ESSA Sucorinvest Research Report SEP ESSA1
EQUITY
RESEARCH
September 26, 2012
Initiating Coverage
Oil & Gas
Surya Esa Perkasa
Igniting the Future
BUY
Current Price
Target
Upside potential (%)
Rp2,400
Rp3,800
58
Stock Data
Bloomberg Ticker
ESSA IJ
Outstanding share (mn)
1,000
Market Cap (Rpbn)
2,400
52 week range (Rp)
610-2,775
6-M Avg Value(Rp bn)
3.5
YTD Returns (%)
N/A
Beta (x)
N/A
Major Shareholders (%)
Trinugraha Akraya
33
Ramaduta Teltaka
22
Public
25
1-year Share Price Performance
3010
2610
2210
1810
1410
1010
610
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12
Very strong domestic LPG demand seen
Domestic LPG demand continues to increase due to the government’s initiative to convert
the use of kerosene to LPG. Initiated in May 2007, this initiative will boost LPG demand
from 1.0 mn tons in 2008 to 4.5 million tons by 2016. Demand for domestic production
remains robust due to inadequate domestic supply and cheaper cost as compared to
imported LPG. Additionally, LPG is among the cheapest petroleum-based fuel source in
Indonesia with LPG price equivalent to US$16/mmbtu is at around 40%-60% discount to
Industrial Diesel and Pertamax.
Robust profitability
From 2009-2011, the company posted solid EBITDA margins of between 49% and 56% on
the back of a strong LPG price increase as well as stable gas cost. Judging from the
breakdown of material costs, we reckon that ESSA’s gas cost is still below US$3/mmbtu.
We believe that Pertamina EP will continue to supply gas to ESSA as the latter only
extracts propane (C3) and butane (C4), which are hydrocarbon materials for LPG, and
Pertamina flares them if no one buys these condensates.
Venturing into lucrative ammonia business
ESSA is planning to enter the ammonia business by building a plant in Central Sulawesi.
The construction of the ammonia plant will start in 4Q12 and production will begin in 3Q15
and gas will be sourced from Donggi-Senoro field. 70% of ammonia produced will be used
for fertilizer and 30% will be used to make explosives for mining operation. The company
plans to spend capex of US$700m for this operation which split between debt financing
(70%) and equity financing (30%).
Kicking off coverage with a Buy rating
We initiate coverage of Surya Esa Perkasa (ESSA) with a Buy rating and 12-month DCFbased target price of Rp3,800, implying 58% upside potential. We believe investors should
look beyond 2012 and to 2013-14, as we forecast the company’s LPG volume to rise
significantly then, leading to EPS growth of 62% YoY for 2013F and 45% YoY for 2014F.
From a long-term perspective, we conservatively expect the company to start ammonia
production in 2016 which is expected to generate revenue of US$270m and EBITDA of
US$120m or around 6 times and 4 times jump from current figures, respectively.
Absolute
Relative
3m
244.0
229.0
Risks to our call
1) Higher-than-expected gas cost, 2) supplier concentration risk, 3) delay in ammonia
project and 4) profit taking and thin trading liquidity at stock level.
6m
305.7
293.7
Key investment metrics
12m
N/A
N/A
Share Performance (%)
Month
FYE Dec (US$ mn)
FY10
FY11
FY12F
FY13F
FY14F
Revenue (US$ mn)
34.1
42.4
39.7
48.0
66.1
Net profit (US$ mn)
9.4
11.3
11.0
17.9
25.9
Arief Budiman
% chg y-o-y
67.1
20.1
-2.6
62.0
45.2
arief@sucorinvest.com
EPS (US$)
0.01
0.01
0.01
0.02
0.03
+62-21-29960999
DPS (US$)
0.00
0.02
0.00
0.00
0.01
Dividend Yield (%)
0.00
0.07
0.01
0.01
0.02
ROE (%)
45.1
59.1
20.6
26.3
29.2
PER Ratio (x)
26.8
22.3
22.9
14.1
9.7
PBV (x)
12.1
13.2
4.7
3.7
2.8
EV/EBITDA (x)
22.9
14.8
12.9
11.1
8.2
Source : Bloomberg, Company
Please see the back page for rating definition, analysts certification, and important disclosure
1
Surya Esa Perkasa
September 26, 2012
Brief background
Established in 2006, Surya Esa Perkasa (ESSA) owns and operates the second largest privately-owned domestic
liquefied petroleum gas (LPG) refinery in Indonesia (apart from PSC operators). Its main business is the refining
and processing of natural gas to produce 1) LPG (Propane and Butane) which is used for burning stove (in house,
restaurant, hotel etc), steel workshop and welding, and 2) Condensate which is used for the production of thinner,
naphtha cracker, tire and glue . ESSA is also Indonesia’s only listed LPG Refiner. The company’s facilities are
located in Palembang, Indonesia.
Around 75% of company’s revenue was generated from LPG sales with the remaining portion coming from
condensate sales. LPG sales price is linked to international Saudi Aramco LPG price. Surya Esa Perkasa officially
floated its shares on the IDX on 1 Feb 2012, selling 250m shares or equal to 25% of total shares at Rp610/share
and raised Rp152bn IPO proceed. The company plans to use 75% of total proceed to increase its LPG production
capacity to 163 tons per day within the next two years, an 44% increase from its current level of 113 tons per day.
ESSA produced around 39,500 tons LPG last year or it is running at almost full capacity.
Exhibit 1: ESSA Business Overview
Source : Company presentation
Exhibit 2: ESSA shareholding structure
Source : Company presentation
Please see the back page for rating definition, analysts certification, and important disclosure
2
Surya Esa Perkasa
September 26, 2012
Exhibit 3: ESSA process flow diagram
Source: Company presentation
ESSA’s management team comprises three members in a Board of Commissioners (BOC) which monitor the
activities of the five members in the Board of Directors (BOD).
