Good morning,
Semen Indonesia -
FY16 Earning Above Expectation, Driven By Lower Tax Rate
While Semen
Indonesia’s FY16 earning was flat at IDR4.5trn, it accounts for 105%/112% of
our/consensus full-year estimates. Above expectation earnings was largely
driven by lower-than-expected effective tax rate. Based on our calculation,
the company’s effective tax rate declined to only 10.8% in FY16 (from 22.7%
in FY15). On operational basis, the situation remains challenging with Semen
Indonesia’s sales and EBIT declined to IDR26trn (-3% YoY) and IDR5trn (-16%
YoY), respectively.
It is worth noting
that, on QoQ basis, Semen Indonesia recorded the lowest EBIT margin of 15.6%
in 4Q16, down from 19.8% in 3Q16 mainly dragged down by both lower ASP and
higher expenses, in our view. The company’s domestic average ASP (excl. Thang
Long Cement) declined to IDR766,000/tonne in 4Q16 (-3% QoQ).
Outlook: In January, Semen
Indonesia slightly raised its domestic cement ASP to IDR763,000 (+0.3% MoM,
from IDR761,000/tonne in Dec-16), which we believe mainly to maintain EBIT
margin on the back of pressure from higher energy costs. We expect energy
cost – which account for around 25% of COGS – to further increase, after the
renewal of new coal purchase contract, inline with higher international coal
price trend. The majority of coal purchase is under 3-or-6 months contract
term.
We maintain Neutral
on Semen Indonesia with DCF-based TP of IDR9,800 (7% upside), implies FY17F
P/E of 12x. (Andrey Wijaya)
Link to Daily report: Indonesia Morning Cuppa - 210217 |
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Media
Highlights:
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Corporates
Antitrust commission
claimed cartel practice on Astra Honda scooter selling price
Antitrust
commission, known as KPPU, found Astra Honda Motor (AHM) and Yamaha Indonesia
Motor Manufacturing (YIMM) guilty of cartel for automatic scooter’s selling
price fixing in 2014. Commission orders AHM, unit of Astra International
(Astra), to pay IDR22.5bn fine, while Yamaha (YIMM) must pay IDR25bn fine.
We believe this case
will have limited impact on Astra overall performance. In the past, KPPU also
claimed that they found cartel practices in other industry - such as poultry
feed in 2016. During the time, financial impact to poultry companies – such
as Japfa Compfeed (JPFA IJ, BUY, TP: IDR2,700) and Malindo Feedmill (MAIN IJ,
BUY, IDR1,500) was only limited to the fine that have been set. Astra’s fine
is IDR22.5bn is insignificant when compared to the company’s earning of
IDR14trn in 2016 based on our forecast.
Furthermore, Astra
still has room to sent their objection on the above KPPU decision via legal
court. We maintain BUY on Astra with SOP-based TP of IDR9,100 (14% upside)
implies 19x/16x FY17/18F P/Es. (Andrey
Wijaya)
Astra International
allocates IDR6trn for capital expenditure
Indocement sets 5%
YoY revenue growth target
Saran Media
Nusantara announces private placement in 2Q17
Wijaya Karya Beton
targets 21% increase in production
Bakrie Sumatra
Plantation to restructure debts
Mayora Indah to
eliminate one series of bonds
PP Properti targets
80 hectares of land bank in 2017
Production of Eagle
High Plantation surged 100% QoQ in 4Q16
The government issued a new infrastructure financing scheme |
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Our
Recent Publication:
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Company Update:
Waskita Karya - Continued Solid
Performance Expected In 2017
Link to report: Waskita Karya : Continued Solid Performance Expected In 2017 |
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Results Review: Adhi
Karya Persero - Looking Towards a Better
Year
Link to report: Adhi Karya Persero : Looking Towards a Better Year |
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Company Update:
Astra International - Expect Astra’s Financial
Services Unit To Recover
Link to report: Astra International : Expect Astra’s Financial Services Unit To Recover |
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Sector Initiation:
Retail: Tailwinds
Trump Headwinds
Link to report: Tailwinds
Trump Headwinds
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Results Review: Bank
Tabungan Negara: More Good Years Ahead
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Economic Update: CAD
Improves In 4Q, BOP Surplus Continues
Link
to report: CAD
Improves In 4Q, BOP Surplus Continues
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Sector Update:
Regional Plantation - Last Round Of El Nino
Impact for Malaysia
Link
to report: Last
Round Of El Nino Impact for Malaysia
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Sector News Flash:
Regional Oil & Gas - One Of The Deepest Cuts
In The History Of OPEC
Link
to report: One
Of The Deepest Cuts In The History Of OPEC
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Sector News Flash:
Regional Oil & Gas - Production Cut Rollover a
Possibility
Link
to report: Regional
Oil & Gas: Production Cut Rollover a Possibility
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Best regards,
Helmy Kristanto
Director
Head of Indonesia
Research
PT. RHB Securities
Indonesia
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