Market Synopsis for 3 April 2013

SMCB seeking Rp1tn to finance their Tuban II plant

Holcim Indonesia is currently seeking for Rp1tn to fund their second plant in Tuban, East Java where the company is aiming for bank loans. The company admits that funding will come from bank loan, ECA (export credit agency), and internal cash. SMCB claimed that the company needs more than USD300mn to construct the new plant which will be able to add capacity by 1.7mt by 2015. With the addition of 1.7mt each from the new Tuban I and Tuban II plants, SMCB will have a capacity of 12.5mt within 2 years. (Bisnis Indonesia).

Bank Mandiri (Rp9,850; Not covered) - AGM results

Bank Mandiri’s shareholders appointed Budi Sadikin as the new CEO, replacing Zulkifli Zaini, who has ended his 10-year term as the BoD member this year. Mr. Sadikin is Bank Mandiri’s Director of Micro and Retail Banking since 2006 when he moved from Bank Danamon. In addition to the change in top management, the bank declared a 30% dividend payout ratio from 2012 net profit, translating into Rp199.3/share. There is no change in the bank’s business strategy which is geared towards the wholesale transactions, retail payments and retail loans. (Bisnis Indonesia, Jakarta Post).   

Pertamina is expected to bear the cost for rationing program of subsidized fuel

The government mentioned that the funds to finance the rationing program of subsidized fuel will likely come from Pertamina. As a return, the government is planning to cut some amount of Pertamina’s dividend payment which is obliged in the 2013 government budget (Investor Daily).

Sentul City reported a net profit of IDR 221 billion

Sentul City: FY12 result booking Rp221bn net profit above ours (108.3%) and in-line with consensus’ estimates (100.1%)

BKSL has reported a FY12 net profit of Rp221bn which is above our estimates (108.3%) and in-line with consensus’ (100.1%). On a yearly basis, margin shows improvement from the gross level to the net margin level.

Lower booking of sales in Q4 was a result of lower number of sales despite the high level margins of the products that BKSL sold. BKSL showed a 68% yoy increase in opex as a result of higher A&P spending. Below the operating line, BKSL was supported by lower other expenses due to provisions which was booked in 2011.

BKSL has a bright 2013 in our view with exciting new and existing projects. Marketing sales booking from last year of Rp739bn from Sentul City and Rp457bn from Sentul Nirwana will most likely boost the company’s revenue this year. The company’s recently opened Pasar Apung (Floating Market) is not to be overlook as BKSL reported that the riverside dine-in spot has been a huge success. New exciting deals and projects coming include HERO’s next generation hypermart in Sentul City, the new Serpong Natura project, Pertamina Hospital, the anticipated Jungleland.

We believe that BKSL has a clear vision of its unique township which continue to offers creative and appealing products and facilities, which leads to continue to like the company. Sentul City’s ASP of approximately Rp5mn/sqm still has much upside in our view due to the unique green hillside location and improving facilities. The company expects ASP to be around Rp6.5mn/sqm this year. Re-iterate BUY on BKSL which is trading at 27.3x FY13F PE vs. industry of 16.4x.