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Good morning,
United Tractors –
Strong Komatsu sales to mining sector in 2Q17
¨ Strong Komatsu sales to mining sector in
2Q17.
Although total Komatsu sales only grew by 7%QoQ in 2Q17, actually Komatsu
sales to mining sector increased significant (309% YoY, 57%QoQ) which should
make higher blended average selling price as the selling price of mining
heavy equipment on average around 5x higher than selling prices of
construction heavy equipment due to significant different in the size of
heavy equipment. Less working days in June’17 due to Lebaran holidays made
lower Jun’17 sales volume than May’17. 6M17 operational performance is within
our expectation.
¨ Mining contracting volume keep growing. United Tractors
booked higher overburden removal (+9%YoY, +12%QoQ) and coal production
(+5%YoY, +8%QoQ) in 2Q17. According to United Tractors, extreme rainfall in
June’17 curbed its mining contracting volume. Heavy rainfall still happens in
pamapersada mine sites until end of July’17. 6M17 operational performance is
within our expectation.
¨ Reiterate
Buy with TP:IDR30,400. Our TP implies FY18F-19F P/Es of 14.5x and 13.6x
respectively on our EPS estimates. We think improvements in the monthly
contracting volume in coming months should be the near-term catalyst. (Hariyanto Wijaya, CFA, CPA, CMT)
Link
to daily report: Indonesia Morning Cuppa 270717
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Company Update:
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Agung Podomoro (APLN IJ, NR) Visit notes
We visited Agung Podomoro to get the latest
update on the company’s performance with the following key points:
¨ This year Agung
Podomoro targets IDR3.5trn of marketing sales of which IDR1.7trn has been
booked during 1Q17 accounting for 50% from target.
¨ Most of the
marketing sales will come from the sale of existing projects such as Podomoro
Golf View and Podomoro City Deli Medan where both projects are expected to
contribute the most, while new projects to be launched in 2H17 includes an
apartment project in Batam, mid-rise apartment project in Karawang, and
Podomoro Golf View Tower 4. In order to develop these projects, the company
has allocated IDR5trn for this year’s capex. Management also plans to sell
Pullman Central Park Hotel to REITS.
¨ Management expects
FY17 revenue from property development to achieve single digit growth
(excluding the hotel sale) while recurring income is expected to grow 9%-10%
YoY. Gross margin expected to be maintained around ~50%.
¨ Based on 1Q17
results the company’s net gearing stood at 56%, however Agung Podomoro
recently issued USD300mn bonds or equivalent to ~IDR4trn that was used to
refinance ~IDR2trn of existing debts and the remaining was used for working
capital. Post bond issuance, we estimate current net gearing stood at 96%
while management expects overall cost of debt to reduce to around 10% from
11%-12%.
¨ Assuming a similar
8% growth on FY17F net profit, we estimate Agung Podomoro to trade at 6.4x
FY17F P/E. (Yualdo Tirtakencana)
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Media Highlights:
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Corporate
Indonesia’s direct
investment grew 12.7% YoY in 2Q17
Weak apartment and
condo sales in 1H17
Siloam International
to undertake rights issuance
Waskita Beton to
build two new plants
Pelindo II looks to
raise IDR7trn from IPO
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Our
Recent Publication:
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Results Review: AKR Corporindo – Petroleum
And Industrial Estate Sales Boost Growth
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Sector Update: Plantation – Interesting
Takeaways From Site Visits In Indonesia
Link to report: Interesting
Takeaways From Site Visits In Indonesia
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Results Review: Bank Tabungan Pensiunan
Nasional – Promising Yet Challenging
Link to report: Bank
Tabungan Pensiunan Nasional : Promising Yet Challenging
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Results Review: Bank Tabungan Negara : Not
Slowing Down Yet
Link to report: Bank
Tabungan Negara : Not Slowing Down Yet
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Company Update: Adhi Karya Persero –
Waiting For The Sun To Rise
Link to report: Adhi Karya Persero –
Waiting For The Sun To Rise
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Sector Update: Telecommunications -
Promotions Of No Meaningful Impact To XL And Indosat
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Sector Update: Coal Mining – Positive
Momentum To Build Up
Link to report: Coal Mining –
Positive Momentum To Build Up
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Company Update: Arwana Citramulia –
Earnings Should Improve In The Following Quarters
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Economics Update: BI Continues To Hold Key
Policy Rate In July
Link to report: BI
Continues To Hold Key Policy Rate In July
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Results Review: Bank Mandiri – Time To Rise
Again
Link to report: Bank
Mandiri : Time To Rise Again
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Best regards,
Helmy Kristanto
Director
Head of Indonesia
Research
PT RHB Sekuritas
Indonesia
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