Indonesia Market Summaries 30 June 2014

PT Bank Pembangunan Jawa Barat & Banten Tbk (BJB, BJBR, Rp 825, SELL, TP Rp 850)
Mr Irvan Ahmad, one of the new directors of BJB, passed the fit and proper test, held by Otoritas Jasa Keuangan (OJK). That makes two other new directors have not passed the fit and proper test. (Kontan)


Lembaga Penjamin Simpanan (LPS) stated be able to handle the closing of 40 small troubled banks because it already has the assets to Rp 47,92 trillion by the end of May. The funds are largely derived from premium income of the banking industry. (Investor Daily)

The capital expenditure (capex) of PT Indomobil Sukses Internasional Tbk (IMAS, Rp4.900) at USD 600 million or equivalent to Rp 7,17 trillion. The funds will be used for the construction of 20 new stores. (Bisnis Indonesia)


for Indonesia Market Summaries 30 June 2014

Indomobil shows Datsun Go at IIMS 2013

PT Indomobil Sukses International Tbk (IMAS) through Nissan Motor Indonesia (NMI) displaying Datsun Go in Indonesia International Motor Show 2013 (IIMS 2013).



After being introduced to the media, Tuesday, 17/9/2013, Datsun Go finally can be seen by the general public in the annual car show event, IIMS 2013. There are 2 types of LCGC car that will be in the market in 2014, Datsun Go and Datsun Go+.

NMI explains the presence of Datsun Go in IIMS 2013 is still a show car, there is no order units and it will be sold in 2014.

As is known, some manufacturers are planning to introduce LCGC cars, such as Honda Prospect Motor launched Brio Satya, Agya by Toyota, Ayla by Daihatsu.  And Datsun Go will complete the market of LCGC car segment in Indonesia.

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Indomobil Sukses Internasional present Autobacs Seven to Indonesia

PT Indomobil Sukses Internasional Tbk (IMAS, Rp5.300, BUY, TP Rp6.000) established a joint venture with a Japanese automotive parts retailer, Autobacs Seven. Through its subsidiary, PT Central Sole Agency, IMAS established PT Autobacs Indomobil Indonesia to reach the wholesale distribution market of auto parts and accessories.

The amount disbursed for capital in this joint venture is U.S. $ 18 million or equivalent to Rp 181,18 billion, where as many as 51% of the portion owned by Central Sole and 49% owned by Autobacs.
Autobacs Seven is a pioneer of one-stop retail and department stores in Japan. Their services are automotive goods, services installation, car's selling and buying, car maintenance and inspection, and cars painting.

On the financial statements of 2012 which was recorded in March 2013, Autobacs scored global sales worth 230 billion yen or equivalent to Rp 23,26 trillion, and net profit of 8 billion yen or equivalent to Rp 809,25 billion. In the global network, the company has 552 stores in Japan and 27 stores in other countries.  [11 in France, 6 in Taiwan, 4 in Thailand, 3 in Singapore, 2 in China and 1 in Malaysia]

The subsidiary profits for IMAS is an expectations of increasing demand for car accessories which associated with car sales increased and Indonesian population demographics. The subsidiary can help IMAS to strengthen the auto parts business in 2012 by contributing gross profit of 25%.

For long term, IMAS predict its new subsidiary will add 3% -5% of company revenue and will make its net margin improved compared to segment dealers.

In terms of consolidation, the contribution of Autobacs Indomobil will donate 2% -3% for IMAS' net income proportionately on 51% ownership. This business is likely to commence in 2014 with the opening of a new store in Serpong area.

The investment cost for the next 3 years is expected at U.S. $ 6 million, equivalent to Rp 60,42 billion, mainly for 5 stores opening in 2014, 10 stores in 2015 and 10 stores in 2016. The business is also open for franchise opportunities.

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PT Indomobil Sukses Internasional Tbk started to introduce Datsun

Nissan, One of the principal of PT Indomobil Sukses Internasional Tbk (IMAS, Rp5.400, BUY, TP Rp6.000)  started to introduce their plan to launching Datsun.

Bisnis Indonesia reported that Nissan will increase the capacity of their assembly plant annually from 100,000 units to 150,000 units by the end of 2014 and 200,000 units in 2016, so the total allocated budget worth U.S. $ 200 million. From total capacity of 200,000 units per year, Nissan Motor Indonesia (NMI) will allocate 50% total capacity to Datsun.

Datsun debut will begin on September 17 when the two types of low cost green car (LCGC) launch. Non-LCGC production cars will be the next target. NMI stated that the first type of Datsun will be different from Datsun GO that launched in India three days ago.



Revers to total capacity production has been targeted by NMI, 100% utilization would make Datsun able to sell as many as 8,300 units in 2016. For 2014, we have projected that as many as 2,500 monthly sales will be started in quarter II/2014 and will contribute 22,500 unit sales for the full year.

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Indonesia Market Summaries 16 July 2013

Japanese car manufacturer, Nissan, began to introduce low cost green car (LCGC) Datsun GO, the price of Datsun GO type in India today are INR400.000 or USD 6.700 or around IDR 67 million. In Indonesia, distributor for Nissan and Datsun is PT Indomobil Sukses Internasional Tbk (IMAS, Rp5.350, BUY, TP Rp6.000).