Exhibit 4: ESSA BOC and BOD
Board of Commissioners
Position
Among Previous Achievements
Hagianto Kumala
VP Commisioner
President Director of Astra International
Rahul Puri
Commissioner
Director of PT Akraya International
Ida Bagus Rahmadi
Independent Commissioner
Director of Ramatelindo Perdana Consultant
Board of Directors
Garibaldi Thohir
President Director
President Director of PT Adaro Energy and WOMF Finan
Chander Vinod Laroya
Executive Director
Director & President of PT Indorama Synthetics
Ida Bagus Made Putra Jandhana
Business Development Director
President Director of PT Ramaduta Teltaka
Isenta Hioe
Finance Director
Director of PT Northstar Pacific Investments
Mukesh Agrawal
Technical Director
Technical Advisor at Surya Esa Perkasa
Source: Company presentation
Please see the back page for rating definition, analysts certification, and important disclosure
3
Surya Esa Perkasa
September 26, 2012
Very strong domestic LPG demand seen
The company has annual LPG off take agreement of 36,000 MT with Pertamina LPG marketing division, but ESSA
believes Pertamina are willing to purchase larger volume as currently it imports around 1.5 mn MT of LPG with
import price of up to US$50/ton higher than the one locally sourced. Thus, the expected 44% production increase
from ESSA capacity expansion in 2014 should be fully absorbed by buyer. Domestic LPG demand continues to
increase due to the Government’s initiative to convert the use of kerosene to LPG. Initiated in May 2007, this
initiative will boost LPG demand from 1.0 million tons in 2008 to 4.5 million tons by 2016. Demand for domestic
production remains robust due to inadequate domestic supply and cheaper cost as compared to imported LPG (5%
import duty and freight element). Additionally, LPG is among the cheapest petroleum-based fuel source in
Indonesia with LPG price equivalent to US$16/mmbtu is at around 40%-60% discount to Industrial Diesel (MFO
and MDO) and Pertamax. Domestic demand for condensate is also strong and Chandra Asri Petrochemical (TPIA,
not rated) consumption even larger with daily use of 5,000 MT (46,000 bbl) as compared to ESSA’s daily capacity
of 400 bbl.
Exhibit 5: Indonesia’s domestic LPG production and demand
5.0
(mn MT)
4.5
4.0
3.4
3.5
3.0
2.6
2.5
2.0
1.5
3.6
2.8
3.7
2.8
4.1
3.9
2.9
4.3
4.5
3.0
3.1
3.2
2014F
2015F
2016F
2.5
2.1
1.7
1.0
1.0
0.5
0.0
2008
2009
2010
2011F
2012F
2013F
Domestic production
Demand
Source: Company presentation
Exhibit 6: Indonesia’s energy Cost Comparison (in US$/mmbtu)
Source: Company presentation
Please see the back page for rating definition, analysts certification, and important disclosure
4
Surya Esa Perkasa
September 26, 2012
Robust profitability
From 2009-2011, the company posted solid EBITDA margins of between 49% and 56% on the back of a strong LPG
price increase as well as stable gas cost. Although it did not disclose its gas cost due to reasons of confidentiality,
we gather that it has a long-term gas purchase contract up to 2022 with Pertamina EP that only permits a 5 US
cents price increase every 5 years. Judging from the breakdown of material costs, we reckon that ESSA’s gas cost
is still below US$3/mmbtu. We believe that Pertamina EP will continue to supply gas to ESSA as the latter only
extracts propane (C3) and butane (C4), which are hydrocarbon materials (typically accounting for only up to 9.5% of
total gas content) for LPG, and flare them if no one buys these condensates. ESSA has generated ROE of around
45-59% over the past three years, one of the highest among listed company in Indonesia. We are expecting average
26% ROE in 2012 and onward following higher equity base post IPO.
Exhibit 7: ESSA EBITDA margin and ROE
80
(%)
70
60
50
40
30
20
10
0
2009
2010
2011
Gross margin
2012F
EBITDA margin
2013F
ROE
2014F
Source: Company and Sucorinvest
Venturing into lucrative ammonia business
ESSA via its unit PT Panca Amara Utama (see shareholding structure in exh. 2) is also planning to enter the
ammonia business by building a plant in Central Sulawesi. Panca Amara Utama has secured a 55 MMSCFD
natural gas allocation from the Donggi-Senoro Working Area in Central Sulawesi. The construction of the ammonia
plant will start in 4Q12 with production begin in 3Q15 and gas will be sourced from Senoro-Toili field (gas price
agreement already signed). 70% of ammonia produced will be used for fertilizer and 30% will be used to make
explosives for mining operation. The company plans to spend capex of US$700m for this operation which split
between debt financing (70%) and equity financing (30% with most possible partner is Mitsubishi and Mitshui). In
last May, ESSA obtained an US$520 mn syndicated loans from seven international banks. The plant will be
constructed in 4Q12 using company equity first and then ESSA will use the facility, which will be disbursed in
stages from 2013 (30%), 2014 (45%) and 2015 (25%).
The ammonia project will support the government’s directive to maximize domestic utilization and value addition of
natural gas, in addition to strengthening national food supply security by encouraging fertilizer production. We
believe the project execution risk is small as ESSA has obtained loan facility as mentioned above. Additionally, our
channel checks with Medco International (MEDC, not rated), which is upstream gas producer with 30% equity in
Donggi-Senoro filed, reveals that they have completed land acquisition and Jetty construction with EPC tender is
ongoing. MEDC expects this 310 MMSCFD gas plant to be completed in 3Q14. Ammonia and its derivates are use
for fertilizer (Urea), explosive use at mining site and cement plant (ammonium nitrate), synthetic fiber (Acrylonitrile)
and others (Fermentation, power & steel plant use). Demand for ammonia is also very strong given that Indonesia’s
urea import has increased by 29% CAGR between 2001-2011 to US$2.6 bn. Additionally, according to Indonesia’s
Minister of Defense the country consumed 550,000 MT of ammonium nitrate last year (78% of it was sourced from
other countries) and is expected to increase to 800,000 MT / annum by 2014.
