RHB Indonesia Morning Cuppa - 15 March 2018 (Summarecon Agung, Today's News)

Indonesia Morning Cuppa

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Company Update

Summarecon Agung

2M18 Marketing Sales Are On Track

In 2M18,Summarecon recorded IDR341bn (+46% YoY) in marketing sales. So far, it is on track to achieve its full-year target of IDR3.7trn. The presales came from existing products and new projects slated to be launched in 2Q18. Presently, we maintain our assumptions and SOP-based TP of IDR1,040 (8% upside), which implies a 65% discount to NAV. Currently the counter is trading at a 66% discount to NAV. Downgrade to NEUTRAL (from Buy).

Analyst: Yualdo Tirtakencana (6221) 2970 7062

Link to Report: Summarecon Agung : 2M18 Marketing Sales Are On Track

Morning Cuppa Full Report: Indonesia Morning Cuppa 150318

Today’s News

Hutama Karya targets IDR2.5trn from the IPO of its subsidiaries

Panca Global Kapital seeks IDR212bn from rights issuance

Indosat targets low single digit revenue growth in FY18F

AKR Corporindo not looking for additional fundings

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.