Earnings of PT Ciputra Development Tbk Up To 71.94%

Property developer PT Ciputra Development Tbk scored net profit growth of 71.94% to Rp 849,38 billion in 2012 from the previous year's performance Rp. 494,01 billion.

From the amount of Rp. 589,1 billion attributable to owners of the parent entity while Rp. 260,28 billion attributable to non-controlling interests.

The Earnings per Share is the company rose to Rp. 39,- per share from the previous year to Rp. 21,- per share.

Based on the company's consolidated financial statements as of 31 December 2012 which is published today, Thursday (28/03/2013), net profit growth was driven by the performance of revenues that reached Rp 3,32 trillion, growing 52.53% from the previous year Rp 2,18 trillion.

Net Profit Margin of PT Ciputra Development Tbk (CTRA) rose 12.72% to 25.56% in 2012 from the previous year 22,68%.

Cost of sales and direct expenses reported during the period rose 45.87% to Rp. 1,67 trillion from the previous year Rp. 1,14 trillion.

Meanwhile, the company's pre-tax profit rose 66.36% to Rp. 1,03 trillion from the same period in 2011 amounted to Rp. 618,78 billion. (Bisnis Indonesia)

Although depressed the JCI hold above 4900 on Sessions I

Indeks Harga Saham Gabungan ( IHSG / JCI ) traded in the red zone throughout the first session today (28/3/2013). At 12:00, the index declined by 0.48% to 4904.414.

The Index's Decline has been triggered by selling 145 shares. Meanwhile, the number of shares rose as much as 97 shares and 93 shares were stall. The volume of the transactions this morning involving 5.087 billion shares worth Rp 3.153 trillion.

There are nine sectors flushed. The three sectors with a highest decrease are:

• Other Industry - down 1.59%
• Basic Industry - 1.27%
• Manufacturing Sector - 0.95%.

The Top Losers are:

• PT Leyand International Tbk (LAPD) fell 11.18% to Rp 151
• PT Bank Mayapada Tbk (MAYA) fell 7.69% to Rp 1,800
• PT Nusantara Infrastructure Tbk (META) fell 6.12% to Rp 230

The Top Gainers are:

• PT Prime Build Heritage TBL (KONI) up 25% to Rp 375
• PT Jakarta International Hotel Tbk up 25% to Rp 1450
• PT Sona Topas Tourism Tbk (SONA) up 8,7% to Rp 2,500

News For March 27 2013 in brief

The second electricity tariff increase to be effective 1 April 2013

The electricity tariff for household and industry will be raised by another 5% starting 1 Apr13 as part of 15% increase for the whole 2013. The raise will affect above 1,300VA subscribers. (Bisnis Indonesia)

BII right issue

Bank Internasional Indonesia (Not rated) – will conduct a 1-for-12 rights issue at Rp320 to strengthen its capital base. A maximum total of 4.69bn new shares, representing 7.67% of the enlarged capital, will be issued to raise Rp1.5tr which will lift its total CAR to around 14.5% from 12.9% in December 2012. Maybank as the major shareholder (97.29%) will exercise their rights. Ex-date for the rights issue will be on 13 May with the rights tradable between 17 May to 23 May 2013. (Bisnis Indonesia)

BNI to sell life insurance

Bank BNI is reported to sell up to 40% of BNI Life Insurance and they expect the valuation of up to US$2bn for the life insurance business (US$800m for 40%), a level that is far too high for a company with Rp2.6tr assets as of December 2012. For Indonesia Market Summaries, in addition to the sale of its life insurance business, they also plan to seek shareholders’ approval to conduct a Rp4.5tr haircut on bad debts, starting 2013, that is made possible since the constitutional court cleared the way for the state banks to restructure or sell their NPLs late last year.  (Jakarta Post)

Agus Martowardjojo has been chosen as governor of Bank Indonesia

The parliament finally approved Agus Martowardjojo as Governor of Bank Indonesia (BI) for 2013-2018 with a voting mechanism. 46 member voted Agus as BI Governor from total 54 votes. 7 votes rejected Agus Marto whereas 1 was abstained. (Bisnis Indonesia)

Agung Podomoro Land In-line FY12 net profit

Agung Podomoro Land: In-line FY12 net profit of Rp812bn (APLN, Rp500, Buy, TP: Rp600)

APLN released their FY12 results booking a net profit of Rp812bn which is in-line with both ours (99.4%) and consensus’ (101.0%) estimates. The company has also booked in-line revenue and gross profit despite their below expectation operating profit and pretax profit.

On a yearly basis, APLN showed positive growths on their entire margin. However, their qoq margins were hit due to declining revenue by 2.1% while cost of sales grew by 20%. Higher than expected opex as well as lower than expected other incomes contributed to the below expectation operating and pretax profit.

Exciting projects are still coming from APLN including the 3 new projects in Jakarta & Medan as well as the Pluit reclamation project. We have a BUY rating on APLN. Looking at the company’s reputation as a fast asset churner and excellent product delivery, we still see good prospects on the company. Moreover, APLN is still cheap trading at 9.8x-7.8x PE13-14F vs. industry’s 16.2x-12.2x.

Mitra Adiperkasa FY12 in-line with our and consensus

Mitra Adiperkasa: FY12 in-line with our and consensus (MAPI, Rp8,250, Neutral, TP: Rp6.300)

FY12 NPAT of Rp433bn (+20.1%yoy) came in-line with our (100%) and consensus (97%) estimates. Net, gross, operating, and pretax profit were also within our and consensus’ estimates. Stripping-out FX gains/loss effect, core net profit came at Rp466bn (+21.7%yoy), accounting for 99% of our estimates.

FY12 NPAT showed a 20.1%yoy growth, as net sales rose 28.8%yoy. Bottom-line growth was milder as gross margin edged up lower to 50.9% (versus 51.7% in FY11). Operating costs increase (+28.0%yoy) was manageable as compared to the net sales growth (+28.8%yoy).

4Q12 NPAT of Rp150bn showed a 12.6%yoy and 29.2%qoq growth. The strong QoQ increase translated down from the 8.2%qoq increase in sales, which is normal as 4Q has always been the best quarter for MAPI amidst year-end holidays. On YoY basis, 4Q12 NPAT growth was also strong at 12.6%yoy, but was much milder than the 27.8%yoy net sales growth as effective tax rate in 4Q11 was low at 22.4% versus 26.4% in FY12.

MAPI opened 339 new stores in FY12 (versus 190 stores in FY11), adding a total selling space of 105,113 sqm or 23% of its existing space. This achievement is 40% higher than our 75,000 sqm assumption, due to loads of new space supplies in 4Q12 (i.e. Kota Kasablanka). FY12 SSSG came as expected at 14%, broken down as follow: 13% for department stores, 17% for specialty stores, and 9% for F&B.

This year, MAPI guided for a 25% top-line growth target with 100k sqm new selling space and 8-10% SSSG, still in-line with our current assumptions of 22% sales growth, 70k sqm new selling space, and 11.5% SSSG. Challenges are on margin maintenance (i.e. labor, electricity, and rental costs) and competition.

We will review our financial model to incorporate FY12 results, pending the release of full-notes financial statement. We currently have a Neutral call with Rp6,300/share target price. MAPI currently trades at 24.3x FY13F PE.

Indomobil Sukses Internasional Protected Downside

Indomobil Sukses Internasional: Protected downside (IMAS, Rp5,550, Buy, TP: Rp6,550)

We recently paid a visit to IMAS, discussing the latest update on key issues like tender offer progress and earnings outlook. We retain our Buy call as we view the tender offer price as a floor than a ceiling. While downside is protected, the upside could be rewarding, such as from the potential launching of All New Nissan Livina. Our key takeaways from the visit are summarized below. More details and other key issues are available in a Company Focus report released yesterday.

Tender offer progressOn March 4, Gallant Venture (GALV) has received SGX approval on IMAS acquisition. Referring to the latest indicative timetable, GALV expects to conclude the takeover on May 2. The tender offer, pending OJK approval, will proceed right after, no later than June 13 as the deadline. GALV has no intention to privatize IMAS, thus the tendered shares would be refloat back. Timeframe is not specified, but it is required to be within less than two years.

Earnings outlook
4Q12 results are likely below our and consensus, due to weak volumes and higher discounts. Discounts are still persistent; thus we expect some downside in our FY13F margins. We may also lower the mining contracting revenues, but thankfully this division contributes only about 5% to IMAS gross profit. Our FY13F NPAT is now 7% above consensus.

Upside from All New Livina
Assuming no new models, IMAS may revise down FY13 Nissan sales volume target from 90k to 80k units, making it in-line with ours. The revised guidance may turn out to be conservative if a new Livina is launched, which is very possible as the model is reaching the “usual” lifecycle (6-7 years). If a new Livina is launched, we think this could bring a surprise in 2013-14 Nissan volumes. Livina now is the biggest contributor to Nissan volumes with >3k units.

Maintain Buy
Share price downside is protected by the tender offer, but upside could be rewarding, in our view. While some see it as an overhang, we rather view the proposed Rp5,425/share tender offer price as a price floor than a ceiling. We also do not see strong intention for GALV to privatize IMAS. The stock now trades on 12.7x FY13F PE or 13.7x on consensus.

PT Dyandra Media International Tbk (DYAN) Oversubscribed 40.6 Times

After conducting the General Offer Period on 15 - 18 and March 19, 2013 to the public investor and analyze the results of incoming requests during the period the stock offering, the number of bookings excess 40.6 times from the pooling portion.

"Potential investors are very enthusiastic about the PT Dyandra Media International Tbk (DYAN), proven by a large number of applicants who apply for share on this 3 days of General Offer Period," said Iman Rachman, Director of Investment Banking of PT Mandiri Sekuritas who act as the underwriters in DYAN's IPO, in its press release today. It is also emphasized by Shiantaraga, Director of PT OSK Nusadana Securities Indonesia who along with PT Mandiri Sekuritas appointed as joint lead underwriters of PT Dyandra Media International Tbk's IPO.

With the stock offering price of Rp 350, - per share, the total funds raised by DYAN expected to Rp 448.7 billion from 1.282 billion new shares, equivalent to 30% of the capital issued and paid-up after the public offering. "The proceeds from the issuance of new shares will be allocated to spur the growth of DYAN's portfolio," as mentioned by Danny Budiharto, Director of Operations PT Dyandra Media International Tbk.



Listed as the official on the Stock Exchange on March 25, 2013

PT Dyandra Media International Tbk will be listed on the Stock Exchange as the issuer on March 25, 2013 with the stock code "DYAN". The company has received final approval to conduct Initial Public Offering (IPO) of the OJK ( Otoritas Jasa Keuangan / Financial Services Authority ) on March 13, 2013.

"Market participants see business opportunities in the field of MICE (Meeting, Incentive, Convention, Exhibition) in Indonesia is very good," said Danny Budiharto DMI as Director of Operations. He added that DYAN stock has a high value as investors hunted for a good long term investment for their portfolio.

