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BRI Danareksa Sekuritas Equity Snapshot - September 27,2022
September 27, 2022 08:29

FROM EQUITY RESEARCH

 

MARKET NEWS

 

MACROECONOMY

Fuel Cash Assistance Stage II to be Disbursed At End of Year

The Ministry of Finance will disburse the stage II cash assistance for increasing fuel price at the end of this year, after previously disbursed the stage I at September 2022. The Stage I assistance, has disbursed to 20.6 mn. family-beneficiaries with total budget expensed at IDR 6.2 tn. Total budget allocated for the fuel cash assistance is at IDR 12.4 tn., with disbursement to be done twice at IDR300k each/family-beneficiaries. (Kontan)

Indonesia’s State Budget Recorded a Surplus of IDR 107 tn as of August 2022

The 2022 Indonesia’s State Budget (APBN) recorded a surplus of IDR 107.4 tn (Compared to Aug-21: deficit of IDR 383 tn) or 0.58% of GDP as of August. The APBN surplus record until August 2022 was higher than July at IDR 106.1 tn or 0.57% of GDP.

State revenue reached IDR 1,764.4 tn, growing 49.8% compared to the same period last year or equivalent to 50.3% of the target of IDR 2,266.2 tn. Meanwhile, state spending reached IDR 1,657 tn (+6.2%). Under conditions of improved performance, the state budget reduced debt financing by 46% to IDR 286.8 tn from IDR 531 tn. (Investor Daily)

SECTOR

July 2020 Gapki: Exports and Domestic consumption improved

CPO production reached 4.2mn tons (-2.1% yoy -6.2% mom) while exports of CPO inched down by -3.2%yoy and -2.8%mom in Jul20 to 656k tons, with refined product exports at 2.5mn tons (+10.5% yoy and +18.2% MoM). Domestic consumption stood at 1.4mn tons (-0.6% yoy and +7.3% MoM) driven by higher FAME absorption. The final stocks for Jul 20 reached 3.6mn tons (+2.9% YoY, -8.3%MoM). China and Middle East exports surged +43% MoM and 65% MoM, respectively, to 629k tons for China in Jul20 while Middle East exports reached 273k tons in Jul20. (GAPKI)

Cigarettes: 8M22 Cigarette Excise Tax Revenue +21.2% yoy

  • 8M22 tobacco excise tax revenue +21.17% yoy to IDR134.65tn, supported by higher excise tariff (weighted average +12% yoy)
  • MOF reported that 8M22 cigarette production down 3.3% yoy with improvement in August production (+7.3% yoy).
  • It is estimated to see lower cigarette production by 3% by end of 2022. This is in line with the government target to control cigarette consumption*. (MOF)

Poultry: Another NFA intervention to stabilize livebird price

Based on meeting with stakeholders in the poultry industry on 21 Sep 2022, 10 integrators including CPIN, JPFA, and MAIN, has signed MoU to collectively absorb 30 ton of livebird (LB) per day from farmer to help reduce oversupply in the market. According to NFA on 24 Sep, a total of 5.2k LB with total weight of 8.7 ton (1.7kg/LB) has been absorbed by CPIN and MAIN.

Comment:

  • This is a continuation of the previous NFA intervention to stabilize livebird prices where it assigned SOE as the absorber. This intervention is less beneficial to integrators as its blended LB cost will increase. There is detail on the price of LB to be absorbed but we believe it should be in the range of reference price which is set at IDR21-23k/kg.
  • However, the impact might be minimum to both market price and integrators profitability as the amount to absorbed is only account to 1.0-1.7% of the estimated Sep-Dec 2022 oversupply and it does not essentially reduce the supply to the market.
  • As comparison, to stabilize LB price on Jun-21, the culling program was to cut c. 10 million hatching egg 19-day per week and to absorb c. 5 million of livebird per week (equal to c. 1,200 ton/day).
  • We remain cautious with the outlook of LB price as the supply reduction is contradicting with the current world`s food security issue. (Victor, BRI-DS)

CORPORATE

July 2020 Gapki: Exports and Domestic consumption improved

CPO production reached 4.2mn tons (-2.1% yoy -6.2% mom) while exports of CPO inched down by -3.2%yoy and -2.8%mom in Jul20 to 656k tons, with refined product exports at 2.5mn tons (+10.5% yoy and +18.2% MoM). Domestic consumption stood at 1.4mn tons (-0.6% yoy and +7.3% MoM) driven by higher FAME absorption. The final stocks for Jul 20 reached 3.6mn tons (+2.9% YoY, -8.3%MoM). China and Middle East exports surged +43% MoM and 65% MoM, respectively, to 629k tons for China in Jul20 while Middle East exports reached 273k tons in Jul20. (GAPKI)