Please see the back page for rating definition, analysts certification, and important disclosure
5
Surya Esa Perkasa
September 26, 2012
Exhibit 8: Ammonia and Derivatives
Source: Company presentation
Kicking off coverage with a Buy rating
We initiate coverage of Surya Esa Perkasa (ESSA) with a Buy rating and 12-month DCF-based target price of
Rp3,800, implying 58% upside potential. We believe investors should look beyond 2012 and to 2013-14, as we
forecast the company’s LPG volume to rise significantly then, leading to EPS growth of 62% YoY for 2013F and
45% YoY for 2014F. From a long-term perspective, we conservatively expect the company to start ammonia
production in 2016 which is expected to generate revenue of US$270m and EBITDA of US$120m or around 6
times and 4 times jump from current figures, respectively.
Strong earnings growth outlook
ESSA’s short-term and long-term business-growth outlook is great, in our view. We forecast LPG sales volume
growth of 18% YoY and 30% YoY for 2013 and 2014 respectively, which will lead to net profit growth of 61%
YoY to US$17.9 mn for 2013 and 44% YoY to US$25.9 mn for 2014. From 2016 onwards, we expect total
EBITDA to jump more than six-fold due to the start-up of the company’s ammonia plant (see DCF calculation).
Exhibit 8: Historical and key earnings forecast
Saudi Aramco LPG price (US$/ton)
LPG - ASP (US$/ton)
LPG vol (k MT)
Condensate price (US$/bbl)
Condensate volume (k bbl)
Revenue breakdow n
LPG (US$ mn)
Condensate (US$ mn)
Propana (US$ mn)
Gas cost price (US$/mmbtu)
2008
768.3
743.0
25.0
70.0
109.6
2009
502.9
480.0
30.8
36.0
131.6
2010
708.3
685.0
37.4
54.0
149.1
2011
828.8
828.6
39.5
76.0
144.5
2012F
899.7
870.0
34.0
77.4
130.1
2013F 2014F 2015F
908.7 954.1 1,001.8
890.5 935.0
981.8
40.3
52.4
54.6
79.3
83.2
87.4
152.0 205.2
214.0
18.6
6.2
0.0
14.6
5.4
0.0
25.6
8.6
0.0
32.1
10.3
0.0
29.6
10.1
0.0
35.9
12.0
0.0
49.0
17.1
0.0
53.6
18.7
0.0
2.7
2.7
2.7
2.8
2.9
3.0
3.5
3.5
Source: Company and Sucorinvest
Please see the back page for rating definition, analysts certification, and important disclosure
6
Surya Esa Perkasa
September 26, 2012
A glance at the latest results: slightly lower profits on gas supply improvement work
ESSA reported a 12% yoy decline in net profit to US$6.0 mn in 1H12 due mainly to an 11% decrease in revenue
to US$20.4 mn as a result of lower LPG & condensate production. Combined LPG & condensate production fell
20% from 29,443 MT in 1H2012 to 23,400 MT in 1H2011 on the back of limited gas feedstock supply as ESSA’s
supplier (Pertamina EP) carried out a temporary improvement work on gas wells. Although near-term negative,
this should be positive in the longer term as it will provide ESSA greater security for future gas supply. The
company is confident that full gas supply shall resume in the near future. Despite the limited feedstock supply,
ESSA managed to improve its profitability posting a 1.96% increase in EBITDA to US$11.4 mn from US$11.2 mn
in 1H2011. This is mainly attributed to better efficiency coming from expenditure in 2011 to improve processes
and purchase additional equipment which resulted in ESSA achieving its highest product recovery rate ever.
Therefore, ESSA saw its EBITDA margin improving by 75bps from 48.5% in 1H2011 to 55.8% during 1H2012.
Valuation and Rating
We use the DCF method to value ESSA, with assumptions of a 9.3% WACC and a 3% terminal-growth rate. At
our target price, ESSA would trade at PER on our EPS forecasts of 22.4x for 2013, which we do not consider
demanding given our view that it offers superior profitability and robust earnings growth of 62% which translate to
PEG-13F of only 0.36x or at 50% discount to JCI’s of 0.72x. Moreover, ESSA is the only listed company which will
strongly benefit from Indonesia’s strong LPG consumption outlook. We also believe DCF is more appropriate in
valuing ESSA’s solid long-term outlook than a PER based valuation methodology. Moreover, there is no listed
regional and local listed LPG producer for valuation comparables. In our DCF calculation, we assume average
ammonia price of only US$450/MT (vs current price of above US$600/MT) and is expected to increase 5%
annually until 2023 and equates to volume growth forecast. As for LPG selling price, we expect a 8% annual
increase with flat volume growth. We forecast free cash flow to fall significantly for 2015 and 2016 due to capex
requirements for the ammonia plant.
Exhibit 9: Our DCF calculation
In US$ m n
Revenue - LPG
Revenue - Ammonia
Total Revenue
2013 2014
48.0 66.1
2015
72.4
48.0
66.1
72.4
EBITDA - LPG
EBITDA - Ammonia
Total EBITDA
30.9
42.4
48.0
30.9
42.4
48.0
EBITDA margin - LPG (%)
EBITDA margin - Ammonia (%)
Total EBITDA margin (%)
64.4
64.2
66.3
64.4
64.2
66.3
Capex
Change in Working Capital
Free cash flow
Discount period
Discount factor
Present value
Enterprise value
Net debt
Minority interest
Equity value
Outstanding shares (mn)
Equity value in Rp
2016
78.2
252.0
330.2
2017 2018 2019
84.4 91.2 98.5
274.7 299.4 326.3
359.1 390.6 424.8
50.8
121.0
171.8
54.9 59.3 64.0 69.1 74.6 80.6 87.1
134.3 149.1 165.5 183.7 203.9 226.3 251.2
189.2 208.3 229.5 252.8 278.5 306.9 338.3
65.0
48.0
52.0
-35.0 -20.0 -420.0 -300.0
-2.7 -3.5
-1.2
-9.2
-6.8 18.9 -373.2 -137.4
0
1.0
-6.8
1
2
3
0.9
0.8
0.8
17.3 -312.4 -105.2
65.0
48.9
52.7
65.0
49.8
53.3
65.0
50.7
54.0
2020 2021 2022 2023
106.3 114.8 124.0 133.9
355.7 387.7 422.6 460.7
462.1 502.6 546.7 594.6
65.0
51.6
54.7
65.0
52.6
55.4
65.0
53.6
56.1
65.0
54.5
56.9
-50.0 -47.0 -57.0 -62.0 -67.0 -72.0 -77.0
-14.2 -19.2 -24.2 -29.2 -34.2 -39.2 -44.2
125.0 142.2 148.3 161.6 177.4 195.8 217.1
4
0.7
87.6
5
0.6
91.1
6
0.6
87.0
7
0.5
86.7
8
0.5
87.1
9
0.4
87.9
10
0.4
TV
89.2 194.2
403.9
1.0
-5.0
399.9
1,000
3,799.2
Source: Sucorinvest
Please see the back page for rating definition, analysts certification, and important disclosure
7
Surya Esa Perkasa
September 26, 2012
Risks to our call
1) Higher-than-expected gas cost
The company recently held discussions with its sole natural gas supplier, Pertamina EP, regarding the latter’s
proposal to increase natural gas price. We believe the new price will still be lower than US$3/mmbtu judging
from company’s agreement with Pertamina about the US$5 cent increase of gas price every five year as
mentioned above. Additionally, ESSA only use maximum 9.5% of gas supplied by Pertamina with the rest (lean
gas) is returned to the Pertamina EP pipeline which will be used by PUSRI/Plaju Refinery. (see exhibit 3).