The year of low strip ratio of United Tractors

United Tractors: The year of low strip ratio (UNTR, Rp17,300, Sell, TP:Rp17,000)

Feb’13 Komatsu sales volume of 412 units is within our expectation (2M13 Komatsu sales represent around 16.3% of FY). Interesting point from Feb’13 Komatsu sales compare to Feb’12 is Feb’13 Komatsu sales to all sector decrease yoy. Meanwhile, although demand from construction sector is expected to increase due to infrastructure story in Indonesia, Feb’13 Komatsu sales unit to construction sector decrease mom and yoy.

2M13 PAMA’s OB and coal production are within our expectation. As we expect, year on year growth in Overburden and coal production start to decrease since Feb’13 (Overburden yoy growth: 1M13=10.6%yoy vs 2M13=4.5%yoy. Coal production yoy growth: 1M13=19.0%yoy vs 2M13=12.7%yoy).  Strip ratio decrease to 8.12x in Feb’13 (vs 8.76x in Jan’13 vs 8.79x in Feb’12). Considering unfavorable spread between brent crude oil price (significant cost of mining) and coal price since the beginning 2012 would force PAMA’s clients to reduce their strip ratio, especially if current coal price, which lower than US$90 per ton, is sustainable.

Reiterate SELL recommendation. Although current share price of Rp17,300 almost reach our TP of Rp17,000, we think current slump in coal price to below US$90 per ton would make UNTR price to decrease further.

Adaro Energy Low Operating Margin

Adaro Energy: Weak 4Q12 results, Hit new record low margin- FY12 result 83%consensus
(Rp1,400/share, Under review)

Weak 4Q12 results. ADRO’s FY12 net profit was US$383mn (-30%YoY) and operating profit US$869mn (-32%YoY), 15% below consensus. Despite excellence 4Q12 operational performance with production up 7%YoY and 22%QoQ at 13.3Mt, bottom line only US$35mn (-80%YoY, -76%QoQ) as company expensed its deferred stripping cost of US$117mn from the US$160mn deferred stripping cost on the balance sheet as of 9M12, led 4Q12 COGS up 23%YoY and 32%QoQ to US$787mn. This is in line with our expectation, as we had highlighted such earnings risk following significant lower actual SR in 4Q12 at 5.8x (-32%QoQ) (see exhibit 1 and our previous email or report).

Hit new record low operating margin. ADRO has hit new record low 4Q12 operating margin of 12.8% since its listing  in 2008 (see exhibit 2). We have been highlighting Tutupan’s mine characteristic has showed peak cycle, resulting costly mine operations due to overhauling and challenging OB issues. ADRO’s 4Q12 ASP was US$65/ton (-18%YoY, -5%QoQ) while total cash cost remain high at US$52/ton (+9%YoY,+9%QoQ). Coal cash cost (ex royalty) in FY12 was reported up 9%YoY at US$39/t vs ASP down by 4%YoY at US$70/t. Higher total cash cost in ADRO also part of higher contribution from expanding SIS’s business, which relatively has lower profitability. Lower utilization rate on fleets at this juncture and significant higher labor cost increased which up 114%YoY to US$49mn.

2013 Outlook remain challenging. ADRO’s aiming FY13F EBITDA of US$850mn- 1.0bn, or about 23% lower for the low end. Company is also seeking to lower SR to’s 5.8x and lowering coal cash cost (ex royalty) of US$35-38/t. OPCC and mine mouth power plant are expected to commission in May/June 2013.  Company plans to reduce capex spending and slow big spending on the development of its new coal acquisitions to preserve cash. But with higher debt which up 16%YoY to US$2,445mn, effective higher salary wage for labors in 2013 will increase the fixed cost portion and may tweak margins further. FY13 earnings also still expose to remaining US$43mn deferred stripping cost on the balance sheet.

Our take: Bottom line matters, not EBITDA - Albeit Company highlighted it has hit the low end EBITDA target of US$1.1bn, what matters for Investors is the earnings or bottom line delivery as it affects the dividend income or yield for shareholders. Ironically ADRO known as the low cost producer reported lower operating margin vs high cost producers such as ITMG which recorded 4Q12 operating margin of 16%.

In our view, vertically integrated into mining contracting business (SIS) not necessarily value accretive to shareholders especially in a structural shift and bearish market, in fact as it’s highly capital and labor intensive with higher fixed cost portion, it has double impact to bottom line. ADRO’s mining services cost % to revenue has surged significantly up to 7% of total revenue, the highest in the last 4 years (see exh. 4). In addition, with the new minimum wage 40-50% increase effective in 2013, it should give additional burden to SIS’s operational costs, eventually affect ADRO.

We believe that change in mine plan by lowering planned SR from 6.4x to 5.75x likely to affect its minelife reserves in our view. With Newcastle spot rate below US$90/ton, ADRO’s FY13 contract pricing sounds tight and earnings outlook remain challenging. Assuming EBITDA-net profit sensitivity ratio in  FY12 at 1.2x maintained, then we may see potential downside of 27-28% lower bottom line in FY13 based on Company’s low end EBITDA guidance or at about US$300mn, implying 15.4x FY13 P/E vs Consensus at 12.0x.  We still see SELLING PRESSURE on the stock as earnings downgrade from street may continue for FY13F. Currently we’re still in a process reviewing our coal sector coverage including ADRO.

Pharmaceutical National health insurance coverage propsed

Indonesia Pharmaceutical: National health insurance coverage is agreed at Rp15,500/capita/month, lower than previously proposed figure at Rp22,200

Local newspaper Investor Daily reported that the government has, on a meeting yesterday, agreed to cover the national health insurance for the low-income segments at Rp15,500/capita/month, leading to a total budget of Rp16.7tn to be allocated in the upcoming 2014 state budget. The insurance recipients would cover a total of 86.4mn people, representing an addition of 10mn people from 2013 budget.

The approved figure is lower than our previous understanding for a coverage of Rp19,286-22,201 per capita per month, but it has nevertheless indicates the government’s eagerness to carry out the SJSN program. The approved number is about 2.4x higher than the current subsidy of Rp6,500/capita/month. According to the blue print that KLBF shared to us, the population coverage would increase from 86.6mn in 2013 to 140mn in 2014 and 245mn in 2019.

When we attended KLBF’s analyst meeting, we were also guided that in the short-term, generic drugs industry may grow 20-30% as a result of SJSN, higher than the total pharmaceutical industry growth of around 13-15% p.a. Requirements of state-owned government health facilities to prescribe for generic drugs would also support the growth of this segment, particularly when the government starts increasing its healthcare budget to GDP ratio that currently is among the lowest.

KLBF clearly has been preparing to penetrate the fast-rising generic drugs industry. A new generic drugs production facility in Cikarang has been completed in February 2012. Despite its thinner gross margin, we believe that unbranded generics are still appealing based on its massive volume potential and relatively decent operating margin (as no ads spending is required as compared to the branded drugs). Nevertheless, the impact to KLBF’s earnings would be very insignificant in the near-term, as unbranded generics only contributes less than 3% of KLBF’s revenues at the moment. At the current 32.6x FY13F PE, we do not see KLBF as attractive. We currently have a Sell call on the counter, while reviewing our target price.

PT Timah (Persero) Tbk Lower Production Volume

Timah:  Weak FY12 results - 80% of consensus (Under review)

FY12 results below consensus. TIN recorded FY12 net profit of Rp432bn (-52%YoY), accounts 80% of consensus. Weak results mainly due to lower production volume at 29,512Mt (-23%YoY) and lower ASP of US$21,505 (-19%YoY). In 4Q12 TINS produced less refined tin at 6,257Mt (-35%YoY, -24%QoQ) however bottom line up significantly to Rp62bn (+67%YoY, +81%QoQ) mainly driven by gross margin improvement to 7% vs 4% in previous quarter thanks to higher ASP and forex gain amounting Rp15bn.

2013 Outlook: lower production volume. To align with trade ministry regulation no 78/2012, which only allow tin export with minimal 99.9%Sn grade effective per July 2013 and to push down illegal refined tix export, production volume for FY13 likely to be lowered. Company expects global tin consumption may grow modestly at 5-6%YoY and guides LME tin price in FY13 flat at US$21,500/t. We believe reserves one of the main concern on TINS, therefore  company plans to expand overseas to conduct more exploration activities in Burma as it has crossed over ‘Asia tin belt’ and has potential huge reserves that has not been managed properly yet.

Currently we’re in a process reviewing the stock rating and forecast. Based on the consensus, TINS traded at 10.6x FY13 P/E.

Bumi Serpong Damai Closing FY12 with a strong net profit

Bumi Serpong Damai: Closing FY12 with a strong net profit of Rp1.3tn which is above consensus’ estimates (109.7%) (BSDE: Rp1,720, Under review)

BSDE has shown a stellar performance in FY12 recording a net profit of Rp1.3tn (+53.0% yoy, -2.7% qoq) which is above consensus’ estimates (109.7%). Although the company’s revenue and gross profit are relatively in-line with ours and consensus’ estimates, BSDE gained an edge from lower than expected opex and increasing other incomes.



Booking of marketing sales was the key driver of the growth in BSDE revenue. The company has shown 35% CAGR in marketing sales from 2010-2012. Sales was significantly pushed by hike in ASP particularly in Taman Permata Buana and BSD City. We believe that further ASP boost in Serpong as well as new project launchings will be the key catalysts for BSDE in 2013.

Under opex, we see that BSDE has managed to record a lower than expected selling expense which proven to help the company’s operating income. The company also recorded a one-time gain from subsidiary acquisition of Rp96.6bn as well as gain from sale of property investment of Rp28.1bn. These further helped boosting BSDE’s bottom line.

We see a number of exciting projects coming from BSDE ranging from new residential clusters, JV with Hongkong Land and Aeon Mall Japan, as well as the newly acquired land in Rasuna from ELTY. We believe that BSDE is going to the right direction by taking the opportunity to diversify their product portfolio.

We are still waiting for the company’s full financial statement for further analysis and we will review our forecast. BSDE is currently trading at PE13-14F 23.7-20.7x; 28% discount to RNAV13 vs industry of 30%.

