Indonesia Market Summaries 23 September 2013

• PT Kimia Farma Tbk (KAEF, Rp590) delay the issuance of bonds worth Rp 1 trillion, which is planned to be released this September. According to the plan, Funds from the issuance are for the construction of pharmaceutical manufacturing. The company plans to seek bank loans to those needs. (Kontan)
• PT Timah Tbk (TINS, Rp1.530) targeting 51% stake in the new company which will replace PT Koba Tin. The plan is inline with the condition if the government did not renew the work contract of Koba Tin. (Investor Daily)
• The IPO schedule of PT Link Net, a subsidiary of PT First Media Tbk (KBLV, Rp600) withdrew from the beginning schedule in the quarter III/2013. Delays occur until the end of this year due to the acquisition have not been pre-effective statement from the Financial Services Authority. (Bisnis Indonesia)
• PT Cipaganti Citra Graha Tbk (CPGT, Rp265) acquired two taxi company, PT Pandu Persada Saranamukti and PT Andika Semesta. Acquisition through its subsidiary in the field of taxi services, PT Grand Transportasi Sejahtera. (Bisnis Indonesia)
• Indonesian Government Bond Yields fell the most in among other Asian countries along with the Fed's decision delay tapering Quantitative Easing. The fall of government securities (Surat Utang Negara / SUN) yields  make its price in the secondary market climbed. However, the big fall of SUN also shows that the Indonesian bond market is very fluctuative. It also shows the pressure in the bond market decreased. (Kontan)

for Indonesia Market Summaries 23 September 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

PT Timah (Persero) Tbk Plan to divest assets up to IDR 1 trillion

Timah:  Plan to divest assets up to Rp1tn, potential 14.4% market cap increase (Rp1,380, Not Rated)

To divest assets up to Rp1tn or US$100mn. Investor Daily today reported that PT Timah plan to sell its unproductive assets includes 176 ha landbank in Bekasi, Bandung and golf field in Pangkal Pinang and some buildings, with a target value up to Rp1tn. This plan may take place in 2H13 and the proceed will be used to finance its capex spending which budgeted up to Rp1.4tn for 2013.

3.1% dividend yield. Yesterday, the AGM has announced to distribute cash dividend of Rp215bn or 50% from 2012 net profit which translates into Rp42.8 dividend per share or implies 3.1% yield.

Tin price may reach US$25,000/t in 2H13. Indonesia Market Summaries. From the interview, PT Timah’s CEO expects that LME tin price may rise to US$25,000/t (+21% vs curret spot price at US$20,545/t) in 2H12 as supplies from Indonesia will be tight as the Indonesia government impose higher purity standard for export to comply with the new mineral mining regulation ESDM No 24/2012 effective in July 2013.

Potential 14.4% market cap increase?  These assets divestment plan if executed will lead to a potential big chunck one-time gain to TINS’s P&L which subject to the book value of the assets. With Rp1tn or US$100mn fresh cash raised from the asset divestment plan, it potentially may add up 14.4% of the company’s market cap as of today TIN’s market cap is Rp6.9tn or US$715mn.

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.