fixed BB and paid TV.  We also assume this deal does not include the satellite business and spectrum licenses run by MVN subsidiaries.

Vale Indonesia (INCO IJ.BUY): Below expectation
•              4Q20: soft earnings of USD6.2mn (-73.7% qoq, -89.2% yoy) due to a) lower sales volume (-18.4% qoq) following planned maintenance activities in 4Q20, and b) higher tax rate of 78% in 4Q20 (3Q20: 26.9%). Higher nickel prices (+12.6% qoq) helped to cushion further decline in earnings.
•              2020 better earnings of USD82.8mn (+44.3% yoy) driven by a) higher nickel sales volume, b) lower COGS per ton by 4.7% yoy helped by low energy price environment and c) lower tax rate of 20.9% in 2020 (2019: 35.6%). -While operationally was within expectation, net profit below our estimates (90% – due to higher than expected on tax rate), and consensus (81%)

Govt secures 2 million doses of Sinopharm Vaccines in next month
The Coordinating Ministry for Maritime and Investments announced that the self-pay vaccination program (vaksinasi gotong royong) will be provided by Sinopharm (China). The government has ordered up to 15 to 30 million doses to be delivered by July 2021. The first 2 million orders will be delivered in March, and the rest will be delivered gradually from April to July. Aside from Sinopharm, the government is also looking into ordering more vaccines from Johnson & Johnson. Thus, the government aims to have 70% of the population to be vaccinated by December 2021 or by the latest February 2022. (Investor Daily)

Comment: 15-30 million doses of vaccines from Sinopharm for self-pay vaccination program might cover at least half of the target from the govt (20-30 million people, @2 doses). The latest result of its efficacy rate is about 79%, and the price may be around $44/dose or nearly IDR600k/dose. Yet the price of Johnson and Johnson is about $9.3/dose, cheaper than Sinopharm’s, while the efficacy rate result is still waiting. (Muhammad Naufal)