For today March 22 2013

Modernland acquiring land to further develop industrial estate

Modernland (MDLN) is serious in acquiring land 1,300ha and 1,000ha in Jakarta and Banten respectively, to develop their industrial estate. In Eastern Jakarta, the company is planning to acquire 750ha this year first and the rest next year. MDLN will develop industrial estate on half of the land and a residential on the other half where construction will take 2 years. Meanwhile in Banten, MDLN is planning to add 1,000ha to its Modern Cikande industrial estate. The company stated that they will acquire 400ha next year and 200ha in 2015. MDLN expects land sales of 100ha per year. CAPEX for this year is allocated at Rp1.9tn from land sales and internal cash, while revenue is targeted to be Rp2tn. (Kontan)

Modernland (MDLN) issuing USD150million bond

Bank Tabungan Pensiunan Nasional - Mitsubishi has little interest to acquire BTPN

In contrast to the earlier news, Bank of Tokyo-Mitsubishi UFJ said that there is small chance for the group to acquire Bank Tabungan Pensiunan Nasional (BTPN) from TPG Group. They however stated that they were looking at several small and mid-sized banks to be acquired to increase the penetration in the Indonesian market. Comment: this leaves another Japanese group, Sumitomo Mitsui, is the only group that may acquire BTPN, currently 57.9% owned by TPG Group. With the market cap of US$3.1b the bank is trading at 3.0x P/BV 2013 consensus.
Bank Tabungan Negara results in line with expectations

Chili price on the rise

Investor Daily newspaper reported that while garlic price is easing though not significantly, chili price is gaining pace. The Ministry of Agriculture is investigating whether it is cause by supply scarcity or market manipulation. However, the ministry’s Vice Minister Rusman Heriawan suspect weather as the culprit (Investor Daily)

The government considers to cut capital spending budget

 The Minister of Finance Agus Martowardojo expressed that underachieving state revenue due to external pressure and exports weakening and potentially swelling subsidized fuel are risking an increase in state budget deficit which currently set at 1.65% of GDP or Rp153.3tn in 2013. Therefore, The Ministry of Finance considers to cut ministerial/institution budget including capital spending if subsidized fuel rationing and consumption control programs are not able to meet target. This is considering historical track that very few ministerial/institution spending realization can achieve 90% of budget. Consequently, there may be a downward revision in 2013 economic growth projection. The government aims for 6.8% economic growth this year (Bisnis Indonesia)

Industrial and finance ministers have signed the low carbon emission program draft regulation

Industrial Minister M.S. Hidayat and Finance Minister Agus Martowardojo reportedly have signed draft regulation on low carbon emission program, the umbrella of LCGC. It is further stated that the draft must be signed by three other ministers before it is submitted and signed by the President. The government previously hinted for the regulation to be out this month. (Bisnis Indonesia)

Indonesia Tax Revenue Increased 9% until Feb13

Indonesia Tax revenue increased 9% until February 2013

The realization of government tax revenue until end-Feb13 increased 9% yoy to Rp117tn and equivalent with 11.3% of its planned revenue of Rp1,042tn this year.

The biggest share came from income tax, reaching Rp59tn (+5.4% yoy) followed by value added and luxury goods tax amounting Rp51tn (+17% yoy). On the other hand, oil and gas income tax trimmed to Rp5.8tn from Rp7.1tn in the same corresponding period (Investor daily).

The government accelerates horticulture goods imports

The government accelerates horticulture goods imports

The Ministry of Agriculture reportedly will accelerate the second open application for horticulture goods imports next month so the import license from the department (RIPH) will be released in Jun13.

Previously, the license for Jan-Jun13 import period came out late in Mar13 and resulted in soaring garlic price. (Kontan)

Woori Bank to acquire Bank Saudara

Woori Bank Korea (WBK) and PT Bank Woori Indonesia (BWI) announced their plan to take over 33% shares of PT Bank Himpunan Saudara 1960 Tbk (SDRA IJ).

WBK and BWI will take over 27% (625mn shares) and 6% (138mn) from Arifin Panigoro and PT Medco Intidinamika, respectively, that will reduce their ownership in the acquired bank to 27.27% and 3.68%. Bank Saudara focuses on the retirees and SME which will be strengthened further.

Comment:
The acquisition price and timing has yet to be decided but as of December 2012 book value per share of Bank Saudara is Rp232 versus Rp204 in December 2011. With the 33% acquisition of SDRA IJ we believe there will not be any tender offer but this does not stop them to acquire more in the future if they are allowed by the authority. (Kontan)

Modernland (MDLN) issuing USD150million bond in 2Q13

MDLN issuing USD150mn bond in 2Q13

Modernland is planning to issue a USD 150mn bond in 2Q13 which will be listed in the Singapore Exchange. According to the company, the interest rate on global bond is now cheaper than rupiah bond.

The proceeds will be used for land acquisition which will be developed to be an industrial and residential estate. (Investor Daily)

Comment:MDLN expects a net profit of Rp808.7bn in 2013. Issuing the bond will bear the company around Rp172.8bn of interest expense and hedging cost. Thus, dragging down their net profit to Rp635.9bn.

Honda Prospect Motor remains optimist to achieve 2013 target

Honda 4W remains optimist to achieve 2013 target

Honda Prospect Motor, the dealership of Honda 4W, remains optimist to achieve 2013 sales target of 100,000 units (+42.83%yoy). Until 2M13, realization has reached 18% to the full-year.

To support growing sales, Honda will increase its annual production capacity from 60k units to 80k units this year. The company also expects to complete its new 120k units/year factory capacity before April 2014, thus making total production capacity to 200k units/year. (Bisnis Indonesia)

Domestic Motorcycles sales is projected to be flat

Domestic 2W sales is projected to be flat in 1Q13

Indonesian Motorcycles Industry Association (AISI) expects 1Q13 domestic 2W sales to hover at around 2mn units, flat as compared to last year. For the full-year, AISI also expects 2W sales to contract 11% to 6.3mn units, versus actual 1%yoy drop in 2M13 sales. (Bisnis Indonesia)

Adhi Karya Monorel update

Adhi Karya: Monorel update (ADHI, Not rated, Rp3000)

A newspaper reported yesterday that PT Jakarta Monorel (JM) has agreed to acquire monorel pillars that has been constructed by ADHI previously. The agreed figure came at Rp190bn, which was higher that the government audit body (Rp130bn), but a bit lower than ADHI appraisal’s figure (Rp212bn). JM will then report this agreement to Jakarta Governor to start the monorel construction process. JM management also indicated that payment to ADHI will be completed in the next two weeks.

It was also just revealed that Edward Soeryadjaya, the brother of Edwin Soeryadjaya of Saratoga, is backing up the project through Ortus Holding Ltd (majority shareholder of JM).

Based on our last meeting with ADHI, the company has taken full provision on the works related to the project. As a result, any recoverable amount from this project will go directly to ADHI bottom line. The management guides Rp454bn net earnings this year, which has not taken into account this recoverable payment. Therefore, earnings surprise is possible due to the payment from JM.

Astra Otoparts would raise a maximum proceeds of IDR 3.1T

Astra Otoparts would raise a maximum proceeds of Rp3.1tn through a rights issue

Astra Otoparts (AUTO), a subsidiary of Astra International (ASII), will conduct rights issue and raise a maximum Rp3.1tn of proceeds. The company would also conduct an AGM on 17 April 2013.

Key details of the rights issue are as follow:

• AUTO will issue a maximum of 1.4bn of rights, potentially raising a maximum proceeds of Rp3.1tn
• Every 100 of existing shares are entitled for 20 to 40 rights with exercise price range of Rp2,200-3,400/share
• Key indicative timetables are set as the following: ex-right date on 25 April 2013, exercise date on 1-7 May 2013
• About 74% of the net rights issue proceeds would be used for early debt repayment, and the remaining 26% for business expansion in the form of equity participation and/or loans to subsidiaries and/or associates companies and/or jointly-controlled entities.

Daihatsu targets 200k units of sales this year

Daihatsu aims to book 200k units of sales this year, implying a 23.4%yoy growth. The target includes some portion of LCGC and exports sales. In supporting the growth, Daihatsu is completing a new 120,000 units/year assembling plant that is expected to commercialize in 1Q13. The new factory will increase its total assembling capacity to 460k units/year, making Daihatsu as the largest assembler domestically. (Investor Daily)

PT Express Transindo Utama Tbk to hold AGM and EGM on April

PT Express Transindo Utama Tbk to hold AGM and EGM on 29 April 2013, with intention to alter its IPO proceeds spending allocation

On a press release to the IDX yesterday, Express Transindo Utama (TAXI) stated that the company would conduct AGM on 29 April. On the same date, TAXI would also hold an EGM to discuss two topics: a) the company’s intention in altering its IPO proceeds spending allocation plan, and b) the approval for collateralizing majority or the entire of its assets for obtaining more external debt financing.
(Company)

PT Semen Gresik Tbk aiming for 72% of East Java market

PT Semen Gresik Tb (SMGR) aiming for 72% of East Java market

Semen Indonesia this year targets sales of 1mt or 72% of the market in East Java, including in Surabaya, Gresik, Sidoarjo, and Mojokerto. Last year, the company recorded sales of 878,000 ton with a market share of 70% in the region. According to the company, the growth is based on the rising national cement consumption which is expected to be around 14% yoy.
(Bisnis Indonesia)

PT Dyandra Media International Tbk Offering Prime Shares to the Public

Period of Initial Public Offering: 15,18,19 March 2013

PT Dyandra Media International Tbk (DYAN), also knows as DMI, has been officially declared effective by the Financial Services Authority to conduct an Initial Public Offering (IPO) on March 13, 2013, to mark the DMI has been able to sell shares to the public.

Therefore, commencing on 15, 18 and March 19, 2013, DMI implement the initial public offering to all prospective investors and the general public. Locations of offering conducted in Bapindo Plaza. Mandiri Sekuritas and OSK Nusadana Securities Indonesia as the underwriters of the stock issuance will opening the outlet from 08:00 to 15:00 each day during the public offering.

 

"We are optimistic that the IPO shares will get a positive response from all prospective investors and the general public, as reflected by the feedback was very enthusiastic in bookbuilding period began on February 19, 2013 until March 5, 2013. Moreover, it is supported by the company's position as the market leader in the sector of service industry MICE (Meeting, Incentive, Convention, Exhibition) in Indonesia that continues to grow along with a variety of events handled by DMI. Coupled with the structure and IPO valuations are very attractive to investors, "said Lilik Oetama, President Director of DMI in a press release today.

In this IPO, DMI offered the total number of shares as 1.282 billion new shares at a price of Rp. 350,- per share. DMI hopes from this IPO, could obtain fresh funds amounting to Rp 448,7 billion. "The funds raise from IPO (net proceeds) will be directed to support the development of the company's operations, whether development of DMI's subsidiary, principal repayment of bank debt and working capital," said Lilik Oetama. This year, DMI is developing three buildings, the second phase of Bali Nusa Dua Convention Center (BNDCC) which covering 25,000 square meters, building development of Indonesia International Expo in Bumi Serpong Damai (BSD) South Tangerang, Banten and building development of Makassar International Convention Center located in the Tanjung Bunga
Makassar, South Sulawesi.

The next stage after stock offering, DMI will make allotment of shares on March 21, 2013. And the culmination of the IPO is DMI's shares become a stock listed issuers in Indonesia Stock Exchange with code DYAN on March 25, 2013.

PT Unilever Indonesia Tbk prepares IDR 1 triliun Capex

PT Unilever Indonesia Tbk (UNVR) prepares Rp1tn CAPEX to expand distribution network and ice cream market

Smaller compared to 2012 CAPEX allocation of Rp1.2tn, this year UNVR is allocating Rp1tn to develop their ice cream market as well as expanding their distribution network. Funding will come from internal cash and bank loans. UNVR is confident that the ice cream business will grow by double with the company still being in the lead with a market share of 47.8%.
(Bisnis Indonesia)

IHSG Positive - Transactions Reached IDR 7.3T

Jakarta Composite Index ( JCI / IHSG ) closed in the green zone Tuesday (19/3). RTI Data shows, at 16.00, the index recorded up 0.41% to 4822.627.

There are about 163 stocks that support the index movement. Meanwhile, the number of stocks fell as much as 102 and 93 stocks stall. The volume of transactions today involve 10.687 billion stocks worth Rp 7.303 trillion.

There are five sectors that give the green signal. Three of them are: the construction sector rose 1.51%, the financial sector rose 1.15%, and the trade sector rose 0.47%.

