RHB Indonesia Morning Cuppa - 06 April 2018 (Mitra Adiperkasa, Today's News)

Indonesia Morning Cuppa

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Company Update

Mitra Adiperkasa

FY17 results in line, expects growth to continue

Mitra Adiperkasa (MAPI IJ, Under Review) booked FY17 net income in FY17 that reached 96% of consensus estimates, while revenue came in at 103% of consensus. Gross margin was lower in FY17, while EBIT and net margin grew on lower operating expenses and effective tax rate. In quarterly terms, MAP booked weaker YoY net income in 4Q17 (-2% YoY | +17% QoQ) while revenues grew (+20% YoY | +16% QoQ). The stock is trading at 24x FY18F P/E, our rating is under review.

Analyst: Michael Halim (6221) 2783 0719

Morning Cuppa Full Report: Indonesia Morning Cuppa 060418

Today’s News

Bank Central Asia announces IDR6.29trn dividends

Subsidiary of contractors announce dividends

Japfa Comfeed allocates IDR2.5trn in capital expenditure for FY18

Moody’s downgrades Matahari Putra Prima to B3

Bank Indonesia to change minimum reserve requirement policy

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		9,500	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 64% of its total FY17 EBIT. The company is attractively trading at low earning multiple.
	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.