Exhibit 10: Typical Composition of Natural Gas
Methane
C1
70-95%
Ethane
C2
2.5-12%
Propane
C3
1-6%
Butane
C4
0.2-2.5%
Pentane
C5
0.2-1%
Carbon Dioxide
CO2
Oxygen
O2
0-0.2%
Nitrogen
N2
0-5%
Hydrogen sulphide
H2S
0-5%
Rare gases
A, He, Ne, Xe
trace
0-8%
Source: www.naturalgas.org
2) Supplier concentration risk; ESSA is overly dependent to Pertamina EP as its singe gas supplier.
3) Delay in ammonia project; The delay in ammonia project could lower our DCF value significantly.
4) Profit taking and thin trading liquidity; ESSA share price has jumped four-fold since its IPO date which makes it
vulnerable to profit taking while the average daily trading value is only Rp3.5 bn.
Please see the back page for rating definition, analysts certification, and important disclosure
8
Surya Esa Perkasa
September 26, 2012
FINANCIALS
Balance Sheet
FYE Dec (US$ mn)
FY10
FY11
FY12F
FY13F
FY14F
Assets
Cash & Equivalents
Accounts Receivables
Inventories
Other current asset
Total current assets
Long-term receivables
Net fixed assets
Other assets
Total assets
12.5
7.2
1.0
0.4
21.0
0
13.5
0.1
34.6
20.6
2.1
1.3
0.4
24.3
0
23.9
23.5
71.7
31.8
3.1
1.1
0.6
36.5
0
24.7
22.4
83.7
20.1
4.2
1.3
0.7
26.2
0
56.3
10.0
92.5
14.5
5.7
1.8
0.8
22.9
0
72.6
12.0
107.4
Liabilities and equities
Payables
ST. debt and curr. maturity
Other current liabilities
LT. debt
Other long term liabilities
Total Liabilities
Minority Interest
Shareholders' equity
BVPS (US$)
0.7
7.0
5.8
0.0
0.3
13.7
0.0
20.9
0.02
0.4
18.9
3.7
29.1
0.5
52.6
4.8
19.2
0.02
0.5
6.0
3.8
19.4
0.6
30.3
4.9
53.4
0.05
0.6
4.5
3.9
14.7
0.8
24.5
5.0
68.0
0.07
0.7
3.1
4.0
9.9
1.0
18.7
5.1
88.7
0.09
FYE Dec (Rpbn)
FY10
FY11
FY12f
FY13f
FY14f
Revenue
Cost of revenue
Gross profit
Gross margin (%)
EBITDA
EBITDA margin (%)
Operating profit
Operating margin (%)
Net interest inc (exp)
Others
Pre-tax profit
Pre-tax profit margin (%)
Income tax - net
Minority interest
34.1
-14.4
19.7
57.7
16.7
48.9
13.9
40.8
-1.4
0.0
12.6
36.9
-3.2
0.0
42.4
-13.0
29.4
69.3
21.7
51.3
18.8
44.4
-1.3
2.3
15.2
35.9
-3.9
-0.1
39.7
-12.7
27.0
68.0
22.1
55.8
19.0
48.0
-1.1
2.5
15.4
38.8
-4.3
-0.1
48.0
-14.3
33.7
70.2
30.9
64.4
24.1
50.2
-0.9
-0.5
23.7
49.5
-5.9
-0.1
66.1
-18.3
47.7
72.2
42.4
64.2
34.5
52.2
-0.6
-0.5
34.4
52.1
-8.6
-0.1
9.4
27.6
11.3
26.7
11.0
27.8
17.9
37.3
25.9
39.3
0.009
0.011
0.011
0.018
0.026
Income Statement
Net profit
Net profit margin (%)
EPS (US$)
Please see the back page for rating definition, analysts certification, and important disclosure
9
Surya Esa Perkasa
September 26, 2012
Cash flow Analysis
FYE Dec (Rpbn)
FY10
FY11
FY12F
FY13F
FY14F
CFs from operation act.
Net profit
Depreciation & amortization
Change in working capitals
Others
CFs from operation
9.4
2.7
-2.4
-0.6
9.1
11.3
2.9
2.5
0.6
17.3
11.0
3.1
-2.4
-3.3
8.5
17.9
6.8
-2.7
2.0
24.0
25.9
7.9
-3.5
-3.0
27.3
CFs from investments act.
Net capex
Others
CFs from investments
-0.7
0.0
-0.7
-1.2
-30.5
-31.7
-4.0
-2.0
-6.0
-35.0
1.7
-33.3
-20.0
-5.0
-25.0
CFs from financing act.