The top gainers position this afternoon include:

• PT Rimo Catur Lestari Tbk (Rimo) rose 4.51% to Rp 191
• PT Sunson Textile Manufaktur Tbk (SSTM) rose 32.06% to Rp 173
• PT Toko Gunung Agung Tbk (TKGA) rose 25% to Rp 600.

The top losers:

• PT Duta Pertiwi Nusantara Tbk (DPNS) fell 19.3% to Rp 460
• PT Plaza Indonesia Realty Tbk (PLIN) decreased 16% to Rp 1470
• PT Cardig Aero Services Tbk (CASS ) fell 8.64% to Rp 740.

(Kontan)

Three major bank stocks dropped the JCI

In the second session today (14/3), Indeks Harga Saham Gabungan ( IHSG /  JCI ) is still unable to strength. At the close of trading, stock index trimmed 0.34% to a level of 4802.83.

Investors sold mainly for three blue chip stocks following:

Three major bank stocks dropped the JCI

• PT Bank Rakyat Indonesia Tbk (BBRI)
  
  BBCA prices plunged 2.84% to Rp 8.550,-. A number of securities to sell most of the bank's stock are CLSA Indonesia worth USD 132.6 billion, JP Morgan Securities Indonesia Rp 93.88 billion, and Krishna Graha Sekurindo Rp 38.72 billion.
• PT Bank Central Asia Tbk (BBCA)
  
  BBCA fell 0.93% to Rp 10,650. Biggest selling are Kim Eng Securities Rp 55.51 billion, Indo Premier Securities Rp 41.32 billion, and JP Morgan Securities Indonesia worth Rp 12.19 billion.
• PT Bank Mandiri Tbk (BMRI)
  
  BMRI lose 1% back to Rp. 9.900,-. Securities which posted the highest sell are Citigroup Securities Indonesia Rp 20.41 billion, Kim Eng Securities worth Rp 12.06 billion, and Credit Suisse Indonesia worth Rp 10.85 million. (Kontan)

Data from JCI Today March 18 2013

Largest profits:

• PT Astra Agro Lestari Tbk (AALI) + Rp300 to Rp18.250
• PT Nippon Indosari Corporindo Tbk (ROTI) + Rp300 to Rp7.350
• PT Toko Gunung Agung Tbk (TGKA) + Rp300 to Rp3.700

Biggest loss:

• PT Merck Tbk (BRAND) -Rp 2,000 to Rp 150,000
• PT Indo Tambangraya Tbk (ITMG) -Rp900 to Rp39.450
• PT Gudang Garam Tbk (GGRM) -Rp800 to Rp48.450

Regional Markets Conditions:

• Japan's Nikkei 225 -2.71% to 12,220.63
• South Korea's Kospi -0.92% to 1,968.18
• Australia's S&P / ASX 200 -2.05% to 5,015.40
• Hang Seng -2.00%, to 22,083.36

JCI Closed on Correction 0.34% to 4802.83

MARKET: JCI Closed on Correction 0.34% to 4802.83

Indeks harga saham gabungan ( IHSG / JCI ) trading on Monday (3/18/2013) closed down 16.50 points, or 0.34% to level 4802.83.

The index bearish due to negative sentiment from global and regional in the range of 4782.00 to 4822.20.

On the other hand, the exchange rate closed lower against the U.S. dollar Rp. 9,- or 0.09%, at Rp9.715/USD.

The majority of Asian markets today move in the red zone due to negative sentiment of levy policy on bank deposits by the government of Cyprus in order to obtain bailouts.

The weakening JCI today triggered by negative move of six sectors, led by the mining sector. Four sectors which positively move are agricultural sector, various industrial, consumer, and manufacturing. (Bisnis Indonesia)

JCI's Data on March 18 2013

Surya Internusa Fantastic Profit

Surya Internusa recorded a fantastic profit up 165.52%

PT Surya Semesta Internusa Tbk (SSIA), an industrial zone developer posted net profit during 2012, Rp 738,62 billion. Up 165.52% from the performance of 2011, Rp 278,18 billion.

Totaling of Rp 707,25 billion attributable to the parent entity and the remaining of Rp 31,37 billion attributable to non-controlling interests.

Net earnings per share of the company had come up to Rp 150 per share from the previous year, Rp55 per share.

Based on the company's financial statements by December 31, 2012, published today, Friday (03/15/2013), net profit growth was driven by operating income and other income.

The net profit margin for SSIA in the period January to December 2012 stood at Rp 3,56 trillion, up 23.82% from the previous year's performance, Rp 2,88 trillion.

Meanwhile, other income recorded jumped to Rp 43,81 billion from the previous year, Rp 9,94 billion. This also surged 114.43% to 20.72% from the previous year, 9.66%.

Cost of revenue of the company recorded Rp 2,27 trillion, up 8.23% from the previous year's performance, Rp 2,1 trillion.

Income before taxes was recorded Rp 877,96 billion, up 127.99% compared to the performance of the same period of 2011 at Rp 385,09 billion. (Bisnis Indonesia)

PT HM Sampoerna Tbk Posts Net Income Rp 9,95 trillion

Aggressively in the retail market, PT HM Sampoerna Tbk (HMSP) Posts Net Income Rp 9,95 trillion

PT HM Sampoerna Tbk net profit during 2012 of Rp 9,95 trillion, rose 23.32% from the previous year's performance of Rp 8,06 trillion.

The earning per share rose to Rp 2.269 per share from the previous year of Rp 1.840 per share.

Based on the company's financial statements as of December 31, 2012, published today, Friday (03/15/2013), net profit growth was driven by sales performance grew 26.05% to Rp 66,63 trillion compared to 2011  performance, Rp52,86 trillion.

However, the net profit margin of the Indonesia's biggest cigarette manufacturer down 2.16% to 14.93% compared with the same period the previous year as of 15.26%.

HMSP's Cost of revenue was recorded up 27.8% to Rp 48,12 trillion from the previous year's performance, Rp 37,65 trillion. Profit before tax rose 22.66% to Rp 13,38 trillion from 2011 performance, Rp 10,91 trillion.

Surya Internusa Fantastic Profit

Surya Internusa recorded a fantastic profit up 165.52%

PT Surya Semesta Internusa Tbk (SSIA), an industrial zone developer posted net profit during 2012, Rp 738,62 billion. Up 165.52% from the performance of 2011, Rp 278,18 billion.

Totaling of Rp 707,25 billion attributable to the parent entity and the remaining of Rp 31,37 billion attributable to non-controlling interests.

Net earnings per share of the company had come up to Rp 150 per share from the previous year, Rp55 per share.

Based on the company's financial statements by December 31, 2012, published today, Friday (03/15/2013), net profit growth was driven by operating income and other income.

The net profit margin for SSIA in the period January to December 2012 stood at Rp 3,56 trillion, up 23.82% from the previous year's performance, Rp 2,88 trillion.

Meanwhile, other income recorded jumped to Rp 43,81 billion from the previous year, Rp 9,94 billion. This also surged 114.43% to 20.72% from the previous year, 9.66%.

Cost of revenue of the company recorded Rp 2,27 trillion, up 8.23% from the previous year's performance, Rp 2,1 trillion.

Income before taxes was recorded Rp 877,96 billion, up 127.99% compared to the performance of the same period of 2011 at Rp 385,09 billion. (Bisnis Indonesia)

Waskita Karya reports Soaring Profits

Revenues up 21%, Waskita Karya reports Soaring Profits

PT Waskita Karya Tbk posted net income amounted to Rp 254,03 billion during 2012, up 47.7% from the performance of 2011, Rp 171,99 billion.

Along with that, earnings per share rose to Rp 38 per share from the previous year, Rp 9,56 per share.

Based on the company's financial statements as of 31 December 2012 which was released today, Friday (03/15/2013), net earnings performance was driven by revenue growth of 21.09% to Rp 8,81 trillion from the previous year Rp 7,27 trillion.

The company recorded a net profit margin rose 21.98% to 2.88% from 2.36% the previous year.

Unfortunately, the cost of revenue is large enough, Rp 8,08 trillion, up 21.09% from the previous year Rp 6,61 trillion. Profit before tax was recorded Rp 459,91 billion, up 38.6% from 2011 performance of Rp 331, 83 billion. (Bisnis Indonesia)

IHSG Could Potentially Break Its Record Again

IHSG (JCI) could potentially break its record again after correction.

After driving in the green zone on the trading session I, analysts predict Indeks Harga Saham Gabungan ( IHSG / JCI ) will still be bright in the trading session II. Potential net buying will lift the JCI.

Stock market analysts from Millennium Danatama Securities, Mr. Probo Sujono, said that JCI is still potential to strengthen. According to him, the correction trading index for nearly a week is enough. This was back when the trade show its movement. He added, the accumulated net buy will adorn trades this weekend.

"Net buy expectations are wide open. Foreign investors will put their money back," said Probo on Friday (15/3).

He added that the possibility of JCI session II will be in the range of 4803 to 4860. He estimates that the infrastructure sector will drive while the mining sector weakened in session II. While stocks that he recommended, such as Bukit Sentul City (BKSL) and Bekasi Fajar Industrial Estate (BEST).

In line with Probo, Mr. Willy Sanjaya, Lautandhana Securities analyst, also estimates that JCI potentially closed with a new record. "The potential of IHSG to reach 5,000 is still wide open. Next week IHSG (JCI) could be advanced to that figure," he said.

Furthermore Willy said, JCI will be in the range of 4815 - 4865. He championed the property and banking sector stocks, as well as infrastructure and construction sector stocks. (Kontan)

Sinarmas Securities Recommendation for March 14 2013

Sinarmas Securities RECOMMENDATION: INTP, BTPN, ADHI & WIIM

In trading Thursday (14/3), we expect Indeks Harga Saham Gabungan ( IHSG / JCI ) will move down in the range of 4811-4864. Note INTP, BTPN, ADHI, and WIIM.

Factors which driving the index from the country, we thought was the government's plans to change the policy of fuel subsidy.

From abroad, the data on the euro zone's industrial production is expected potential to fall, giving a sentiment to index movement. Note the retail sales data and U.S. export-import.
(Bisnis Indonesia)

JCI may not necessarily follow the strengthening of Wall Street

Indeks Harga Saham Gabungan (IHSG) or Jakarta Composite Index (JCI) has not necessarily follow the Wall Street movement who scored a record the longest rally since 1996. The Analysts calculate technically, is not as easy as global stock benchmark for JCI to score record.

ETrading Securities Head of Research, Betrand Raynaldi referring to the previous day. "Technically, JCI's decline is part of the consolidation," he described.

He predicted, in trading today (14/3) JCI is expected to be weakened, where it is seen from indicators that generate a bearish signal. "The index is expected to move in the range of 4750-4900 with stocks that can be considered include INDY, INTP, and MAPI," he said.

Muhammad Wafi, Indo Premier Securities analyst observed, the index was again corrected uptrend in the area and the opportunity to enter a bearish trend.

"JCI predicted to potentially weaken the support in 4750 and resist in 4900," he said.

In this condition, he recommended several stocks.
Among these are: INTP (buy), BISI (buy), KLBF (buy on weakness)
(Kontan)

Matahari Divestment - Asia Color Sell 24.9% Stake to Multipolar

Asia Color Company Ltd has sold 726.56 million shares or 24.9% stake of PT Matahari Department Store Tbk to PT Multipolar Tbk.

