Indonesia Morning Cuppa
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Top Story
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Results
Review
Waskita Karya
Waskita Karya released its FY17 results that came above
consensus estimates, continuing strong performance from its toll roads
acquisitions. Net income more than doubled while revenues almost doubled YoY.
Its new contracts in FY17 was in line with company’s target of IDR55trn,
making its orderbook at the end of FY17 of just below IDR140trn. Waskita’s
net gearing was still deep in the red while net gearing increases, putting
more emphasis on the importance of its toll road divestment process. The
company is trading at 10.5x / 9.4x FY18F/FY19F P/E, with our rating Under
Review.
Analyst: Michael
Halim (6221) 2783 0719
Morning
Cuppa Full Report: Indonesia Morning Cuppa 050318
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Indonesia’s
January 2018 foreign tourist arrivals fall 6.17% YoY
Financial
Services Authority targets below 2% NPL by end of 2018
Erajaya
Swasembada plans to triple its capex in FY18
Barito
Pacific’s rights issue schedule
Bulog
to disburse 400,000 tonnes of subsidised rice in March
Mayora
targets IDR22trn revenue in FY18
Mitsubishi
targets to sell 53,000 units commercial vehicles in FY18
Pelindo
II teams up with Japanese firms in Patimban Port bidding
Intiland
targets 15ha of land sales
Indosat
to expand beyond Java area
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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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