Good morning,
Bukit Asam – 3Q17
earnings above consensus
Bukit Asam posted
its 3Q17 earnings which came above consensus. 9M17 earnings is 77% / 82% of
RHB / consensus numbers
¨ 3Q17
earnings of IDR902bn
(+165% YoY, +5.7% QoQ). Bukit Asam booked strong 3Q17 numbers, which was
driven by higher revenue and profit margins.
¨ Gross
margin expand to 40% in 3Q17 (vs 24% in 3Q16 vs 37% in 2Q17). We
suspect higher profit margin due to higher ASP and manageable costs
¨ Maintain
Buy with TP: IDR17,400. Bukit Asam is trading at P/E FY17 of 6.8x and FY18 of
5.8x, which is the cheapest in our coal universe.
¨ Key
risk:
potential unfavorable government policy on selling coal price for domestic
power plants. (Hariyanto Wijaya, CFA, CPA,
CMT)
Link to daily
report: Indonesia Morning Cuppa 191017
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Company Update:
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Bekasi Fajar (BEST
IJ, BUY, TP: IDR490), Waiting On Guidance For 9M17
We had a recent
discussion with the management of Bekasi Fajar and learned that the company
did not book any land sales during 3Q17, thus its marketing sales for 9M17
remains at 22.3ha which is still above estimates. In terms of marketing
sales, we expect 4Q17 would be extremely important since historically, most
of the marketing sales were booked during the fourth quarter. Guidance on the
9M17 financial results has yet to be given; the results are scheduled for
publication at the end of this month. We reiterate our BUY call with a TP of
IDR490 (74% upside). Currently the stock is trading at 6.5x FY17F P/E and an
83% discount to NAV.
¨ Focus
on 4Q17.
Although the company booked no land sales during 3Q17, overall the 9M17
marketing sales accounted for 66% of our full year target and above its four
year historical average of 54% (Figure 1). In addition, this month in
October, management signed a land sale for 7.3ha, to a Japanese
electronics-related company for c.IDR2.7m/sqm. Based on this information, YTD
marketing sales has reached 29.6ha and accounted for 87% from our full year
target with an ASP of IDR2.65m/sqm reached YTD. Bekasi Fajar may be able to
secure another 5-10ha of land sale in during the 4Q17 in order to reach its
upper target of 40ha. We think this is doable because historically Bekasi
Fajar booked c.46% of its marketing sales during the fourth quarter on the
last four years. In addition, the company still has 53.7ha of remaining land
inquiries from 10 companies.
¨ Divestment.
We
learned the company divested 31% of the warehouse held in JV at c.IDR193bn or
approximately 14% premium to its acquisition cost. Management also indicated
that the company would incur c.IDR50bn of gain before tax in the income
statement from this divestment process. Operationally, the proceeds could be
used for land acquisitions.
¨ We reiterate our BUY
call
based on a 17% CAGR for earnings in FY16-19F, on the expectations of an
improved economic outlook that could lead to more demand for industrial land.
The company’s main competitive advantage is the location in close proximity
to Jakarta, Tanjung Priok seaport and the Soekarno-Hatta International
Airport. (Yualdo Tirtakencana)
Link
to report: Bekasi Fajar : Waiting On Guidance For 9M17
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Media Highlights:
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Corporate
Floor price rise for
airlines sees opposition
Aneka Gas to issue
IDR300bn bond
Bank Rakyat
Indonesia’s stock split plan approved
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Our
Recent Publication:
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Company Update: Arwana Citramulia – Revenue
Remains Robust Despite Elevated Costs
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Economics Update: September Exports
Moderate, Imports Pick Up
Link to report: September Exports
Moderate, Imports Pick Up
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Sector Update: Building Materials –
Infrastructure Projects Boost Bulk Cement Sales Growth
Link to report: Infrastructure
Projects Boost Bulk Cement Sales Growth
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Company Update: Ciputra Development – Toning Down Our
Forecasts
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Corporate News Flash: Summarecon Agung –
9M17 Marketing Sales Are In Line With Estimates
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Regional Thematic: Halal – An Earnings
Boost Strategy
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Economics Update: September Inflation
Remains Moderate
Link to report: September
Inflation Remains Moderate
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Company Update: Nippon Indosari Corpindo –
Details On Rights Issuance
Link to report: Nippon
Indosari Corpindo : Details On Rights Issuance
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Sector Update: Coal Mining - Energy
Minister Does Not Agree With Cost-Plus Margin
Link to report: Energy
Minister Does Not Agree With Cost-Plus Margin
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Company update: Tower Bersama Infrastructure – Not
Our Preferred Exposure In The Sector
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Best regards,
Andrey Wijaya
Senior Vice President
Research Analyst – Auto, Consumer, Cement
PT RHB Sekuritas Indonesia
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