Director Asia Color Company Wai Hoong Fock said that the sale of stake of Matahari Department Store to Multipolar held on March 8, 2013.

"The purpose of the transaction is in the framework of the implementation of the internal reorganization," he said in a disclosure on Wednesday (13/03/2013).

He said that the purchase transaction was conducted at Rp1.216 per share by the number of shares as 726.56 million or equivalent to 24.9% of the total shares issued and it will be paid in full.

Asia Color is an indirect subsidiary of CVC Capital Partners through Meadow Asia Co. Ltd.. Based on the Stock Exchange, shareholding of Asia Color in Matahari reaches 98.15%.

Later widely reported about CVC's plans to dump its stake in old supermarket owner with Matahari brand. At least 15 foreign investors, including Temasek Holdings is rumored to participate in the bidding divestment Matahari.

Divestment of Matahari has the potential to be the largest ever in Indonesia since the rights issue U.S. $ 4.4 billion by PT Bakrie & Brothers Tbk in April 2008.

ANTAM's Gold Price Rise For Buyback

ANTAM's Gold Price rise Rp6.000/gram For Buyback

Retail gold prices in Indonesia today, Wednesday (13/03/2013), rose Rp6.000/gram for buyback and Rp1.000/gram for the selling price from the gold price set by PT Aneka Tambang (Antam).

Price list pegged by PT Aneka Tambang at 8:11 pm is Rp526.000 to Rp565.200/gram. Price levels Rp526.000 for purchase 250 grams gold bullion, while Rp565.200 for 1 gram, and the Antam's buyback price set Rp495.000/gram for each gold bullion product that officially certified PT Antam.

In the global market, Comex Gold Bloomberg index - which refers to the New York commodity exchanges - shows the fluctuated gold price but broke through the level of U.S. $ 1,592.40 / ounce.

The World's gold futures price rose USD 0.02 to USD 51.20 / gram at 19:09 am New York time or 7:09 pm Indonesia time. With an exchange rate of Bank Indonesia on Monday (03/11/2013) Rp9.688 for USD 1, the price of gold rose Rp194/gram to a level Rp496.026/gram. (Bisnis Indonesia)

Domestic INTP Sales Rise but Exports Sag

PT Indocement Tunggal Prakarsa Tbk (INTP) managed to hoist the cement sales last year by 12% compared to the year 2011. This increase was mainly contributed by the increase in domestic sales, while the exports fell 84.5%.

Throughout 2012, INTP sold 17.98 million tonnes. Cement sales to the local market increased 16.1% compared to the year 2011. This figure is also higher than the national cement market growth of only 14.5%. Therefore, Indocement controls 32% market share of cement in 2012.

However, exports of cement INTP actually dropped 84.5%, from 613 000 tonnes in 2011 to 95,000 tons in 2012. "Because Indocement more focus to meet high domestic demand," the company wrote in a public expose in the disclosure of material information exchange.

INTP posted revenue of Rp 17.29 trillion, up 24.5% from the year 2011 which only reached Rp 13.88 trillion. In addition due to increased sales volume, growth was also driven by higher selling prices of cement an average of 7% in 2012.

Along with that, the cost of revenues recorded INTP 21% higher than in 2011. The increase is one of them contributed to higher energy costs. INTP's operating expenses also rose 21% due to logistics costs driven by increased sales volume and transportation volume.

Even so, INTP still obtain additional other operating income, Rp 32 billion. This is an INTP income received from the World Bank over the certified emission reduction units (Certified Emission Reduction units / CER). Thus, INTP net profit in 2012 amounted to Rp 4.76 trillion, up 32.2% from a year earlier. (Kontan)

Bank Jatim - Net Profit Down 15.76%

PT Bank Pembangunan Daerah Jawa Timur Tbk (Bank Jatim) posted 15.76% net income decline to to Rp724,64 billion during 2012, compared with the performance of 2011 of Rp860,23 billion.

The company's Earnings per share is also fell to Rp56,81 from the previous year of Rp99,81 per share.

Meanwhile, the company's total assets rose to Rp29,11 trillion from the previous year of Rp24,85 trillion. (Bisnis Indonesia)

OCBC NISP Accelerate Repayment of Subordinated Bonds II 2008

PT Bank OCBC NISP Tbk plans (on March 12, 2013) to use the right of repurchase (call option) subordinated bonds II 2008, Rp600 billion.

Based on data from PT Kustodian Sentral Efek Indonesia, the bonds which will be bought back will be due on March 11, 2018.

Debt securities issued in March 2008, gave 11.1% fixed coupon payable every 3 months. Since its publication, the company have made the payment coupon 20 times. (Bisnis Indonesia)

PTPP Achieved The target of 12% of The New Contracts on Febrary 2013

PT PP (Persero) Tbk (PTPP) is planning some corporate action this year. One of the action is to establish two subsidiaries.

The plan was made ​​by PTPP to maintain sustainable growth. Each will focus the business on property and the production of precast concrete.

PTPP budgeting the capital expenditure (capex) of Rp 460 billion. In addition to corporate actions forming two subsidiaries, capex budget is also intended as a venture capital investment in power plants, toll roads, and ports. This year PTPP also targeting net profit to reach Rp 370 billion. (Kontan)

Gold Prices Fell as the U.S. Economy Improves

Entering the third day, The price of gold fell after demand for safe-haven assets is reduced as the U.S. economy (U.S.) seen improved.

The Spot Gold retreated 0.2% to USD 1,575.68 per ounce and traded at USD 1,576.86 in Singapore, while the power of the dollar index of six major currencies in the global market. (Kontan)

Indo Tambangraya Megah Key takeaways from analyst meeting

Indo Tambangraya Megah: Key takeaways from analyst meeting (Under review)

What’s new? Indominco’s cash production in 1Q13 sounds challenging as strip ratio (SR) jumped significantly, in West Block up 38%QoQ to 19.2x and East block up 25.6%QoQ to 9.3x, as company moves to mine new area to maintain high CV products. Company indicated slightly lower ASP in 1Q13 from previous quarter at US$81/t. But, bottom line may be helped by higher production volume which up by 17%YoY to 6.7Mt mostly driven from Trubaindo and Bharinto mines.

Company has changed its 2013 pricing strategy. From 77% contracted volume, ITMG only locked 44% volume at fixed pricing with indicative price of US$80-82/ton (vs historically the norm was about 55-65% fixed pricing in early year), as company expects recovery in coal prices and would like to grab the upside opportunity.

Company plans to release the updated reserves numbers by mid of this year following the new exploration activities and changing in mine plan. Albeit company highlights its exploration activities, we still sense the potential downside on its reserves number due to potential lower coal price benchmark and lower SR as mine plan changed.

ITMG remain bullish on Chinese coal demand.  Marketing director, Mr Hartono, remains bullish for China coal demand in 2013 as China coal import in November and December 2012 jumped significantly by 30% and 60% vs October figure respectively, led to 45%YoY growth for FY12 total thermal coal imports at 147Mt, thanks to cold winter. He highlighted that global coal supply and demand is entering a balance stage due to flattening supplies and internally still expect 19% growth in Chinese coal import for FY13. Product mix challenges may affect overall ASP and export destination. ITMG’s coal export to India has expanded significantly from 3% last year to 12% of total FY12 sales volume.  

Our take -  Based on those facts, we see potential weak 1Q13 results and 2013 earnings remain challenging despite company expects to reduce cash cost by US$4-5/ton to US$63-64/ton (about US$2-3/ton alone from direct production cost and the remaining from lower royalty payment due to lower ASP). Significant higher volume growth in 1Q13 at 17%YoY is not sustainable as company only expects 6%growth for FY13 output, meaning that significant higher stripping activities since 3Q12 – 1Q13 and higher capitalized expenses may not reflect the actual performance, which would put balance sheet and future earnings at risks. If China coal demand this year weaker than expected (as Chinese coal inventories remain high and Chinese PMI remain weak in February 2013), it would put downside risk toward company’s FY13 ASP as it has less fixed pricing. In addition, potential lower coal reserves would bring further negative sentiment to the stock as lack of M&A option would cap its stock price and valuation.

ITMG share price remains resilient among peers mostly due to its attractive high dividend yield supported by its strong cash position. The final dividend payout for FY12 will be announced in April 2013 after the EGM, with indication that company likely to maintain dividend payout at 80% translating total final dividend of US$345mn (including US$197mn interim dividend paid in November 2012, translating into total dividend per share of Rp2,936 (assuming IDR of Rp9,600) or implying 7.1% yield with ITMG closing price of Rp41,450 by year end 2012. This short-term incentive may likely to lead company’s share price move ahead the fundamental in our view.

Astra International Key takeaways from results briefing

Astra International: Key takeaways from results briefing (ASII, Neutral, Rp8,050, TP: Rp7,900)

ASII held an Analyst Briefing yesterday, discussing the recently released FY12 results and the outlook for 2013. In overall, management’s broad outlook is similar to our view, with neither significant upside nor downside apparent to our and consensus earnings forecast for 2013. We are reiterating our Neutral call and Rp7,900 TP (refer to our latest Company Focus report “No surprises in 4Q12” on 1 March 2013). Key highlights from the analyst briefing are summarized below.

Where are we heading in 2013? Management in overall remains cautious on 2013, underpinned by challenges faced in the 2W division on the full implementation of LTV ruling towards sharia financing, and the heavy equipment division. 4W is likely to remain the key engine together with the financial services division. On a positive note, management indicated its optimism that this year’s high investment (Rp15tn capex budget versus Rp13bn actual spending in FY12) would be fruitful for 2014 performance.

4W outlook – Management admitted the rising competition in the 4W space, with massive investments coming from new and existing auto principals. ASII would focus on strengthening its value added services and continuous products innovation to maintain its market share. It was further indicated that a new improvement in best-selling Toyota Avanza/Daihatsu Xenia is underway. On a positive note, management mentioned that the rising competition would benefit its auto components subsidiary as almost all auto principals have decided to make Indonesia as another production base.

LCGC update – Management confirmed that the LCGC regulation has been finalized, pending final approval from the President. Mr. Sudirman M. Rusdi, the CEO of Astra Daihatsu Motor and the Chairman of Gaikindo, commented that the final signing of the Presidential Decree is expected to come through in mid-March, after the President’s return from his overseas trip. He stated further that the Ministerial Decree would follow suit a month after, which means that ASII would start delivering Daihatsu Ayla and Toyota Agya to consumers starting early May, about two months from now. Since the cars were launched in September 2012, backlog orders have reached about 30,000 units as of mid-January 2013, which is considered strong. ASII nevertheless decided to stop selling the cars since then, following delays on the government regulation. With first delivery in May, management conservatively expects to book around 40,000-50,000 units of sales for LCGC this year (versus 30k backlog as of mid-January), compared to our 60,000 units assumption. Despite the lower ASP, management clarified that LCGC should generate similar operating margins given the lower operating expenses.

