Saturday, July 6, 2013

PT Semen Indonesia Tbk want to keep the average selling price

PT Semen Indonesia Tbk (SMGR, Rp16.100, NEUTRAL, Rp19.000) want to keep the average selling price (ASP) amid rising fuel prices and electricity. Transportation component in the production cost is 17%, and 40% of them from the cost of fuel.

Electrical load contribute 11% of cost production, but will not have a major impact on the company because SMGR already using electricity industry. Since June, SMGR has raised their ASP less than 2% and not intend to raise its ASP so that no more than inflation rate of 7.2%. Price increases can be done again by 2% - 3% in the first half semester II/2013, so total increase of ASP during 2013 worth 4% -5%.

We still concern at cement sector, especially considering the limited capacity of the two competitors of SMGR, PT Holcim Indonesia Tbk (SMCB, Rp2.650, SELL, TP Rp 3,000) and PT Indocement Tbk (INTP, Rp22.750, NEUTRAL, TP Rp25. 000). (Kontan)

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