Indonesia Market Summaries 31 May 2013

Bumi Serpong Damai to pay out Rp262bn dividend

BSDE announced that they will be paying out Rp262bn or Rp15/sh as dividend implying 20% payout ratio. (Bisnis Indonesia) Comments: The dividend payment implies a yield of 0.8%.

Erajaya Swasembada to disburse 40% dividend payout

Erajaya Swasembada (ERAA) at its AGM announced that a 40% dividend payout, higher than our 20% assumption. This translates into Rp174bn of payment or Rp60/share, giving a 1.8% yield at current price. (Company)

Cigarette TV advertisement to be banned

Based on the revision of the draft of regulation no.32/2002 regarding the airing of advertisement, all cigarette advertisements or programs & shows sponsored by cigarette companies that air on TV in Indonesia are to be banned. The regulation will impose a fine to TV stations who air any kind of cigarette advertisements that could reach Rp10bn. In 2012, cigarette producers spent Rp2.5tn on advertisement. (Kontan)

Cigarrette sector : KPI propose to ban cigarette TV advertisement (Under review)

Kontan Daily today reported that Indonesian broadcasting commission (KPI) will propose additional chapter in the revision of the draft of regulation no.32/2002 regarding the airing of advertisement, which all cigarette advertisements or programs & shows sponsored by cigarette companies that air on TV in Indonesia are to be banned. The regulation will impose a fine to TV stations who air any kind of cigarette advertisements that could reach Rp10bn. In 2012, cigarette producers spent Rp2.5tn on advertisement.

Our take: This kind of black campaign has been a prolonged issue in Indonesia cigarette industry which involve some political issue especially near to the election time next year. This is still premature stage and yet we believe the big names will have strong lobby to the government official not to pass the proposal. But if the worse thing happen, it may drive negative sentiment to the sector. And we believe big players like GGRM, RMBA, HMSP and WIIM are likely to survive given their strong equity brand and customer base. Indeed, they may gain more market share in volume as other small players will likely to collapse.

for Indonesia Market Summaries 31 May 2013

Indonesia Market Summaries 26 April 2013

Semen Indonesia gave loan to Thang Long

Quoted in the local news that SMGR is providing loan facilities to their subsidiary in Vietnam, Thang Long Cement, an amount of US$41mn or equivalent to Rp398bn. The loan will bear an interest rate of LIBOR+4.5% per year with a tenor of 12 months. The loan will be used for working capital and others based on the two companies’ agreement. (Bisnis Indonesia)

Bumi Serpong Damai is planning for a placement

BSDE is seeking approval from their shareholders for a private placement. The company is said to let go 10% to a strategic investor where, if approved, have a time limit of two years to find one. BSDE has yet to disclose who the investor would be or what the proceeds of the placement would be used for. However, they said that the company is just opening up an opportunity for a strategic investor who has interest in BSDE. (Kontan)

JPFA will spend up to Rp800bn to buy back shares

Japfa Comfeed Indonesia (JPFA IJ) plan to conduct buy back share with total budget of Rp800bn within 18 months period. Company will appoint Bahana Securities as the main broker for this corporate action. Company will seek approval from EGM on June 12, 2013. This is part of company’s commitment to optimize the excess free cashflow to increase the shareholder’s equity value by improving the ROE and EPS. (Bisnis Indonesia)

Dual subsidized fuel price impact to bank performance

A dual subsidized fuel price, a scenario currently echoed by the government to implement, will slow credit growth and third party fund while increase non-performing loan (NPL), Bank Indonesia research noted. In such case, initial credit growth of 22.5-24.3% is expected to slip to 21.7-23.6%, third party fund from 17.5-18.5% to 17-17.9%, and NPL to 1.6-2.1% mainly coming from construction sector (Kontan)

Bird Flu Warning

Indonesia Market Summaries from the government, Indonesia has issued a travel warning and tightened security of Chinese visitor entrants. There seems to be a new plague of Bird Flu that is plaguing the Chinese mainland. This new form of bird flu is classified as H7N9 type and is stated to be deadly and prone to human transmission. As of yesterday, the disease has infected 108 people, of which 22 died. Although there hasn’t been any flags on the disease being spread to Indonesia, Soekarno-Hatta has tightened security for preventive measures.

