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Indonesia Morning Cuppa
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Top Story
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Company Update
Adaro Energy
Targeting a Higher
Production Growth For FY18
Adaro
plans to reach FY18 coal production of 54-56m tonnes, which is a 4-8% YoY
increase from FY17F’s coal production volume of 51.79m tonnes (-2% YoY). Its
targeted FY18 strip ratio is 4.9x (vs 4.6x in FY17). 4Q17’s coal production
of 12.43m tonnes (-7% YoY, -13% QoQ) was due to heavy rains – the highest in
the last six years. FY17’s coal production represented 95.7% of our FY17
assumptions. We fine tune our production and sales assumptions and reiterate
BUY with an unchanged DCF-derived TP of IDR3,100 (27% upside).
Analyst: Hariyanto Wijaya, CFA, CFP, CA, CPA, CFTe, CMT (6221)
2970 7061
Link
to report:Adaro Energy : Targeting a Higher Production Growth For FY18
Morning
Cuppa Full Report: Indonesia Morning Cuppa 080218
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Other
Stories
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Visit Note
Buyung Poetra
Sembada
Earnings Likely to
Recover
Buyung
Poetra Sembada’s (Buyung) management revealed its earnings has started to
recover – after recording 3Q17 loss because of high sales return – following
the government’s new regulation on new rice classification and ceiling retail
sales price. Buyung is optimistic on this year’s sales volume growth on the
back of rising Topi Koki rice demand in January. To deal with
currently-higher paddy price in Java, Buyung purchases its paddy and rice
from South Sulawesi and South Sumatra. Buyung will build a new rice plant to
double its production capacity. Based on the company earning guidance, the
counter is trading at 23x-15x FY17-18F P/Es. NOT RATED
Analyst: Andrey Wijaya (6221) 2970 7058
Morning
Cuppa Full Report: Indonesia Morning Cuppa 080218
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Indonesia sets
copper benchmark price at USD7,095.73/tonne
Indonesia’s foreign
reserves rise to USD131.98bn in January 2018
Waskita Karya to
issue IDR3.45trn bonds in Feb 2018
Minna Padi drops
plan to acquire Bank Muamalat Indonesia
Tahir family enters
Sentul City
Unilever Indonesia
allocates USD250m capital expenditure
Bank BCA to allocate
IDR4.5trn capex to acquire two banks in FY18
Sri Rejeki Isman to
finalize acquisition proses in 2M18
BRI Agro allocates
IDR1trn fund for business acquisition
Modern Internasional
to sell 50% asset
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TP
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Upside
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Catalysts
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(IDR)
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(%)
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Astra International
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9,500
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13
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Given the robust of
the All New Toyota Rush and Daihatsu Terios sales
orders, Astra has raised its monthly sales target. Its lowering of Daihatsu
Terios’ selling price while positioning Toyota Rush at a higher class are
seen as a good strategy to reclaim market
share. We also see the company’s coal mining unit benefiting from higher coal
prices. We raise its earnings estimates, and SOP-based TP to IDR9,500 (from
IDR9,200, 13% upside), implying 16-15x FY18F-19F P/Es. Key risk is the
intense competition in the auto industry. SAIC-GM Wuling just launched its
1.8-litre MPV – Wuling Cortez – with an attractive selling price. Maintain
BUY.
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BSD City
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2,650
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44
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Expectations of higher marketing sales due
to lower interest rates, which ought to incentivise mortgage users. BSD City
has the largest proportion of mortgage users vis-à-vis other developers.
There is also better monetisation from its large landbank.
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Bukit Asam
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4,100
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20
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Bukit Asam is the cheapest coal counter in
our coal universe. We think earnings growth should be the catalyst for its
share price. We believe investors’ concerns about a potential cost-plus
margins formula in determining coal selling prices to domestic power plants
should fade. This is based on our checks with several competent sources. The
formula is only valid for coal sales to new mine mouth power plants. It is
not for existing/under construction mine mouth power facilities.
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Indofood Sukses Makmur
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10,300
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28
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We expect higher domestic consumer spending
in 2018. This would be thanks to the Government stimulus initiatives for
low-end consumers. Indofood Sukses Makmur, as one of the largest food &
beverage (F&B) players, should benefit from this situation. F&B
accounted for around 62% of its total 9M17 EBIT. Higher flour prices may also
boost Bogasari Flour Mills’ earnings, which accounted for around 14% of the
company’s EBIT.
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Ramayana Lestari
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1,550
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34
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Consumer spending recovery – especially
from the lower income segment in 2018 – is likely to benefit Ramayana Lestari
after a flat performance in 2017. This is due to increased subsidies by the
Government that have been allocated in the 2018 budget via the Ministry of
Social Affairs. In addition, President Joko Widodo’s (Jokowi) work-for-cash
programme is likely to help raise consumer spending.
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Recent
Stories
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To access
the following reports, please click on the link:
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Economics Update: Growth Inches Higher As
Domestic Demand Improves
Link to report: Growth Inches Higher
As Domestic Demand Improves
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Regional Strategy: Focus On The Stocks: Our
Updated Outlook In The Region
Link to report: Focus On The Stocks:
Our Updated Outlook In The Region
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Regional Strategy: Looking West - As The US
Sneezes: Our Updated Outlook In The Region
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Economics Update: Inflation Moderates In
January
Link to report: Inflation Moderates
In January
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Economics Update: Dec 2017 M2 Edges Down,
Loans Growth Picks Up
Link to report: Dec 2017 M2 Edges
Down, Loans Growth Picks Up
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Sector News Flash: Real Estate: Gaining
Attention
Link to report: Real Estate: Gaining
Attention
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Company Update: Astra International: Robust
Toyota Rush and Daihatsu Terios Sales
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Corporate News Flash: Perusahaan Gas
Negara: Transfer Approved But Merger Scheme Not Announced
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Sector Update: Mining: Monetising Coal
Price Momentum
Link to report: Mining: Monetising
Coal Price Momentum
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Corporate News Flash: Perusahaan Gas
Negara: What Is In The Price Now?
Link to report: Perusahaan Gas
Negara: What Is In The Price Now?
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RHB Guide to Investment Ratings
Buy: Share price may
exceed 10% over the next 12 months
Trading
Buy:
Share price may exceed 15% over the next 3 months, however longer-term outlook
remains uncertain
Neutral: Share price may fall
within the range of +/- 10% over the next 12 months
Take
Profit:
Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall
by more than 10% over the next 12 months
Not
Rated:
Stock is not within regular research coverage