Cars with a capacity of five people was also the first Datsun LCGC which will be released in 2014 in Indonesia, Russia, and South African. Next the LCGC is a versatile type (multi-purpose vehicles / MPV) with a capacity of 7 people. Other manufacturers which is planning to release a 7 MPV capacity is Honda, while the other principals such as Toyota, Daihatsu, and Suzuki has not revealed similar plans.

While the market share of automotive vehicles (4W) PT Astra International Tbk (ASII, Rp6.650, NEUTRAL, TP Rp7.300) and IMAS down in June. The decline occurred even the car sales in the industry increased by 4.7% MoM and 2.5% YoY to 104.265 units.

The increase was supported by higher sales by Suzuki (+55.7% mom) and Mitsubishi (+11.7%), meanwhile Toyota (-3.2% mom), Daihatsu (-6.6% mom), Nissan (-8.1% mom), and Honda (-9.2% mom).

As a result of that achievement, ASII market share fell to 50.9% in June (down by -4.4 percent points MoM and -2.6 percent points YoY) or 53.4% during the semester I/2013 (down -3.0 percent points). For IMAS (just Nissan), its market share also fell to 5.2% in June (down -0.7 percent point MoM and -0.5 percent points YoY) and amounted to -1.2 percent points throughout the semester I/2013.
For the semester I/2013, car sales are recorded as many as 601 952 units (up +12.5% YoY), which is 47.8% from the target of 1,259,008 units this year, compared with the realization of 48%. Sales in the quarter II/2013 rose 3.4% quarter on quarter (QoQ) or 7.6% year on year (YoY) to 306,036 units.

for Indonesia Market Summaries 16 July 2013

Indonesia Market Summaries 16 April 2013 Part 2

Surya Internusa boost commercial property business

SSIA is boosting their commercial property business by expanding their Graha Surya Internusa office building which would cost the company Rp1.5-1.8tn. The Indonesia Market Summaries found that this company is planning to add another tower at Graha Internusa which will add the building size to 80,000sqm from 20,000sqm now. Expansion is expected to start in January 2014 and will be funded using internal cash and external financing. The office building will then change its grade to a grade A from grade B and the average rental rate will rise from USD10/sqm to USD17-18/sqm. (Investor Daily)

Nissan seeks 67%yoy growth in East Java sales

PT Nissan Motor Indonesia aims to increase the monthly sales in East Java from around 600 units in FY12 to 1,000 units this year, implying a 67%yoy growth. Anton Wijaya, its regional manager for East Java, Bali, Lombok, and Sulawesi, expects rising sales to be supported by the opening of new dealerships this year. Initial monthly sales target would be about 700 units before ramping up to 1,000 units towards the end of the year. (Bisnis Indonesia)

Indomobil to do local assembling for Renault

Citing its CEO statement, Indomobil Sukses Internasional (IMAS) plans to do local assembling for Renault cars at one of IMAS’ local assembling facilities. Local assembling would make Renault more price competitive, as it would get better tax incentives from the government. The study remains ongoing now, with better clarity expected in July. The media reports a possibility for Renault to do local assembling for its SUV type. (Kontan)

Adhi karya: securing Rp7.6tn property backlog in 2014

A newspaper reported for Indonesia Market Summaries that ADHI, through its property subsidiaries, is securing a total of Rp7.6tn property backlog in 2014. The largest project will be a 6-Ha superblock in Daan Mogot, West Jakarta with contract value of Rp6tn and low-rise residences in Pejaten with project value of Rp800bn, where ADHI owns 70% of the project. This year, Adhi Properti is aiming for Rp890bn revenue and (Rp341bn revenue in 2012) and Rp160bn in net profit (Rp78bn net profit in 2012) (Kontan).

Indomobil Sukses Internasional weak but expected

Indomobil Sukses Internasional: FY12 weak, but expected (IMAS, Buy, Rp5,500, TP: Rp6,150)

We reduced our TP on IMAS from Rp6,550 to Rp6,150 as we incorporate weak FY12 results into our model. We retained 80k units of Nissan sales assumption this year, but lowered operating margins to factor in dealerships roll-out. Weak 4Q12 was largely anticipated, and does not really make a difference given the tender offer price floor protection. We retain our BUY call. Downside is protected, while upside could be rewarding, in our view. Post-acquisition, Salim should also have more incentives to grow IMAS.

Weak FY12 results were partially driven by Nissan dealership expansion that was not supported by pick-up in sales volume. This year, Nissan would continue to expand its dealership by opening 20-25 outlets from the existing 85 outlets. The 24-29% growth in dealership number would lead to higher cost/sales, as we only expect a 19% volume growth for Nissan. We slashed FY13F operating margin assumption to 3.8% from 4.1%, but still expecting an improvement YoY.

While it is painful in the short term, expanding dealership network is the key to long-term success in the Indonesian market. It enables Nissan to strengthen its secondary market, a key to win both consumer and corporate customers. The decision to continuously expand, despite declining market share, is also the right one, paving the way for the launching of Datsun LCGC in early 2014.

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.

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.

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