RHB Indonesia Morning Cuppa - 01 March 2018 (Money Supply, Today's News)

Indonesia Morning Cuppa

Top Story

Economics Update

Money Supply

Jan 2018 M2 Edges Up, Loans Growth Moderates

Indonesia’s broad money supply (M2) growth edged up to 8.4% YoY in Jan 2018 (Dec 2017: +8.3%) due to a pick-up in net domestic claims. This was in line with an increase in government disbursements. Going forward, we expect the broad money to pick up pace to 10.4% in 2018 (2017: 8.3%), underpinned by stronger economic growth and the upcoming elections.

Analyst: Rizki Fajar (6221) 2970 7065

Link to report: will be sent out later

Morning Cuppa Full Report: Indonesia Morning Cuppa 010318

Today’s News

Indonesia may issue regulation on fixed coal price for PLN in early March

Mitra Keluarga to add two new hospitals in FY18

Waskita to assist suspect of Becakayu toll road incident and to restructure its Board of Directors

Acset Indonusa booked IDR8.4trn new contracts in FY17

Semen Baturaja targets 44% net income growth in FY18

Tunas Baru Lampung pushes sugar division growth in FY18

Waskita Beton records 58% growth in net profit

Top BUYs
		TP	Upside	Catalysts
		(IDR)	(%)	Catalysts
Astra International		9,500	13	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.
BSD City		2,650	44	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.
Bukit Asam		4,100	20	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.
Indofood Sukses Makmur		10,300	28	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.
	Ramayana Lestari	1,550	34	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.