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)

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.

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%.

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)

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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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.

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)

Market News Jakarta 1 Mar 2013

Central Omega Booked a 70.98% Increase in Net Profit 70,98%

Nickel producer, PT Central Omega Resources Tbk booked a 70.98% Increase in net profit to Rp303,45 billion consolidated from revenue last year Rp177, 48 billion. The Rp303, 33 billion attributable to owners of the parent entity and the remaining Rp119, 86 million attributable to non-controlling interests. Meanwhile, earnings per share fell to Rp55 per share from the previous year because of Rp92 per share diluted. (Bisnis Indonesia)

Bank Rakyat Indonesia give 30% dividen pay-out ratio in 2013

BRI 2013 annual general meeting of shareholders decided on 30% dividend pay-out ratio for 2012 net profit of Rp18.5tr from 20% in 2011, totaling IDR 5.55tr. This translates into around Rp223/share and dividend yield of 2.3%. BRI also agreed on IDR 2.59tr as reserved funds and IDR 10.37tr as retained earnings in 2013. The bank targeted a 15-18% YoY growth in net profit to more than IDR 20tr in 2013 from IDR 18.52 tr (23% YoY) in 2012. Loans growth is expected to lower to 18-22% YoY in 2013, from 23% YoY in 2012. (Investor Daily)

Market News Jakarta 28 Feb 2013

Entrepreneurs welcomed CIF agreements for exports initiative

Bisnis Indonesia daily reported that the government’s notion to change the current FOB export agreement to CIF is welcomed by entrepreneurs. Expected to be implemented in 2H13, the Minister of Trade Gita Wirjawan said that CIF method will increase exports by 8-9% while at the same time stimulate the growth of Indonesian transportation, banking, and insurance services.
Meanwhile, the Chairman of Indonesian Entrepreneur Association (Apindo) Sofjan Wanandi and Indonesia Chamber of Commerce Suryo Bambang Sulistyo consider it as the correct initiative to reduce current account deficit pressure (Bisnis Indonesia)

The New Shares of INDF subsidiary will trade immediatelly

INDF buy China stocks Minzhong Food Corporation Limited on the Singapore stock exchange valued at Rp717.4 miliar. the number of shares purchased as many as 98 million shares or equivalent to 14.95% of the total capital of CMFC.
Based on Information in the Indonesia Stock Exchange (BEI), the number of new shares issued as many as 98 million shares. The new shares free of any imposition, and have the same rights as the shares that have been issued by CMFC. The new shares will be listed and traded on the Singapore Exchange Securities Trading Limited on March 1, 2013 starting at 9:00 pm Singapore time. (Kontan)

Market News Jakarta Feb 25 2013

Bosowa Corp investing US$600mn in cement

Bosowa is realizing US$600mn investment for new cement and packing plant this year. This is aimed to have 10-1mn capacity by 2015. The total capacity is estimated to contribute up to 20% national market share. The company has started the investment earlier this year by groundbreaking of its new plant in Maros, South Sulawesi (US$310mn), which followed by Banyuwangi, East Java (mill + packing plant = Rp1tn) and Sorong, Papua (mill = Rp679bn). In addition, the company also plans to build mill in Cilegon, Banten (Rp1tn), Amurang, North Sulawesi (Rp500bn) and new port in Barru, South Sulawesi (Rp500bn). Bosowa holds 6% market share as of Dec12, with accelerating trend. (Investor Daily)

Feb13 inflation projected at 0.3-0.4% mom

The Minister of Finance Agus Martowardojo, who has been nominated to be the next central bank governor, projects Feb13 inflation to come at 0.3-0.4% mom. The figure is bigger than the realization in the same month in 2011 & 2012 at 0.13% mom and 0.05% mom, respectively. Note that the government is also planning to increase the price of 12kg LPG (Bisnis Indonesia)

The government aims to realize more than 10% of budget absorption in 1Q13

The Ministry of Finance attempts to drive spending since 1Q13, targeting 10% of budget absorption. This is supported by simplified tender and procurement process which hopefully will accelerate spending. Though so, the Minister of Finance said that up until now there is not a single government institution starting to disburse budget on projects. In the same period last year, budget absorption is recorded at 11.08%, below target of 14.57% (Kontan)

Moody’s downgraded BUMI’s rating to B2

Moody’s has downgraded BUMI’s debt rating to B2 from B1 with outlook remain stable. This reflects Moody’s assessment of the likelihood  of lower debt-to-EBITDA ratio below 4.5x over the next 12-18 months. (Bloomberg)

Bumi Plc CEO sees vote on Bakrie separation in late April

Bumi Plc CEO, Nick Von Schirnding, reported to Blooomberg that Rotschild’s defeat on EGM last week was a good outcome for Bumi’s board as the board has a firm, clear plan for Bakrie separation and focus to Berau. He sees final vote on Bakrie separation would be in late April 2013. (Bloomberg)

Toyota expects cumulative Avanza sales to exceed 1mn units since established in 2004

Toyota Astra Motor (TAM) is confident that the total cumulative sales of Avanza would exceed 1mn units by end of this year, since the model was first being introduced in 2004. As of last month, TAM already sold a total of 912,842 units of Avanza since the model was first introduced in 2004. (Bisnis Indonesia)

Mitsubishi aims 20% growth in passenger car sales

Krama Yudha Tiga Berlian Motors, the exclusive dealer of Mitsubishi, expects its passenger car sales in 2013 to grow by 20% higher from last year’s position of 22,464 units. Successful new launchings, such as the new Outlander Sport and Mirage, helped increasing Mitsubishi’s grip in the passenger car segment. Including the commercial car segment, Mitsubishi eyes to sell 155,000 units this year, against 148,918 units realized sales in 2012. (Bisnis Indonesia)

Daihatsu aims 15% market share in the domestic market

Daihatsu projects 15% market share in the domestic 4W market this year, with a total sales of 165,000 units, relatively stable as compared to last year’s realization at 163,000 units. The projection was made based on total national car sales of 1.1mn units, unchanged from last year.

Comment: The projection implies monthly run-rate of 13,750 units, versus last year’s monthly average of 13,562 units. We view this forecast as conservative. This year, Daihatsu should benefit from the realized booking of its LCGC, Daihatsu Ayla. The regulation for LCGC itself is expected to be announced this quarter, allowing Daihatsu to deliver the cars to the consumers. We forecast monthly average sales of 17,587 units for Daihatsu this year, after factoring in 36,000 units of Daihatsu Ayla sales for the entire year.