2W outlook – Since the new LTV ruling was implemented last year, management admitted that it has used sharia loophole as the solution. As a precaution, however, ASII decided to increase the sharia down-payment from 8% on average to 13%. Thus, the company is quite confident that this precautionary step would help mitigating the impact from the closing of sharia loopholes starting 1 April, which require a 20% DP on 2W financing (another 7% more from the current average DP). Maintaining a solid market share amidst industry decline would be the key focus for Astra Honda Motor. As such, it plans to strengthen its market share on the less-sensitive upper-segment motorcycles model (i.e. scooter and sports segment), as well as continuously launch new products. In overall, Honda’s market share is targeted to increase to 60% this year (from 58% in FY12 and 53% in FY11), slightly higher than our 59% target.

Commodities arm – Management’s target for Komatsu sales volume remains unchanged at 5,000 units, in-line with our heavy equipment’s analyst forecast of 4.9k units assumption. Admitting the uncertain coal mining outlook, UNTR would continue to focus on increasing the revenue contribution from spare parts sales and services, as well as heavy equipment demand from the infrastructures development that normally picks up one-year ahead of the election. On AALI side, management mentioned that it is completing a 700,000 tons p.a. CPO refinery in West Sulawesi next year.

Infrastructures division – Management expects earnings contribution from this division to go up, driven by the contribution from the toll road division. In FY12, its Tangerang-Merak concession (72.5km) reported a 15% rise in traffic volumes to 37mn vehicles, while ASII also expects the commencement of the Mojokerto-Kertosono section (41km) in 2014. Asides from the power plant business, management further mentioned over possibilities of extending its business towards industrial estate.

Article related: Astra International: 4Q12 in-line, final DPS proposed at Rp150

Bank Negara Indonesia better than expected

Bank Negara Indonesia – FY2012 results better than expected

BNI came out with better result than expected with net profit of IDR7,046bn (+21% YoY), beat ours and consensus forecasts by 5-6%. This achievement was mainly due to better asset quality maintenance which contributes to significant reduction in provisioning charges.

Total consolidated loans grew 23% YoY (+9% QoQ), higher than their 2012 guideline of 18-20%. The growth came mainly from corporate loans which increased 25% YoY (accounted 36% of total loans) followed by consumer loans at 31% (21%) and medium at 24% (18%). Of the consumer loans, mortgage increased 40% YoY followed by credit card at 23% YoY. On the other hand, auto loans only increased marginally at 2%.

Total deposit only grew 11% YoY (8% QoQ), below the company’s expectation. However, the CASA to total deposits improved to 66% from 63% as BNI is targeting to move to low cost funding by expanding their cash outlets and e-banking services. Cost of funds improved to 2.8% in 2012 from 3.5% in 2011 as the bank was reducing term deposit cost with tiering rate system. Gross LDR increased to 78%  which helped improve NIM to 5.6% in 2012 and 5.8% in 4Q12.

Asset quality improved with gross NPL of 2.8% in Dec 12, down from 3.6% in Dec 11 and 3.5% in Sep 12. The marked NPL improvement was seen in loans to medium segment to 4.5% in 2012 from 8.0% in 2011 while the NPL level to loans to the small segment increased to 5.3% from 4.4%. While the bank wrote off Rp3.17tr of bad debts in 2012, it also recovered IDR 2.27tr, translating into recovery rate of 71% in 2012 (vs. 72% in 2011). Coverage ratio improved slightly to 123%.

Fee based income grew significantly 68% YoY due to higher insurance premium rate (+85% YoY) and more active investment transaction (+147% YoY) in 2012.

Cost to income ratio declined to 52% while total consolidated CAR declined to 16.5% in 2012.  

Going forward BNI strategic policy for 2013 includes focus on synergizing business banking with consumer and retail banking, improving asset quality, optimizing fee based income and low cost fund and improving operating efficiency.

Their 2013 targets are as follows:

• Loan growth of 23-25% with consumer and retail loans at 27-29%, indicating that the bank is ready to be at full steam now that the problem loans have declined to a comfortable level.
• Deposit growth at 16-18% with CASA growth of 16-18%
• Gross NPL at 2.5-2.75% with coverage ratio of 121-125% and recovery of IDR 1.6-1.9tr
• Cost to income ratio of 48-49%
• ROE of 20-22%

The counter has outperformed the market by 10% and the financial index by 5% over the past one month and is trading at 1.7x P/BV 2013E and 10.9x PE based on the consensus numbers. We are reviewing our numbers and call on the stock, which has been one of our top pick in the sector.

Related article: Bank Negara Indonesia pay up to Rp25b for Bahana

Vale Indonesia Robust 4Q12 earnings

Vale Indonesia: Robust 4Q12 earnings, FY12 results below consensus (Under review)

• FY12 results below consensus – INCO reported FY12 net profit of US$67mn (-80%YoY), about 20% below consensus, as operating profit down 75% YoY to US$115mn with margin compressed to 12% from 37% in FY11, mostly due to lower ASP which dropped 26%YoY to US$13,552/t and higher project development cost (related to Bahodopi development, project CEPAT and operational maintenance improvement program) which up by 32%YoY to US$39mn and 3 times higher finance cost of US$15.5mn as the grace period of the loan facility end in late 2011. FY12 production volume grew modestly by 6% to 70,717 tons.

• All-time high production in 4Q12 with excellent efficient operations boost bottom line – Robust 4Q12 bottom line of US$39mn (+178%YoY, +65%YoY) as operating margin improved to 20% vs 10% in 4Q11 or 15% in 3Q12. All-time high production volume in 4Q12 at 21,306tons (+55% YoY, +4%QoQ) led to stronger economic of scale with excellence efficient operation in fuel consumption supported by higher power contribution from hydropower (see exhibit 3). 4Q12 ASP was US$13,176/t (-12%YoY, +5%QoQ).

2013 Outlook – Annualizing 4Q12 production capacity would come out at 84k tons full-year capacity. However, due to seasonality and ongoing maintenance program, Company only expects 10% growth volume or about 77k tons production in 2013. Further details for 2013 business plan & guidance will be discussed with the BoD in the conference call on Monday, 4 March 2013 at 4pm Jkt time.
Currently, we’re reviewing our rating and forecasts on the counter. With consensus top line of US$1,120mn, it implies ASP of US$14.5k/ton which is 12% lower than current LME nickel spot price of US$16.5/t and expecting 24% operating margin. Based on consensus INCO trades at 14.7x P/E for 2013.

Related article: Vale Indonesia: Key takeaways from conference call with the BoD

BFI Finance analyst meeting key takeaways

BFI Finance (Not covered; Rp2,225) – analyst meeting key takeaways

BFI Finance conducted the meeting to discuss the FY12 results and outlook. Key takeaways are:

• Net profit 2012 increased 15% y-y to Rp490b on the back of 22% y-y increase in new booking and rising operating costs.

• Of the Rp7tr new booking in 2012 4-wheeler financing (new and used cars) accounted for 76%, leasing for heavy equipment 15% and 2-wheeler financing 9%. BFI is reducing its exposure on 2-wheeler financing to the bigger ticket items 4-wheeler financing (average Rp6m vs. Rp90m) and leasing for heavy equipments. BFI is also increasing its business into the higher yield financing (walk in customers and to light commercial vehicles) which accounted for 48% of total financing in 2012 vs. 46% in 2011.

• Of the Rp7.4tr outstanding productive assets (+34% y-y) in Dec12 4-wheeler financing accounted for 78%, heavy equipment leasing 16% and 2-wheeler financing 6%.

• Increasing exposure to 4-wheeler financing despite the lower cost of funds resulted in the declining NIM to 12.4% in 2012 from 14.3% in 2011.

• NPL level has been low at 1.05% in December 2012 compared to 1.20% in December 2011 and 1.26% in September 2012. However, given the new accounting standard for impairment the company’s provisioning charges increased 162% y-y in 2012. Operating expenses also increased substantially due business expansion as BFI opened 16 new offices.  As they did not pay any dividend in 2012, ROE declined to 18.8% from 19.8%.

• For 2013 the new owner, TPG Group, has set an ambitious expectation. The management is confident to record a 25-30% growth in new booking through opening of 30-50 new offices primarily outside Java. Net profit is expected to grow 10-15% as NIM is likely to decline slightly while operating costs increase due to further expansion. The counter is trading at 1.0x P/BV 2013 consensus.

Astra International 4Q12 in-line

Astra International: 4Q12 in-line, final DPS proposed at Rp150 (ASII, Neutral, Rp7,950, TP: Rp7,900)

ASII reported FY12 NPAT at Rp19,421bn (+9.2%yoy), in-line with our (100%) and consensus (101%) expectation. Stripping-out the Rp215bn FX losses, core profit came at Rp19,636bn (+11.1%yoy), also in-line with our core profit estimates of Rp19,478bn (101%).

Sales (+15.7%yoy), gross profit (+13.0%yoy), operating profit (+11.4%yoy), and pretax profit (+8.2%yoy) also met our and consensus estimates. Margins slightly declined compared to FY11, which happened almost across the board with the exception of 4W division, thanks to its strong volume growth.

Contribution of automotive NPAT edged up to 48.8% from 46.5% in FY11, posting a 14.6%yoy growth led by the 4W (+34.2%yoy) and components (+5.2%yoy), offsetting the weak 2W (-11.2%yoy). Contribution from infrastructures and IT, albeit small, also edged up to 3.5% and 0.7% from 3.4% and 0.6%, respectively in 2011.

4Q12 NPAT came at Rp4,750bn (-4.9%qoq; +9.3%yoy), translated down from the top as margins were relatively unchanged.  Weak QoQ performance is expected, as auto sales volumes are seasonally weaker leading to year-end. Notable pick-up, nevertheless, was seen in the net margin of the auto components subsidiary that led to a 20.0%qoq growth in its NPAT.

ASII will hold an analyst meeting on Monday. We currently have a Neutral call on ASII. The stock now trades at 14.5x FY13F PE. Management would propose a final DPS of Rp150 (1.8% yield) at the upcoming AGM in April, bringing total DPS of Rp216 including the interim paid in November 2012.

Tighter Liquidity for Rupiah Stability

Liquidity continued to stiffen in 2013.

The growth of money supply, measured by the M1 and M2, continues to ease to 12.8% yoy and 13.2% yoy, respectively, in Jan13.  They have been in a sliding trend since June last year. As a consequence, interbank overnight rate increased from 3.9% in Jun12 to 4.19% in Jan13 whereas credit growth eased from 26% yoy in Jun12 to 23% yoy in end 2012 (see exhibit 1).

Does it have something to do with the central bank? We believe the answer is yes as we think part of the liquidity has been absorbed through BI’s Open Market Operation (OMO) which is the sum of term deposit, SBI, and reverse repo instruments. Specifically, the outstanding of BI’s OMO level started to gradually pick up during the same time when money supply growth started to slow; it increased from Rp238tn in Jun12 to Rp372tn in Jan13 (see exhibit 2).

Tighter liquidity is necessary for a more stable Rupiah. As we have mentioned on our previous report (please read our weekly report 13 February 2013), in addition to BI’s aggressive intervention early this year, we believe liquidity tightening stance is part of the effort to stabilize the rupiah and to prevent the currency from weakening beyond Rp9,800/US$ which we see as the upper limit level of BI’s tolerance.

What’s the condition going forward? Recently the outstanding level of BI’s OMO instruments has declined since January until mid February. Nevertheless, this trend does not change our view of BI’s tightening- liquidity bias in order to support the rupiah as the current decrease in OMO outstanding level is mostly cyclical. We believe that following the end of this cyclical period OMO outstanding size will pick up again.

