Indonesia Market Summaries 3 September 2014

PT Newmont Nusa Tenggara (NNT) agreed on terms of mining contract. NNT agrees six principal to renegotiate mining contracts with the government. With the renegotiation, Newmont will be allowed to resume exports to 200,000 tonnes of copper concentrate (USD 400 million) by the end of 2014. (Investor Daily)

PT Agung Podomoro Land Tbk (APLN, Rp 369, BUY, TP Rp430): Moving to the north. Indra Wijaya, Vice President Director of APLN, to discuss reclamation project run by APLN.

For land reclamation (including infrastructure and CSR), the company believes that the pre-sales of Pluit City can cover the initial load. We assign a BUY recommendation back to the main catalyst permits the issuance of project execution. (Mandiri Sekuritas)

Jababeka-Pelindo II to prepare capex IDR 580 billion. PT Kawasan Industri Jababeka Tbk (KIJA, Rp 292) and PT Pelabuhan Indonesia II (IPC II) prepared a capital expenditure (capex) of USD 50 million (IDR 580 billion) to develop 40-50 hectares Special Economic Zones (SEZs) in Tanjung Dimples, Banten .

The funds will specifically be used to build the ship terminal and supporting infrastructure and other facilities property. KIJA and  IPC will have a 50% part each in the project. In addition to the IPC II, KIJA also with PT Garuda Indonesia Tbk (GIAA, Rp 434) and PT Jasa Marga Tbk (JSMR, Rp 6.350, NEUTRAL, TP Rp 6.200) in developing Tanjung Dimples. (Bisnis Indonesia)


PT Semen Indonesia Tbk (SMGR, Rp 16.450, BUY, TP Rp 18.300) to enter the property business. SMGR plans to enter the property and infrastructure sectors. For the property, the company will cooperate with PT Wijaya Karya Tbk (WIKA, Rp 2.855, BUY, TP Rp 2,300) to create a new joint venture subsidiary. Currently, the company already has 200 hectares of land in Gresik, East Java. (Investor Daily)


PT Hexindo Adiperkasa Tbk (HEXA, Rp 3.680, BUY, TP Rp 4,250) targets to reduce its bank loan. HEXA plans to decrease the number of its bank debt from USD 66 million to USD 7 million in March 2015 Until July, HEXA still owes USD 48.4 million.

A lower position in bank debt will make the company's financial statements are healthier and lower interest expense. In the 2013 financial statements, the company's interest expense portion was 2.8% of total net income. (Bisnis Indonesia)

for Indonesia Market Summaries 3 September 2014

Indonesia Market Summaries 21 May 2013

The government proposes once-every-two-years wage adjustment

The Ministry of Manpower and Transmigration proposes wage adjustment to be done once every two years as opposed to the current one year cycle to avoid conflict between the labor and the enterprise. Some other points included in the Government Regulation Draft on Wage Mechanism are wage adjustment differentiation based on the company’s scale of business with labor’s productivity level also considered (Kontan)

Agung Podomoro posted Rp2.2tn marketing sales as of April 2013

As of April 2013, APLN has recorded marketing sales of Rp2.2tn or approximately 37% of the company's full year target. The marketing sales implies a 44.2% yoy growth. Contribution is as follows: Podomoro City Extension (57%), Vimala Hills (15%), Soho Pancoran (7%), Metro Park Residence (7%), Grand Taruma (6%), and Parahyangan Residence (3%). (Company Release)

Comments: The marketing sales is 30% to our expected full year marketing sales of Rp7.3tn.

Honda aggressively expands network as it enters the low MPV segment

PT Honda Prospect Motor, the dealership for Honda 4W, is aggressively rolling out dealerships network in Indonesia to support the upcoming launching of low MPV before April 2014. The car, which many called as Brio MPV, would be assembled at Honda’s new assembling plant in Karawang, which has an annual production capacity of 120,000 units. The arrival of Honda into the low MPV segment would further give competition to the incumbents like Toyota Avanza, Daihatsu Xenia, Suzuki Ertiga, Nissan Evalia, Mazda VX-1, Proton Exora, and Chevrolet Spin. (Bisnis Indonesia)

for Indonesia Market Summaries 21 May 2013

Indonesia Market Summaries 10 May 2013

Bank BTPN - SMFG to buy more BTPN at Rp6,500

Sumitomo Mitsui Financial Group (SMFG) is buying 24.26% stake in BTPN for Rp9.2tr translating into Rp6,500/share, to be sourced from  TPG Nusantara (16.87%) and the market (7.39%). The group also plans to increase its stake up to 40% for Yen150b (US$1.5bn) without giving any time table for this. (Kontan, Bisnis Indonesia).

Comment: at Rp6,500 SMFG values the bank at 4.9x and 3.7x P/BV for 2012 and 2013E compared to the industry average of 3.5x and 2.9x. Based on P/E this translates into 19.2x and 15.0x versus the industry average of 15.4x and 12.5x for the same period.