Dividends Paid
Change in Borrowings
Other Financing Activities
Cash from Financing Activities
0.0
-2.6
0.0
-2.6
-17.8
36.5
4.3
23.0
-3.4
-14.4
26.5
8.8
-3.3
-2.9
3.8
-2.4
-5.4
-2.9
0.3
-8.0
6.2
8.1
11.2
-11.7
-5.6
FY10
70.3
49.1
58.5
67.1
FY11
24.2
30.2
35.0
20.1
FY12F
-6.3
1.9
1.2
-2.6
FY13F
20.8
39.4
26.4
62.0
FY14F
11.9
37.4
43.4
45.2
ROE (%)
ROA (%)
45.1
27.2
59.1
15.8
20.6
13.2
26.3
19.3
29.2
24.1
Current ratio (x)
Quick ratio (x)
Acc Rec. turn over (days)
Acc Payable turn over (days)
Debt to equity (x)
Net debt to equity (x)
EBITDA/Interest cov. (x)
1.6
1.5
76.8
17.1
0.3
-0.3
12.2
1.1
1.0
18.2
12.3
2.5
1.4
16.9
3.6
3.5
28.3
14.9
0.5
-0.1
19.4
2.9
2.8
31.8
15.2
0.3
0.0
35.8
2.9
2.7
31.7
14.7
0.1
0.0
72.6
Net Changes in Cash
Key Ratios
FYE Dec (Rpbn)
Revenue gr. (%)
EBITDA gr. (%)
Opr. Profit gr. (%)
Net profit gr. (%)
Please see the back page for rating definition, analysts certification, and important disclosure
10
Surya Esa Perkasa
September 26, 2012
Sucorinvest rating definition, analysts certification, and important disclosure
Ratings for Sectors
Overweight
Neutral
Underweight
: We expect the industry to perform better than the primary market index (JCI) over the next 12 months.
: We expect the industry to perform in line with the primary market index (JCI) over the next 12 months.
: We expect the industry to underperform the primary market index (JCI) over the next 12 months.
Ratings for Stocks
Buy
: We expect this stock to give return (excluding dividend) of above 10% over the next 12 months.
Hold
: We expect this stock to give return of between -10% and 10% over the next 12 months.
Sell
: We expect this stock to give return of -10% or lower over the next 12 months.
Analyst Certification
The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed
in this research report accurately reflect their personal views about any and all of the subject securities or issuers. The research
analyst(s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific
recommendations or views expressed in this research report.
Disclaimers
This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we
do not make any representations as to its accuracy or completeness. PT Sucorinvest Central Gani accepts no liability whatsoever for
any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. PT
Sucorinvest Central Gani and its directors, officials and/or employees may have positions in, and may effect transactions in securities
mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in
dealings with respect to these companies. PT Sucorinvest Central Gani may also seek investment banking business with companies
covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Please see the back page for rating definition, analysts certification, and important disclosure
11
Surya Esa Perkasa
September 26, 2012
PT SUCORINVEST CENTRAL GANI
Head Office:
st
Equity Tower 31 floor Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190
Phone : 62 21 2996 0999 fax: 62 21 5797 3938
www.sucorinvest.com
Branch Office:
SURABAYA
Jl. Trunojoyo 67 Surabaya 60264
Ph: 031 5633720 fax : 031 5633710
MALANG
Jl. Jaksa Agung No.40 Kav.B4
Malang 65112
ph: 0341 346900 fax: 0341 346928
YOGYAKARTA
Jl. Poncowinatan No.94
ph: 0274 580111 fax: 0274 580111
PLUIT
Ruko Pluit Village R-30
Jl. Pluit Indah Raya Jakarta 14440
ph: 021 66607599 fax: 021 666761
BANDUNG
Ruko Paskal Hyper Square
Jl. Pasir Kaliki No 25-27 Blok B 47 Bandung 40181
ph: 022 87786206 fax: 022 86060653
Equity Director
Yuliawaty ext. 110
yuliawaty@sucorinvest.com
Equity Analyst
Gifar Indra Sakti ext. 103
gifar@sucorinvest.com
Technical Analyst
Tek Djen, Pang ext. 115
ajen@sucorinvest.com
Head of Research
Arief Budiman ext. 252
arief@sucorinvest.com
Equity Analyst
Isfhan Helmy ext. 275
isfhan@sucorinvest.com
Research Asistant
Achmad Yaki ext. 277
yaki@sucorinvest.com
Equity Sales
JAKARTA
Achmad Vicky Ismail ext. 148
vicky@sucorinvest.com
SURABAYA
Jenny Komala ext. 107
jennyk@sucorinvest.com
Santi Matovani ext 145
santi.matovani@sucorinvest.com
MALANG
Kartono
kartono@sucorinvest.com
YOGYAKARTA
Alex Hartono
alex@sucorinvest.com
Nurrani Hakim ext. 138
rani@sucorinvest.com
PLUIT
Yudhi Darmawan
yudhi@sucorinvest.com
BANDUNG
Regina Mitshiko ext. 106
mitshiko@sucorinvest.com
Please see the back page for rating definition, analysts certification, and important disclosure
12
RESEARCH
September 26, 2012
Initiating Coverage
Oil & Gas
Surya Esa Perkasa
Igniting the Future
BUY
Current Price
Target
Upside potential (%)
Rp2,400
Rp3,800
58
Stock Data
Bloomberg Ticker
ESSA IJ
Outstanding share (mn)
1,000
Market Cap (Rpbn)
2,400
52 week range (Rp)
610-2,775
6-M Avg Value(Rp bn)
3.5
YTD Returns (%)
N/A
Beta (x)
N/A
Major Shareholders (%)
Trinugraha Akraya
33
Ramaduta Teltaka
22
Public
25
1-year Share Price Performance
3010
2610
2210
1810
1410
1010
610
Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12
Very strong domestic LPG demand seen
Domestic LPG demand continues to increase due to the government’s initiative to convert
the use of kerosene to LPG. Initiated in May 2007, this initiative will boost LPG demand
from 1.0 mn tons in 2008 to 4.5 million tons by 2016. Demand for domestic production
remains robust due to inadequate domestic supply and cheaper cost as compared to
imported LPG. Additionally, LPG is among the cheapest petroleum-based fuel source in
Indonesia with LPG price equivalent to US$16/mmbtu is at around 40%-60% discount to
Industrial Diesel and Pertamax.