Does it take FASBI hike scenario out of the table? We think no, as it is too early to conclude a stable exchange rate ahead amid uncertain global environment while the country is still running on current- account deficit. We still think BI will step up its support for the rupiah by increasing FASBI rate by at least 25 bps this year. We maintain our view that the rupiah will hover around Rp9,700/US$-Rp9,900/US$ in 1H13, before appreciating to around Rp9,600/US$ in YE13.

Bank Jatim FY12 results are below estimates

Bank Jatim – FY12 results are below estimates (Under review; Rp440)

During the analyst meeting Bank Jatim reported net profit of Rp725bn (-16% YoY) in 2012 from IDR 860bn in 2011, below ours and consensus forecasts by 10-20%. This translates into Rp235bn net profit in 4Q12 (+22% QoQ ) as the bank suffered a surge in bad debts in 3Q which resulted in higher provisioning.  

NIM reduced to around 7% in 2012 (subject to revision when the financial data is available on 11 Mar13) from 9.0% in 2011 because of declining yield (while cost of funds were relatively stable) and rising NPL.

Total loans growth increased 17% YoY (-0.5% QoQ) in 2012 from 23% YoY in 2011, contributed by consumer loans which grew 14% YoY (accounted of 64% of total loans), followed by SME (+21% YoY, 19% of total loans) and commercial (+11% YoY, 17%).

Total deposits grew 10% YoY (-16% QoQ) in 2012 compared to +23% YoY in 2011 with LDR rising to 83%, above the bank’s 2012 target of 80%. The growth of deposit portfolio came from current account (+18% YoY) and savings (+15% YoY) while time deposit slowed down (-9% YoY). As a result CASA to total deposits improved to 80% from 76%.

Total NPL rose to 2.95% in 2012 from 0.97% in 2011 with the worst deterioration was seen in commercial and SME loans, where Keppres NPL increased to 14.02% in Dec 12 from 0.16% in Decd 11 and 9.75% in Sep 12 while KUR NPL rose to 10.87% from 4.10% and 9.11% over the same period. With Rp307bn impairment in 2012, we estimate the bank wrote off Rp152b of bad debts last year while coverage ratio declined to 57% in 2012 from 65% in 2011. The management is confident that they can lower the NPL level substantially this year through better credit monitoring and higher collateral requirement for certain loans and the resolution of the Rp106bn (0.5% of total loans) NPL in syndicated loans.

Cost to income ratio improved to 43% in 2012 as compared to 46% in 2011 while CAR remained high at 24-25%.  

Going forward, Bank Jatim’s guideline for 2013 are as follows:
-Loan growth of 20% YoY with multipurpose loans above 60%
-Deposit growth of 23% YoY, to achieve LDR of 78-80%.
-NIM of 6-7% due to slower loan growth.
-Improving NPL and execute recoveries from fraud and bad debts.
-ROE of >17.5%.

Up to Feb 2013 the bank has recorded Rp220bn unaudited pretax profit, up 16.5% YoY while NPL level still creeping up to 3.2% due to continued rising problem loans in KUR, as expected. We are reviewing our forecast and call on the stock which is trading at 1.1x P/BV 2013 consensus. An AGM is set for 27 March in which the bank will decide on the dividend payment, expected at 80% payout ratio or around Rp39/share with the cum date before 18 April. At Rp440 this translates into gross dividend yield of 8.8%.

Targeted by Foreign Investors - BTPN go to top gainers

Shares of PT Bank Tabungan Pensiunan Negara Tbk (BTPN) to be one of the targeted stock by foreign investors this morning (7/3/2013) At 9:19 pm. BTPN shares entering the top gainers chart, rise 5.38% to Rp 4900.

The foreign investors' interest is presumably related to rumors circulating this morning. According to two Bloomberg sources declined to be named, The Mitsubishi UFJ will buy the BPN stokcs from TPG Capital, USD1.6 billion. (Kontan)

JCI Morning Rise Again March 7 2013

Even down slightly, the Jakarta Composite Index ( JCI / IHSG ) steady step in the green zone this morning (7/3/2013). At 9:10, JCI rose 0.19% to 4833.869.

The 3 top gainers this morning:
PT Elang Mahkota Technology Tbk (EMTK) rose 7.55% to Rp 5,700
PT Agung Tbk Podomoro (APLN) rose 7.87% to USD 480
PT Arwana Citramulia Tbk (ARNA) rose 5.82% to Rp 2,000.

The 3 top losers:
PT Centris Multu Persada Tbk (CMPP) fell 6.25% to Rp 1,200
PT Surya Esa Perkasa Tbk (ESSA) fell 4.03% to Rp 2975
PT Telecommunications Indonesia Tbk (TLKM) fell 3.15% to Rp 10,750.

(Kontan)

Bank Tabungan Negara - FY12 results in line with expectations

• BTN reported Rp1,364bn net profit for 2012, which are in line with our and the market expectations. Despite the rising NPL the bank was able to keep operating expenses low leading to the 22% y-y earnings growth and improved ROE.
• The 25% y-y net interest income growth was supported by 28% y-y loan growth (+6% q-q) which came from housing loans (+26% y-y, 86% of total loans) and non-housing loans (+44% y-y, 14% of total loans). Of the housing loans, non-subsidized housing loans posted the hiighest growth rate of 57% y-y while the subsidized housing loans saw a 1% y-y contraction due to slow realisation in the first half of 2012 as well as the inavailability of low cost housing of more than 36sqm, which is now allowed again. This condition was normalised in 4Q12 when the disbursement of subsidized housing loans quadrupled to Rp2.8tr compared to those in 3Q12 and should be sustainable in the future. The average loans for subsidized housing loans is estimated at Rp65m while for the non-subsidized is around Rp200-300m.
• On the liability side, total deposits increased 30% y-y leading to LDR of 101% (103% in 2011) but loan to funding (including bonds) is around 93%% vs. 94% in 2011. Of the total deposits, CASA deposits still account for 42% with the plan to increase it to 50-55% in five years time.
• Asset quality deteriorated with NPL increased to 4.1% in December 2012 from 3.7% in September 2012. This is understandable as the new management team, which was appointed in December wants to clean up the bank in accordance to the prudential banking practice. Most of the NPL  increase was in the subsidized housing loans (31% of total loans) which saw the level rose to 5.0% from 3.6% in September while the NPL level in the non0-subsidized housing loans declined to 2.9% from 3.0% over the same period. It is indicated that the increase was mostly on administrative issues, which are to be corrected within 3-6 months. Due to rising NPL the bank had to set aside more provisioning charges and we estimate they wrote off around Rp155bn in 4Q12, the highest quarterly write off so far.
• Cost to income ratio declined to 61% in 2012 from 63% in 2011 despite the additional 116 outlets, mostly the low-cost cash outlets in the housing area to collect funding (that is why they can achieve 30% growth in deposits). CAR improved thanks to the recent rights issue of Rp1.9tr.
• Going forward, the new management plans to increase total loans by 28% in 2013, mostly on the non-subsidized housing loans; deposit growth of 30%; NPL to decline to 2.1% and increase fee income. NIM is expected to decline due to competition. The earnings consensus for 2013 is around Rp1.7tr and at this level the counter is trading at 1.4x P/BV 2013.

No change stake in Bumi Resources Minerals Tbk (BRMS) as of September 2012

Bumi Resources: No change stake in BRMS as of September 2012

• Company’s disclosure - In response to this morning news about BUMI’s change stakes in BRMS from 87% to 45%, Company has clarified and confirmed officially that BUMI IJ still controlled 87% stake at BRMS AS OF September 2012. Management of the company did not want to give further comment and did not want to speculate on the news, despite the registered file to Idx has clearly showed that BUMI’s ownership in BRMS was reported only at 45%.
• Our take - Based on our channel check and market talks, there was a high possibility of doing repurchase agreement or “repo” between Bakrie Group with several investors on BRMS shares. And repo rate at this current condition for Bakrie Group should be very expensive in our view. A repo is economically similar to secured loan, where the seller is effectively the borrower. As we dig further, accounting wise, repo may not change the company’s ownership structure as it depends on the essence of the transaction.
• However, the INTERESTING QUESTION and our CONCERN are :

1. Company’s announcement is focusing the stake ownership AS OF September 2012 while the registered file from the berau administration (custody) reported ownership AS OF 25th February 2013. Repo is “off balance sheet” term where the ownership of BRMS should remain under BUMI IJ unless there’s a DEFAULT.  The file registered to IDX (above) clearly showed that the ownership has effectively transferred to other parties and BUMI IJ as of February 2013 only owns 45% stake at BRMS, raising QUESTION about the repo status whether is still current or default. In fact, we have seen that BRMS share has been under pressured couple days before the file registered to idx announced.
2. IF the REPO transaction TRUE, then WHERE DOES THE MONEY GO? Should it go into BUMI’s balance sheet to support its operational or debt repayment? Or should it go to Bakrie Family? The answer will be seen in the FY12 audited results. IF the money goes to Bakrie Families, then BUMI should record affiliated party A/R (receivables) as a LOAN to shareholder and would definitely bring more negative sentiment toward BUMI share.

Back in November  2009, BUMI and Bukit Mutiara entered in agreement to grant loan up to US$300mn in 2009 with IRR 19% and until now it still stays at BUMI’s balance sheet as a long term receivables with lack of clarity on the status as it has been renewed until 2015.

Related article: Market News Jakarta Feb 25 2013

Indomobil Sukses Internasional More details on the new modified Evalia

Indomobil Sukses Internasional: More details on the new modified Evalia (IMAS, Buy, Rp5,400, TP: Rp6,550)

Subsequent to our yesterday’s comment on the newly launched modified Nissan Evalia, Nissan Motor Indonesia sent a press release detailing the specifications and prices. The company officially refreshes the existing SV model with additional new features and launches St model as a new line-up, aimed to provide better comfort at an affordable prices.

The SV variant – Nissan refreshed this model by refining its seat back material and installing an additional rear cooler and flush window. Previously, rear cooler and flush window can only be found in the highest XV variant. Based on our observations, prices are slightly raised by Rp10mn to Rp172mn for manual transmission (from Rp162mn) and Rp182mn for the automatic transmission (from Rp172mn). These imply a 5.8-6.2% increase, which is justifiable given Rupiah depreciation and rising raw material prices. For the high-end XV type, Nissan also raised the price to Rp182mn for the manual transmission (from Rp175mn) and Rp192mn for the automatic transmission (from Rp185mn)

The St variant – This variant is totally a new line-up, which we believe is used as a strategy to tap lower-end consumer segment with better features as compared to the lowest S segment that is being targeted for corporations. The features offered include power window, third row head rest, seat leg cover, inside door handle finisher, seat back material, and rear cooler air conditioning system. Offered in a manual transmission, Nissan priced this variant at Rp155mn, about 6% more expensive than the lowest-end variant but 10% cheaper than the manual transmission SV type.

No price increase for low-end model – In the new price list, we note that Nissan has increased selling prices by 4.9% on average (range: 3.8-6.2%), but not for the lowest-end S type that is relatively unchanged at Rp146mn (previous price: Rp145mn). We believe this is part of Nissan’s strategy in tapping the lucrative corporate segments, which believed to account for about one-third of the total domestic 4W sales.

