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Good morning,
United Tractors –
Further growth on mining contracting volume
Mining contracting
volume growth continue to expand. Mining contracting business, the biggest
contributor to United Tractors’ consolidated revenue, shows further expansion
in volume growth. Its overburden removal volume grew by 7.0%YoY in 5M17 (vs
5.7%YoY in 4M17) while coal production volume grew by 5.6%YoY in 5M17 (vs
4.6%YoY in 4M17). We expect the growth of volume should keep expanding in
remaining of the year as rainy days should become less frequent in coming
months as BMKG’s forecast that most of Sumatera and Kalimantan would see the
dry season commencement from June.
Komatsu sales unit
of 302 units in May’17 (+68.7%YoY, -10.9%MoM). In May’17, Komatsu
sales to coal mining sector still dominate (61% of total), which should
result in an improvement in blended average selling price as selling
price/unit of mining heavy equipment is higher than price/units of heavy
equipment to other sectors. This is due to significant difference in heavy
equipment sizes. 5M17 Komatsu sales unit of 1,488 units is within our
expectation (we expect FY17F Komatsu sales unit of 3,520 units vs FY17
management guidance of 3,000 units).
Reiterate Buy call with TP: IDR30,400. Our DCF-derived TP
implies FY18F-19F P/Es of 14.5x and 13.6x respectively. We think its
near-term key catalyst is improving monthly mining contracting volume in
coming months. (Hariyanto Wijaya, CFA, CPA)
Link to daily
report: Indonesia Morning Cuppa 220617
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Media Highlights:
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Corporate
Value of
light rail transit corrected by IDR1.6trn
Acset
Indonusa has signed IDR7.1trn new contracts
Barito
Pacific establishes logistic company
Modernland
announces IDR100.2bn dividends
Waskita
Beton Precast receives loan facilities from two banks
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Our
Recent Publication:
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Company Update: Semen Indonesia – ASP Sees a Slower Reduction In May
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Economics Update: BI Continues To Hold Key
Policy Rate In June
Link to report: BI
Continues To Hold Key Policy Rate In June
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Economics Update: Exports And Imports Accelerate In
May
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Sector Update: Coal Mining – China To Cut
Coal Production Capacity
Link to report: China
To Cut Coal Production Capacity
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Company Update: Ramayana Lestari – June Is
a Key Month For Sales
Link to report: Ramayana
Lestari : June Is a Key Month For Sales
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Company Update: Indofood Sukses
Makmur - Subsidiary Buys
Land From Anthony Salim
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Company Update: Bekasi Fajar – Raising Target On a Brighter Outlook
Link to report: Bekasi
Fajar : Raising Target On a Brighter Outlook
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Company Update: Bank Tabungan Negara – Growing Further Through The Housing
Market
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Strategy: Moving Upwards
Link to report: Indonesia
Strategy: Moving Upwards
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Company Update: Indocement Tunggal
Prakarsa –
Competition
Likely To Get Tougher
Link to report: Indocement
Tunggal Prakarsa : Competition Likely To Get Tougher
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Best regards,
Helmy Kristanto
Director
Head of Indonesia Research
PT RHB Sekuritas Indonesia
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