Friday 12 April 2013 in brief

BSDE recorded a yoy jump on 1Q13 marketing sales by 214%

Bumi Serpong Damai announced their Q1 marketing sales of Rp2.6tn which jumped by 214% yoy. The marketing sales itself is already 37% of BSDE’s full year target of Rp7tn. Land plot sales (77% of 1Q13 marketing sales) is the main contributor, where it grew by 613% yoy. Meanwhile, residential contributed 20% of total marketing sales while commercial contributed 11%. The company’s JV with Hongkong Land and AEON Mall was a strong push to BSDE’s early year achievement, according to the company, as they managed to book gain of Rp1.7tn from selling 66ha to the two partners. Moreover, BSDE and Hongkong Land’s JV company will acquire 10ha more land from BSDE, according to the company. (Kontan)

Sentul City gained Rp250bn working capital loan

Last month, BKSL, through PT Bukit Jonggol Asri, gained a Rp250bn loan from Bank Panin to be used to develop a township. The tenor is 3 to 5 years with a single digit interest rate. BKSL added that Rp20bn will be used for working capital, Rp100bn for long term infrastructure and facilities, and Rp130bn for housing construction working capital. (Bisnis Indonesia)

Semen Indonesia showed the strongest growth in Q1

SMGR showed the strongest growth in sales compared to its peers in 1Q13 where the company’s sales grew by 8.6% yoy. The strong growth was due to capacity increase from their new Tuban IV and Tonasa V plants of 750k tons and 600k tons respectively. SMGR expects revenue to grow 21% yoy in 1Q13 which is resulted from sales volume growth. The company claimed that they saw less than 1% growth in ASP in Q1. (The Jakarta Post)

Jaya Agra Wattie to boost CPO and rubber productions

JAWA is targeting CPO production of 56,217 ton which is 21.4% higher compared to the same period last year. Production growth in CPO is expected due to higher palm age that should boost productivity. Fresh fruit bunches (TBS) purchases from third parties is also expected to increase where 39% of their total production will come from third parties. JAWA is also allocating Rp570bn for CAPEX to develop 4,000ha of CPO plantation and 5,500ha of rubber plantation. The company is planning to add landbank of 50,000ha in Kalimantan and Sumatra this year. (Kontan)

Wijaya Karya (WIKA) to accelerate IPO of Wika Beton.

A newspaper reported that Wijaya karya (WIKA) plans to accelerate the IPO of its precast concrete subsidiary, WIKA Beton, to this year. Current WIKA Beton capacity reaches 2mn ton per year at 9 precast concrete plants. It’s also planning to acquire a precast concrete company in Batam. Wika Beton assets is around Rp2.3tn with Rp180bn net profit. On the IPO, proceed is expected to be around Rp1tn for 20% shares. WIKA owns 78.4% ownership of Wika Beton. (Investor Daily)

Bumi Serpong Damai Closing FY12 with a strong net profit

Bumi Serpong Damai: Closing FY12 with a strong net profit of Rp1.3tn which is above consensus’ estimates (109.7%) (BSDE: Rp1,720, Under review)

BSDE has shown a stellar performance in FY12 recording a net profit of Rp1.3tn (+53.0% yoy, -2.7% qoq) which is above consensus’ estimates (109.7%). Although the company’s revenue and gross profit are relatively in-line with ours and consensus’ estimates, BSDE gained an edge from lower than expected opex and increasing other incomes.



Booking of marketing sales was the key driver of the growth in BSDE revenue. The company has shown 35% CAGR in marketing sales from 2010-2012. Sales was significantly pushed by hike in ASP particularly in Taman Permata Buana and BSD City. We believe that further ASP boost in Serpong as well as new project launchings will be the key catalysts for BSDE in 2013.

Under opex, we see that BSDE has managed to record a lower than expected selling expense which proven to help the company’s operating income. The company also recorded a one-time gain from subsidiary acquisition of Rp96.6bn as well as gain from sale of property investment of Rp28.1bn. These further helped boosting BSDE’s bottom line.

We see a number of exciting projects coming from BSDE ranging from new residential clusters, JV with Hongkong Land and Aeon Mall Japan, as well as the newly acquired land in Rasuna from ELTY. We believe that BSDE is going to the right direction by taking the opportunity to diversify their product portfolio.

We are still waiting for the company’s full financial statement for further analysis and we will review our forecast. BSDE is currently trading at PE13-14F 23.7-20.7x; 28% discount to RNAV13 vs industry of 30%.