Recommendation – Our forecast assumes 2,000 units of Evalia sales per month, yielding annual sales of 24,000 units for this year, forming 30% of our total 79,900 units of Nissan sales. For every 1,000 units additional Evalia sales per year, we estimate a 0.8% increase in IMAS’ EPS. At the moment, we have a Buy call with Rp6,550/share target price. IMAS would release 4Q12 results this month, which we think may not be as strong. Ramping-up 1Q13 sales would be the catalyst, in our view. IMAS now trades at 12.3x FY13F PE.

This blog listed on World Wide Web Directory

Wijaya Karya Key points from company visit

Wijaya Karya : Key points from company visit (WIKA, Under review, Rp1,730)

Key points from company visit to Wijaya Karya (WIKA IJ):

• 2012 net earnings will most likely be around Rp440bn, which is in line with consensus and 24% yoy growth from 2011. The company expects that the positive momentum will keep going into 2013, where net earnings guidance is at Rp555bn, or 26% yoy growth. The figure is 1% below consensus.

• Supported by positive macro and government initiatives to accelerate infrastructure spending, the industry is experiencing tight supply on contractors (mainly due to human resources). WIKA is utilizing the positive trend to be selective on projects in order to improve margins (gross margin in 2011 and 2012F are 11% and 12%, respectively). It stated that EPC projects will be the key segment where margin improvement is highly possible. EPC equals to around 27.8% of 2012F revenue.

• The company also stated its investment commitment in the power sector. WIKA currently has invested in 5 projects (4 are already in operation with 160MW capacity). It will allocate around Rp645bn for power plant investment in 2013.

• We are currently reviewing our recommendation on this counter. WIKA is currently traded at 18.05x PE13 Cons, or 38% premium to ADHI, 45% premium to PTPP and 13% premium to WSKT.

Vale Indonesia Key takeaways from conference call with the BoD

Vale Indonesia: Key takeaways from conference call with the BoD (Under review)

Vale Indonesia held a conference call yesterday with key speaker Mr Fabio Bechara, CFO of the Company. Please find the key highlights below:

2013 outlook - Company targets to produce 77k tons nickel in matte (+10% YoY growth) and expects 5% total cost saving per tonnage in FY2013. The cost efficiency initiatives are  combination from better economic of scale,  fully effect of Karrebe hydropower, coal convertion project for the drier which expected to be commissioning in 2Q13 to replace some HSFO consumption and others operational efficiency program.  The net saving from the coal conversion project itself is expected around US$18-20mn or about 2-2.5% of the COGS

Company plans to spend US$125mn capex (12% lower than FY12) for this year with main project for coal conversion infrastructure and logistics. And the debt repayment schedule for this year about US$38mn. Company remains mute on the nickel price outlook as global crisis economy outlook remain uncertain combined with high LME inventory.

Another bumpy year ahead in 2014 - To achieve 90k tons target production by 2015, Company plans to shut down its  electric furnace no 1 (which has been repaired and completed early year 2012) to rebuild and upgrade the power capacity from 75MW to 90MW, similar to furnace no 2. Therefore we’ll see a bumpy year ahead 2014 to INCO share price it may affect 20-25% of the total production capacity, learn from the previous overhaul it may take 20-25 weeks to complete.

CoW renegotiation process underway - Company remain mute about the potential outcome from its renegotiation with the Minister of Energy and Minerals (ESDM) about its CoW status as it is still underway.  However, Company highlighted that additional project development cost (with regard on some projects development including Bahodopi mines) recorded in the the P&L will start to be capitalized into balance sheet as there’s certainty or clarity about its CoW extension status from the ESDM. Company expects that the renegotiation will complete in 2Q13.

Based on the latest case, Government has successfully amended and increased the royalty rate for Freeport and Newmont from 1% to 3%, offering important insights into the current state of Indonesia mining industry extremely has come at a significant cost to foreign investor confidence in Indonesia. Therefore, in our view Vale Indonesia likely to face the same challenges.

Holcim Indonesia Better than expected

Holcim Indonesia: Better than expected FY12 result; above ours (109%) and consensus (112%) estimates (SMCB, Rp3,450, Sell, TP: Rp2,450)

• SMCB has announced a positive FY12 result where they managed to book Rp1.35tn net income (+27.0% yoy, +7.9% qoq), ahead of ours (109%) and consensus (112%) estimates. The company posted strong revenue of 19.8% yoy growth (+7.4% qoq) which leads to growths all the way to the bottom line.
• Strong domestic volume growth of 10% qoq, greatly helped SMCB’s sales albeit the slight decrease in ASP by 3% qoq due to change in product sales mix. 9% qoq increase in direct labor cost has also attributed to the slight decline in gross margin.
• A further slight in operating margin came mostly from the G&A cost of +4% qoq. Further, higher than expected finance cost (+32% qoq) attributed in the higher below the line cost.
• SMCB FY12 result may have surprised us. However, we maintain our Sell recommendation on the due to expensive valuation (22.4x PE2013 vs. industry 18.5x; 314 EV/ton vs. industry 368x), aside our jittery in margin that may come below than our expected due to rising import activities.

Market News Jakarta March 6 2013

ICP continues to increase; no sign of 2013 Revised State Budget proposal yet

ICP continues to increase this year, the latest to an average of US $114,86/barrel in Feb13 from US$111,07/barrel a month before. The figures are above 2013 state budget assumption of US$100/barrel. However, the impact is not expected to be worrying as on the other hand oil and gas
revenue will also rise in line with price increase. The chief of Fiscal Policy Agency Bambang Brodjonegoro said that the net impact to oil and gas revenue and expense is still positive. The Coordinating Minister of Economic Affair Hatta Rajasa mentioned that the current deviation in
macroeconomic assumptions is not strong enough for the government to accelerate the proposal of 2013 Revised State Budget, whereas it is usually delivered in the middle of the year. (Bisnis Indonesia)

Rp1.44tn aimed for BKSL FY13 marketing sales

Sentul City is targeting a growth of 21% for its FY13 marketing sales to Rp1.44tn where Rp1tn will come from Sentul City and the rest will come from Sentul Nirwana. (Investor Daily)

Bank Negara Indonesia - to pay up to Rp25b for Bahana

Bank Negara Indonesia’s CEO is reported as saying to pay maximum Rp25bn for the acquisition of Bahana Pembinaan Usaha Indonesia (BPUI) to the government with the transaction to be completed by 1H12. In addition however, BNI will pay Rp1.2tr of Bahana’s loans to the government.
Comment: Bahana, which has subsidiaries in the investment banking, securities, venture capital, asset management and building management should be a complimentary to BNI’s existing business. However, we have yet to calculate the financial impact to the bank’s bottom line which may not be material. (Bisnis Indonesia).

SMRA earned Rp550bn marketing sales in up to March 2013

Summarecon has managed to book Rp550bn of marketing sales as of March 2013 which reflects a 12.22% growth. The company is aiming for a marketing sales growth of 21.62% for FY13 to Rp4.5tn compared to Rp3.7tn last year. The sales from the beginning of the year was supported by sales of 40
units at the Kensington shophouses in Kelapa Gading which contributed Rp520bn to total marketing sales. Management guidance for this year indicated a 15-20% growth of revenue and 15-20% growth for net profit. (Investor Daily)

Market News Jakarta March 5 2013

The government is cautious over US spending cut

The government is cautious over US US$85bn spending cut in 2013 as such scenario is not expected when Indonesian economic growth target is made. The impact may not be deadly, though, as the Chief of Fiscal Policy Agency Bambang Brodjonegoro estimates that each 1% decline in US economic growth will impact Indonesia GDP only by 0.1% (Kontan)

Ministerial spending absorption is still low

Kontan daily reported that ministerial spending absorption is recorded at 4.9% of Rp594.6tn budget in early Mar13. The Minister of Finance Agus Martowardojo expressed that some ministries have not yet finishing their budget disbursement process. This includes administrative process such as terms of reference (TOR) and expense budget details. At the current rate, budget absorption in 1Q13 is not expected to be better than it was in 1Q12 (Kontan)

INTP to increase production by 10% to 20.5 mt

Indocement will boost up its cement production more than 10% to 20.5 mt this year as their mill in Citeureup, Bogor, West Java starts to operate. As of FY12, the company’s capacity is at 18.6 mt or equivalent to 33.8% of total national capacity. This year, INTP will also start the construction of another plant in Citeureup with a capacity og 4.4 mt per year and is expected to be done by 2015. The company is allocating Rp2.5-3tn for CAPEX which will be used for the plant construction. (Bisnis Indonesia)

Medan-Kualanamu & Serpong-Balaraja toll roads are expected to cost Rp11tn

Nusantara Infrastucture (META) expects an investment of Rp11.25tn for the construction of the Medan-Kualanamu & Serpong-Balaraja toll roads, where the former will cost Rp5.85tn and the latter Rp5.45tn. The funding will come from internal cash and consortium fund (30%) and bank loans (70%). (Investor Daily)

Office demand in the CBD rises by 15%

Demand for office in the Jakarta CBD grows by 15% in 2013 from 300,000 sqm to 350,000 sqm while rental rate grows by 10-15%. Meanwhile, landbank left at the CBD is around 200 ha which is enough for a couple of years going forward. New offices opening this year include the Ciputra World Jakarta (CWJ) I with 64,000 sqm and DBS Bank as its anchor tenant, Kota Kasablanka Tower A with 58,000 sqm, and Life Tower Kuningan with 32,500 sqm. Office rental rate is expected to increase by 15% while ASP is expected to increase by 20% from Rp22mn per sqm to Rp26mn per sqm. (Investor Daily)

Market News Jakarta March 4 2013

Five top gainers on the Indonesia Stock Exchange

Five top gainers on the Indonesia Stock Exchange March, 4th 2013 are:

1. Waran Multipolar Tbk (MLPL-W) 43.23% to Rp 275
2. Centris Persada Multi Pratama Tbk (CMPP) 24.55% to Rp 1370.
3. Multipolar Tbk (MLPL) 17.78% to Rp 530
4. Leyand International Tbk (LAPD) 17.75% to Rp 199
5. Waran Visi Media Asia Tbk (VIVA-W) 9.84% to USD 335.

Five top losers today are:

1. Prasidha Aneka Niaga Tbk (PSDN) -21.3% to Rp 181
2. Canindo Pelangi Indah Tbk (PICO) -8.62% to Rp 265
3. Pudjiadi & Sons Estate Limited (PNSE) -8.33 to Rp 550
4. Golden Energy Mines Tbk (GEMS) -7.29%, to Rp 2225
5. Maskapai Reasuransi Indonesia Tbk (MREI) -7.06% to Rp 1580.

(Kontan)

JCI SESSION I: Profit Taking Action Exposed Sales Drop to 4769.31

The high level of JSX Composite (IHSG) in early trade this morning triggered profit-taking, so the first session index closed down 42.31 points, or 0.88%, to 4769.31.
Trade this morning preceded by an increase in the index penetrates the psychological level of new 4825.70 then exposed to profit taking. JCI during the first session moved in the range of 4764.07 to 4825.70. (Bisnis Indonesia)