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Indonesia Morning Cuppa
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Company Visit Note
Bukit
Asam
Expecting
Higher CV Coal Sales Volume In 2018
We
visited Bukit Asam to gauge management’s outlook. Its 2018 DMO to PLN stands
at 5-6.1m tonnes and it would sell 11.5-12m tonnes to PLN in 2018. The
company believes that PLN would only be able to influence the coal selling
price for the DMO portion, ie its sales volume to PLN (5-6.1m tonnes). The
remaining 6m tonnes would therefore be sold at market price. In order to
eliminate the potential negative impact of the DMO coal price, the company
would increase the sales contribution of high CV coal to c.10% of 2018F sales
volume (vs c.0.65% of total coal sales volume in 2017). It also targets total
coal sales of 25.5m tonnes in 2018 – a growth of c.10% YoY from 2017. We
reiterate our BUY call with an unchanged TP of IDR4,100 (27% upside) implying
2018F P/E of 9x (-0.8SD from its 10-year mean P/E of 12.3x). We like the
company for its superior ROE.
Analyst: Hariyanto
Wijaya, CFA, CFP, CA, CPA, CFTe, CMT (6221) 2970 7061
Link
to report: Bukit Asam : Expecting Higher CV Coal Sales Volume In 2018
Morning
Cuppa Full Report: Indonesia Morning Cuppa 270218
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Results Review
Unilever
Indonesia
Benefiting
From Lower Input Costs
Unilever’s
4Q17 earnings increased 10.6% QoQ despite flat revenue thanks to lower input
costs. Our ground checks indicate no significant price increases in the last
quarter of 2017. Management is likely to increase the selling price of a few
products in March. It continues improving operating efficiency, especially by
lowering A&P expenses. On the back of lower WACC, we raise our DCF-based
TP to IDR50,700 (from IDR48,500, 6% downside), which implies to FY18F-19F
P/Es of 47x and 42x respectively. Maintain NEUTRAL, due to its rich
valuation.
Analyst: Andrey
Wijaya (6221) 2970 7058
Link
to report: Unilever Indonesia : Benefiting From Lower Input Costs
Morning
Cuppa Full Report: Indonesia Morning Cuppa 270218
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Company Update
Construction
Impact
estimates of government’s moratorium on 36 elevated projects
The
Ministry of Public Works and Housing said in yesterday’s newspaper that the
evaluation process for 36 projects that have been halted will take place on
26-27 February 2018. If a project passes the evaluation process, it will be
allowed to continue. Previously, these 36 projects were halted after the
latest construction incident in Becakayu toll road (Bekasi – Cawang – Kampung
Melayu) which was constructed by Waskita Karya. Assuming that the evaluation
process is on time, there would be no significant impact on the revenues of
Waskita Karya or other construction companies since the pause was only about
a week.
Analyst: Michael
Halim (6221) 2783 0719
Morning
Cuppa Full Report: Indonesia Morning Cuppa 270218
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Indonesia considers
waving luxury tax on electric vehicles
Samindo Resources to
acquire two mines
Wijaya Karya Beton
to increase production capacity in South Sulawesi in FY18
Chandra Asri
Petrochemical allocates USD568m capex in FY18
Garuda Indonesia to
boost cargo business and efficiency
Alfamart to expand
to 800 stores
Inka sends 31
trainsets starting March 2019
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