PT Timah delays Myanmar expansion

TINS’ plan to expand to Myanmar has been delayed due to new local regulation requiring local companies to be involved in the mining investment. Thus, TINS is required to start a JV company with a local partner. (Bisnis Indonesia)

Deltamas aims for US$200-300mn IPO

PT Pembangunan Deltamas, the developer of Sinarmas Land’s Kota Deltamas, is aiming for an IPO proceeds of US$200-300mn or equivalent to Rp1.9-2.9tn. The IPO will be conducted in the near term this year. Currently, Deltamas is 50% owned by Sinarmas Land, 25% by Sojitz Corporation, and 25% by Fame Bridge Investment. Kota Deltamas is a 3,000ha township with an industrial estate as well as commercial and residential estates. (Investor Daily)

Surya Semesta recorded industrial land sales decline of 22.6%

In 1Q13, SSIA booked industrial land sales of Rp260bn which declined by 22.6% where the company only sold 28.8ha compared to 43.5ha last year. SSIA claimed that they had difficulties in handing over the land and will only manage to book the sales in the next quarter. The company still believes that they will be able to sell at least 100ha with an ASP of US$125 psqm this year. (Bisnis Indonesia)

General Motors reopens Bekasi Factory

General Motors reopened its factory in Bekasi, West Java, on Wednesday to domestically produce its car for the first time in the Indonesian market in seven years. GM injected US$150mn into the shuttered plant as part of a greater push into lucrative Asian markets. The 58,000sqm facility will assemble up to 40,000 vehicles a year when fully operational. Most of the vehicles will be sold in Indonesia. GM’s international operations president stated that Indonesia is one of GM’s fastest growing markets. GM recently rolled out Chevrolet Spin, a 7-seater MPV (pricing point of Avanza/Xenia at Rp170mn) that is also the first vehicle it made for the domestic market since the Chevrolet Blazer ceased production in 2006. (Jakarta Globe)

Agung Podomoro to pay Rp123bn dividend

Quoted on the news that APLN is paying a Rp123bn dividend in June 2013 or equivalent to Rp6/sh. (Bisnis Indonesia) Comments: The dividend payment implied a yield of 1.3% in 2013.

for Indonesia Market Summaries, 10 May 2013

Indonesia Today's Market and Business April 11 2013

Realization of capital spending reached 5.6% in 1Q13

The realization of government’s capital spending only achieved 5.6% of Rp184.4tn targeted in APBN 2013. Furthermore, this realization figure is lower than the same period of 2012 which reached 6.71%. The head of government’s fiscal policy, Bambang P.S. Brodjonegoro, mentioned that if the government could optimize the disbursement of capital post, then there would be an additional contribution of 0.2ppt – 0.3ppt to economic growth (Bisnis Indonesia).

Kawasan Jababeka prepares Rp9tn to develop CBD

KIJA is preparing Rp9tn to develop a CBD on a land of at least 30ha wide where the first phase will be to develop a residential estate on a 16ha land within the next 12 years with a total investment of Rp4.5tn. Meanwhile, the development of the CBD itself will take approximately 20 years in 2-3 phases. KIJA is currently studying the feasibility of the project where the result is expected to be out by Q1 next year. Aside from offices, the CBD will also have shopping centers, apartments, recreational areas, and town house. (Bisnis Indonesia)

Cikarang Property prices boost as new toll access is opened

For Indonesia Market Summaries news, KIJA and LPCK, in their partnership, has opened a new toll access at KM34.7 of the Jakarta-Cikampek toll road to the residential and commercial areas in Cikarang. The two companies have allocated Rp300bn for land clearing and construction for the toll access where each company pays 50% of the total cost. With the new toll access, KIJA and LPCK expect land ASP to increase by at least 20%. (Kontan, Bisnis Indonesia)

Summarecon gained Rp600bn loan for working capital

SMRA received an Rp600bn working capital loan from Bank Mandiri with a single digit interest rate and a tenor of 7 years. The company was seeking loan earlier this year to finance the development of their hotels in Bali which is expected to cost Rp700bn. Aside from hotel, SMRA is also eyeing for a township project which they claimed to be their expertise. (Bisnis Indonesia)

Agung Podomoro to payback Rp400bn debt

APLN is planning to pay off their Rp400bn syndicated debt using the proceeds from the issuance of their Rp2.5tn bond. The company expects the bond to be issued by June 2013. (Bisnis Indonesia)

Ciputra Development reported a consolidated 1Q13 marketing sales of Rp2.9tn

CTRA reported a consolidated 1Q13 marketing sales of Rp2.9tn which is 28.2% of their full year target. Outstanding marketing sales performance is shown by CTRS who book Rp1.3tn or 41.4% of their full year target. On the other hand, CTRP is still lagging and only booked Rp142bn marketing sales which is 8.1% of their full year target. Product mix wise, contribution still come mostly from houses (56%) and shop houses (24%). Meanwhile, geographic wise the largest contribution comes from Sumatra (37%) and the Greater Jakarta area (32%). (Company release)

Consumers’ confidence remains stable along Mar13

BI’s consumer confidence index was stable last month than Feb13, as the index was unchanged at 116.8. The relative steady number was due to higher optimism among consumers about the economic condition for the next 6 months despite the index for current economic condition eased owing to lower confidence about job availability (Bank Indonesia).

Palm Oil Reserves in Malaysia Drop Most in Two Years but CPO price still drop 1%

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell the most in more than two years to a seven-month low in March as exports gained for the first time in five months, according to official data. Inventories shrank 11 percent to 2.17 million metric tons last month from 2.44 million tons in February, the steepest monthly drop since January 2011, the Malaysian Palm Oil Board said today. The decline exceeded the median estimate for a 7 percent drop to 2.27 million tons in a Bloomberg survey. (Bloomberg)

Comment: although after the announcement of palm oil Inventory decrease higher than consensus expectation (which should be bullish factor on CPO price), the CPO price decreased by 1%. Indonesia Market Summaries assume to this matter as a sign that CPO price would decrease further in 2H13 when CPO production ramp up and palm oil inventory back to increasing trend.

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.