BMRI: 8M22 result highlights

  • Net profit (bank only) in 8M22 touched IDR24.7tn (+59.8% yoy), inline at the higher bound of our forecast (accounted for 70.8% of FY22F) with 9.9% yoy loans growth in Aug-22, 110bps annualized credit costs and 35.6% Cost to Income Ratio (CIR).
  • A c.17bps expansion in NIM to 4.5% based on our calculation (7M22: 4.4%, 8M21: 4.3%) owing to a lower blended CoF by c.44bps to 1.2% with higher CASA at 75.3% of cust. deposits as of Aug-22 (Aug-21: 72.9%).
  • We believe BMRI is one of the main beneficiaries from recent hiked in policy rate due to its approximately 86% exposure on floating rates loans as of Jun-22 would gradually lift-up its asset yields with 3-6 months lagging period. While its initiatives to build up sticky CASA deposits through apps both for individual and wholesale customers would put less pressure on its blended CoF in our view.
  • We maintain our IDR34.9tn net profit forecast this year with 8.6% yoy financing growth, 5.1% NIM and 159bps credit costs. BUY our GGM-derived TP of IDR10,500 implying 2.1x PBV 20223F. (Eka, BRI-DS)

BUKA’s Private Placement through MESOP – IDR 3.96 tn

BUKA will release 5.06 bn shares through private placement in the context of implementing the management and employee stock option program (MESOP). BUKA will sell its shares at a price of IDR 783 per share, bringing total fund proceeds from this corporate action to IDR 3.96 tn. According to Management, the implementation period for the private placement will be from October 3 - November 11, 2022 (30 trading days). (Investor Daily)

ISAT: KTA Ooredoo Investor Day Synergies, on the upper limit, well on time

Reiterating key messages from CEO:

FIXED BB

  • Indosat has 30,000km of fiber for connecting its own sites. They start to monetize it further after launching its new fixed broadband HiFi. Intention is to capture 10% in the next 3-5years out of the 70mn households addressable market. Looking to work with partners to drive the growth faster. (We know the Indonesian fixed broadband is very fragmented with over 200+ small operators spread across)

Network Integration

  • The postmerger network integration of 42,000 IOH sites on aggregate is ongoing, - 55% of this project is completed.
  • The CEO expects post integration the coverage to be as good as TSEL in Java and to work towards this level in ex Java.
  • They expect a quantum leap in improvement from Hutchinson as currently they operate with the additional 900MHz of spectrum which they didn't have before.

SYNERGIES

  • IOH well within USD300-400mn value creation target in the next 3-5years. The CEO goes a step further saying IOH value creation can reach the upper limit USD400mn by year 4.

To keep both brands?

  • The CEO emphasize the fact that both brands are improving after the merger with growth in number of subs and more improvement in CSAT and NPS scores

Digital aspirations

  • Interestingly IOH CEO shared the Google Temasek Bain internet economy projection (USD70mn -> 146bn GMV 2021-25F in Indonesia) implying the digital side of IOH aspirations in the coming years (Niko, BRI-DS)    

JSMR: 1H22 Result

JSMR managed to achieve a positive performance in 1H22 by recording a net profit of IDR 734.8 bn. The improved 1H22 performance was reflected in the achievement of revenue at IDR 7.54 tn (+9.55% yoy). The majority of JSMR's revenue comes from toll revenues of IDR 6.07 tn (+16.1% yoy). However, JSMR's cost of revenue in 1H22 was 3.62 tn (+18.03%).

According to JSMR, the company can still maintain the market share of operating toll roads throughout Indonesia at a position of 50%, by adding 13.40 km of operations for the Manado-Bitung toll road section of Danowudu-Bitung and the addition of 206.65 km toll road concessions for Jalan Gedebage-Tasikmalaya-Cilacap toll road this year. As of 1H22, JSMR has also completed the construction of the Serpong-Cinere Toll Road Section II for the Pamulang-Cinere Section along the 3.64 km which is currently in the process of functional feasibility testing. (Investor Daily, Bisnis)

WSKT Obtained Right Issue Approval

On yesterday’s (9/26) EGMS, WSKT shareholder approved the requests of corporate action to conduct rights issue and bonds/sukuk issuance for capital raising. New share issued will be 8.7 bn. new shares @IDR 100 nominal value/share, with limited public offering scheme. According to management, WSKT will obtain a state-capital injection (PMN) of IDR 3 tn. this year, with right issue conducted to maintain ownership level the same as existing condition. Target rights issue proceed will be at IDR 980 bn., aiming to finance the completion of 2 toll road project Kayu Agung-Palembang-Betung (KAPB) Stage II and Ciawi-Sukabumi Section III. (Investor Daily)

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