Robust profitability
From 2009-2011, the company posted solid EBITDA margins of between 49% and 56% on
the back of a strong LPG price increase as well as stable gas cost. Judging from the
breakdown of material costs, we reckon that ESSA’s gas cost is still below US$3/mmbtu.
We believe that Pertamina EP will continue to supply gas to ESSA as the latter only
extracts propane (C3) and butane (C4), which are hydrocarbon materials for LPG, and
Pertamina flares them if no one buys these condensates.
Venturing into lucrative ammonia business
ESSA is planning to enter the ammonia business by building a plant in Central Sulawesi.
The construction of the ammonia plant will start in 4Q12 and production will begin in 3Q15
and gas will be sourced from Donggi-Senoro field. 70% of ammonia produced will be used
for fertilizer and 30% will be used to make explosives for mining operation. The company
plans to spend capex of US$700m for this operation which split between debt financing
(70%) and equity financing (30%).
Kicking off coverage with a Buy rating
We initiate coverage of Surya Esa Perkasa (ESSA) with a Buy rating and 12-month DCFbased target price of Rp3,800, implying 58% upside potential. We believe investors should
look beyond 2012 and to 2013-14, as we forecast the company’s LPG volume to rise
significantly then, leading to EPS growth of 62% YoY for 2013F and 45% YoY for 2014F.
From a long-term perspective, we conservatively expect the company to start ammonia
production in 2016 which is expected to generate revenue of US$270m and EBITDA of
US$120m or around 6 times and 4 times jump from current figures, respectively.
Absolute
Relative
3m
244.0
229.0
Risks to our call
1) Higher-than-expected gas cost, 2) supplier concentration risk, 3) delay in ammonia
project and 4) profit taking and thin trading liquidity at stock level.
6m
305.7
293.7
Key investment metrics
12m
N/A
N/A
Share Performance (%)
Month
FYE Dec (US$ mn)
FY10
FY11
FY12F
FY13F
FY14F
Revenue (US$ mn)
34.1
42.4
39.7
48.0
66.1
Net profit (US$ mn)
9.4
11.3
11.0
17.9
25.9
Arief Budiman
% chg y-o-y
67.1
20.1
-2.6
62.0
45.2
arief@sucorinvest.com
EPS (US$)
0.01
0.01
0.01
0.02
0.03
+62-21-29960999
DPS (US$)
0.00
0.02
0.00
0.00
0.01
Dividend Yield (%)
0.00
0.07
0.01
0.01
0.02
ROE (%)
45.1
59.1
20.6
26.3
29.2
PER Ratio (x)
26.8
22.3
22.9
14.1
9.7
PBV (x)
12.1
13.2
4.7
3.7
2.8
EV/EBITDA (x)
22.9
14.8
12.9
11.1
8.2
Source : Bloomberg, Company
Please see the back page for rating definition, analysts certification, and important disclosure
1
Surya Esa Perkasa
September 26, 2012
Brief background
Established in 2006, Surya Esa Perkasa (ESSA) owns and operates the second largest privately-owned domestic
liquefied petroleum gas (LPG) refinery in Indonesia (apart from PSC operators). Its main business is the refining
and processing of natural gas to produce 1) LPG (Propane and Butane) which is used for burning stove (in house,
restaurant, hotel etc), steel workshop and welding, and 2) Condensate which is used for the production of thinner,
naphtha cracker, tire and glue . ESSA is also Indonesia’s only listed LPG Refiner. The company’s facilities are
located in Palembang, Indonesia.
Around 75% of company’s revenue was generated from LPG sales with the remaining portion coming from
condensate sales. LPG sales price is linked to international Saudi Aramco LPG price. Surya Esa Perkasa officially
floated its shares on the IDX on 1 Feb 2012, selling 250m shares or equal to 25% of total shares at Rp610/share
and raised Rp152bn IPO proceed. The company plans to use 75% of total proceed to increase its LPG production
capacity to 163 tons per day within the next two years, an 44% increase from its current level of 113 tons per day.
ESSA produced around 39,500 tons LPG last year or it is running at almost full capacity.
Exhibit 1: ESSA Business Overview
Source : Company presentation
Exhibit 2: ESSA shareholding structure
Source : Company presentation
Please see the back page for rating definition, analysts certification, and important disclosure
2
Surya Esa Perkasa
September 26, 2012
Exhibit 3: ESSA process flow diagram
Source: Company presentation
ESSA’s management team comprises three members in a Board of Commissioners (BOC) which monitor the
activities of the five members in the Board of Directors (BOD).
Exhibit 4: ESSA BOC and BOD
Board of Commissioners
Position
Among Previous Achievements
Hagianto Kumala
VP Commisioner
President Director of Astra International
Rahul Puri
Commissioner
Director of PT Akraya International
Ida Bagus Rahmadi
Independent Commissioner
Director of Ramatelindo Perdana Consultant
Board of Directors
Garibaldi Thohir
President Director
President Director of PT Adaro Energy and WOMF Finan
Chander Vinod Laroya
Executive Director
Director & President of PT Indorama Synthetics
Ida Bagus Made Putra Jandhana
Business Development Director
President Director of PT Ramaduta Teltaka
Isenta Hioe
Finance Director
Director of PT Northstar Pacific Investments
Mukesh Agrawal
Technical Director
Technical Advisor at Surya Esa Perkasa
Source: Company presentation
Please see the back page for rating definition, analysts certification, and important disclosure
3
Surya Esa Perkasa
September 26, 2012
Very strong domestic LPG demand seen
The company has annual LPG off take agreement of 36,000 MT with Pertamina LPG marketing division, but ESSA
believes Pertamina are willing to purchase larger volume as currently it imports around 1.5 mn MT of LPG with
import price of up to US$50/ton higher than the one locally sourced. Thus, the expected 44% production increase
from ESSA capacity expansion in 2014 should be fully absorbed by buyer. Domestic LPG demand continues to
increase due to the Government’s initiative to convert the use of kerosene to LPG. Initiated in May 2007, this
initiative will boost LPG demand from 1.0 million tons in 2008 to 4.5 million tons by 2016. Demand for domestic
production remains robust due to inadequate domestic supply and cheaper cost as compared to imported LPG (5%
import duty and freight element). Additionally, LPG is among the cheapest petroleum-based fuel source in
Indonesia with LPG price equivalent to US$16/mmbtu is at around 40%-60% discount to Industrial Diesel (MFO
and MDO) and Pertamax. Domestic demand for condensate is also strong and Chandra Asri Petrochemical (TPIA,
not rated) consumption even larger with daily use of 5,000 MT (46,000 bbl) as compared to ESSA’s daily capacity
of 400 bbl.
