RHB Indonesia Morning Cuppa - 16 March 2018 (Trade Balance, Bekasi Fajar, Today's News)

Indonesia Morning Cuppa

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Economics Update

Trade Balance

February Exports Pick Up While Imports Soften Slightly

Exports picked up to a growth of 11.8% YoY in February, following an increase of 8.6% in January. This was led by stronger non-oil & gas exports. Moving forward, we envisage the export of goods and services to grow by a healthy 10% in 2018, despite moderating from last year’s stellar pace, due to a high base effect.

Analyst: Rizki Fajar (6221) 2970 7065

Link to Report: will be sent out later

Morning Cuppa Full Report: Indonesia Morning Cuppa 160318

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Results Review

Bekasi Fajar

Solid FY17 results

Bekasi Fajar’s FY17 net income came in above our expectations, accounting for 117% of our full-year target. Meanwhile, its revenue was in line with our estimate. The company’s strong results were supported by the bulk land sales in 4Q17 that led to a total of 42.2ha land sold, as well as the proceeds of the divestment of its JV with Daiwa. We maintain our assumptions, while our TP remains at IDR490 (72% upside) – implying a 65% discount to NAV. Maintain BUY.

Analyst: Yualdo Tirtakencana (6221) 2970 7062

Link to Report: Bekasi Fajar : Solid FY17 Results

Morning Cuppa Full Report: Indonesia Morning Cuppa 160318

Today’s News

Indonesia’s external debt rises 10.3% YoY in January 2018

President Jokowi asks banks to be more aggressive in giving loans

Semen Indonesia allocates IDR2.5trn capital expenditure in FY18

Chandra Asri allocates USD568m capital expenditure in FY18

Bank Indonesia: Rupiah won’t weaken to IDR15,000 against USD

Metland targets to receive IDR1.5trn from joint project

Barito Pacific and Siam Cement Group to invest USD6bn for petrochemical business in 2018

XL to increase postpaid contribution to 5% in FY18

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.