Exhibit 5: Indonesia’s domestic LPG production and demand
5.0
(mn MT)
4.5
4.0
3.4
3.5
3.0
2.6
2.5
2.0
1.5
3.6
2.8
3.7
2.8
4.1
3.9
2.9
4.3
4.5
3.0
3.1
3.2
2014F
2015F
2016F
2.5
2.1
1.7
1.0
1.0
0.5
0.0
2008
2009
2010
2011F
2012F
2013F
Domestic production
Demand
Source: Company presentation
Exhibit 6: Indonesia’s energy Cost Comparison (in US$/mmbtu)
Source: Company presentation
Please see the back page for rating definition, analysts certification, and important disclosure
4
Surya Esa Perkasa
September 26, 2012
Robust profitability
From 2009-2011, the company posted solid EBITDA margins of between 49% and 56% on the back of a strong LPG
price increase as well as stable gas cost. Although it did not disclose its gas cost due to reasons of confidentiality,
we gather that it has a long-term gas purchase contract up to 2022 with Pertamina EP that only permits a 5 US
cents price increase every 5 years. Judging from the breakdown of material costs, we reckon that ESSA’s gas cost
is still below US$3/mmbtu. We believe that Pertamina EP will continue to supply gas to ESSA as the latter only
extracts propane (C3) and butane (C4), which are hydrocarbon materials (typically accounting for only up to 9.5% of
total gas content) for LPG, and flare them if no one buys these condensates. ESSA has generated ROE of around
45-59% over the past three years, one of the highest among listed company in Indonesia. We are expecting average
26% ROE in 2012 and onward following higher equity base post IPO.
Exhibit 7: ESSA EBITDA margin and ROE
80
(%)
70
60
50
40
30
20
10
0
2009
2010
2011
Gross margin
2012F
EBITDA margin
2013F
ROE
2014F
Source: Company and Sucorinvest
Venturing into lucrative ammonia business
ESSA via its unit PT Panca Amara Utama (see shareholding structure in exh. 2) is also planning to enter the
ammonia business by building a plant in Central Sulawesi. Panca Amara Utama has secured a 55 MMSCFD
natural gas allocation from the Donggi-Senoro Working Area in Central Sulawesi. The construction of the ammonia
plant will start in 4Q12 with production begin in 3Q15 and gas will be sourced from Senoro-Toili field (gas price
agreement already signed). 70% of ammonia produced will be used for fertilizer and 30% will be used to make
explosives for mining operation. The company plans to spend capex of US$700m for this operation which split
between debt financing (70%) and equity financing (30% with most possible partner is Mitsubishi and Mitshui). In
last May, ESSA obtained an US$520 mn syndicated loans from seven international banks. The plant will be
constructed in 4Q12 using company equity first and then ESSA will use the facility, which will be disbursed in
stages from 2013 (30%), 2014 (45%) and 2015 (25%).
The ammonia project will support the government’s directive to maximize domestic utilization and value addition of
natural gas, in addition to strengthening national food supply security by encouraging fertilizer production. We
believe the project execution risk is small as ESSA has obtained loan facility as mentioned above. Additionally, our
channel checks with Medco International (MEDC, not rated), which is upstream gas producer with 30% equity in
Donggi-Senoro filed, reveals that they have completed land acquisition and Jetty construction with EPC tender is
ongoing. MEDC expects this 310 MMSCFD gas plant to be completed in 3Q14. Ammonia and its derivates are use
for fertilizer (Urea), explosive use at mining site and cement plant (ammonium nitrate), synthetic fiber (Acrylonitrile)
and others (Fermentation, power & steel plant use). Demand for ammonia is also very strong given that Indonesia’s
urea import has increased by 29% CAGR between 2001-2011 to US$2.6 bn. Additionally, according to Indonesia’s
Minister of Defense the country consumed 550,000 MT of ammonium nitrate last year (78% of it was sourced from
other countries) and is expected to increase to 800,000 MT / annum by 2014.
Please see the back page for rating definition, analysts certification, and important disclosure
5
Surya Esa Perkasa
September 26, 2012
Exhibit 8: Ammonia and Derivatives
Source: Company presentation
Kicking off coverage with a Buy rating
We initiate coverage of Surya Esa Perkasa (ESSA) with a Buy rating and 12-month DCF-based target price of
Rp3,800, implying 58% upside potential. We believe investors should look beyond 2012 and to 2013-14, as we
forecast the company’s LPG volume to rise significantly then, leading to EPS growth of 62% YoY for 2013F and
45% YoY for 2014F. From a long-term perspective, we conservatively expect the company to start ammonia
production in 2016 which is expected to generate revenue of US$270m and EBITDA of US$120m or around 6
times and 4 times jump from current figures, respectively.
Strong earnings growth outlook
ESSA’s short-term and long-term business-growth outlook is great, in our view. We forecast LPG sales volume
growth of 18% YoY and 30% YoY for 2013 and 2014 respectively, which will lead to net profit growth of 61%
YoY to US$17.9 mn for 2013 and 44% YoY to US$25.9 mn for 2014. From 2016 onwards, we expect total
EBITDA to jump more than six-fold due to the start-up of the company’s ammonia plant (see DCF calculation).
Exhibit 8: Historical and key earnings forecast
Saudi Aramco LPG price (US$/ton)
LPG - ASP (US$/ton)
LPG vol (k MT)
Condensate price (US$/bbl)
Condensate volume (k bbl)
Revenue breakdow n
LPG (US$ mn)
Condensate (US$ mn)
Propana (US$ mn)
Gas cost price (US$/mmbtu)
2008
768.3
743.0
25.0
70.0
109.6
2009
502.9
480.0
30.8
36.0
131.6
2010
708.3
685.0
37.4
54.0
149.1
2011
828.8
828.6
39.5
76.0
144.5
2012F
899.7
870.0
34.0
77.4
130.1
2013F 2014F 2015F
908.7 954.1 1,001.8
890.5 935.0
981.8
40.3
52.4
54.6
79.3
83.2
87.4
152.0 205.2
214.0
18.6
6.2
0.0
14.6
5.4
0.0
25.6
8.6
0.0
32.1
10.3
0.0
29.6
10.1
0.0
35.9
12.0
0.0
49.0
17.1
0.0
53.6
18.7
0.0
2.7
2.7
2.7
2.8
2.9
3.0
3.5
3.5
Source: Company and Sucorinvest
Please see the back page for rating definition, analysts certification, and important disclosure
6
Surya Esa Perkasa
September 26, 2012
A glance at the latest results: slightly lower profits on gas supply improvement work
ESSA reported a 12% yoy decline in net profit to US$6.0 mn in 1H12 due mainly to an 11% decrease in revenue
to US$20.4 mn as a result of lower LPG & condensate production. Combined LPG & condensate production fell
20% from 29,443 MT in 1H2012 to 23,400 MT in 1H2011 on the back of limited gas feedstock supply as ESSA’s
supplier (Pertamina EP) carried out a temporary improvement work on gas wells. Although near-term negative,
this should be positive in the longer term as it will provide ESSA greater security for future gas supply. The
company is confident that full gas supply shall resume in the near future. Despite the limited feedstock supply,
ESSA managed to improve its profitability posting a 1.96% increase in EBITDA to US$11.4 mn from US$11.2 mn
in 1H2011. This is mainly attributed to better efficiency coming from expenditure in 2011 to improve processes
and purchase additional equipment which resulted in ESSA achieving its highest product recovery rate ever.
Therefore, ESSA saw its EBITDA margin improving by 75bps from 48.5% in 1H2011 to 55.8% during 1H2012.
Valuation and Rating
We use the DCF method to value ESSA, with assumptions of a 9.3% WACC and a 3% terminal-growth rate. At
our target price, ESSA would trade at PER on our EPS forecasts of 22.4x for 2013, which we do not consider
demanding given our view that it offers superior profitability and robust earnings growth of 62% which translate to
PEG-13F of only 0.36x or at 50% discount to JCI’s of 0.72x. Moreover, ESSA is the only listed company which will
strongly benefit from Indonesia’s strong LPG consumption outlook. We also believe DCF is more appropriate in
valuing ESSA’s solid long-term outlook than a PER based valuation methodology. Moreover, there is no listed
regional and local listed LPG producer for valuation comparables. In our DCF calculation, we assume average
ammonia price of only US$450/MT (vs current price of above US$600/MT) and is expected to increase 5%
annually until 2023 and equates to volume growth forecast. As for LPG selling price, we expect a 8% annual
increase with flat volume growth. We forecast free cash flow to fall significantly for 2015 and 2016 due to capex
requirements for the ammonia plant.
Exhibit 9: Our DCF calculation
In US$ m n
Revenue - LPG
Revenue - Ammonia
Total Revenue
2013 2014
48.0 66.1
2015
72.4
48.0
66.1
72.4
EBITDA - LPG
EBITDA - Ammonia
Total EBITDA
30.9
42.4
48.0
30.9
42.4
48.0
EBITDA margin - LPG (%)
EBITDA margin - Ammonia (%)
Total EBITDA margin (%)
64.4
64.2
66.3
64.4
64.2
66.3
Capex
Change in Working Capital
Free cash flow
Discount period
Discount factor
Present value
Enterprise value
Net debt
Minority interest
Equity value
Outstanding shares (mn)
Equity value in Rp
2016
78.2
252.0
330.2
2017 2018 2019
84.4 91.2 98.5
274.7 299.4 326.3
359.1 390.6 424.8
50.8
121.0
171.8
54.9 59.3 64.0 69.1 74.6 80.6 87.1
134.3 149.1 165.5 183.7 203.9 226.3 251.2
189.2 208.3 229.5 252.8 278.5 306.9 338.3
65.0
48.0
52.0
-35.0 -20.0 -420.0 -300.0
-2.7 -3.5
-1.2
-9.2
-6.8 18.9 -373.2 -137.4
0
1.0
-6.8
1
2
3
0.9
0.8
0.8
17.3 -312.4 -105.2
65.0
48.9
52.7
65.0
49.8
53.3
65.0
50.7
54.0
2020 2021 2022 2023
106.3 114.8 124.0 133.9
355.7 387.7 422.6 460.7
462.1 502.6 546.7 594.6
65.0
51.6
54.7
65.0
52.6
55.4
65.0
53.6
56.1
65.0
54.5
56.9
-50.0 -47.0 -57.0 -62.0 -67.0 -72.0 -77.0
-14.2 -19.2 -24.2 -29.2 -34.2 -39.2 -44.2
125.0 142.2 148.3 161.6 177.4 195.8 217.1
4
0.7
87.6
5
0.6
91.1
6
0.6
87.0
7
0.5
86.7
8
0.5
87.1
9
0.4
87.9
10
0.4
TV
89.2 194.2
403.9
1.0
-5.0
399.9
1,000
3,799.2
Source: Sucorinvest
Please see the back page for rating definition, analysts certification, and important disclosure
7
Surya Esa Perkasa
September 26, 2012
Risks to our call
1) Higher-than-expected gas cost
The company recently held discussions with its sole natural gas supplier, Pertamina EP, regarding the latter’s
proposal to increase natural gas price. We believe the new price will still be lower than US$3/mmbtu judging
from company’s agreement with Pertamina about the US$5 cent increase of gas price every five year as
mentioned above. Additionally, ESSA only use maximum 9.5% of gas supplied by Pertamina with the rest (lean
gas) is returned to the Pertamina EP pipeline which will be used by PUSRI/Plaju Refinery. (see exhibit 3).
Exhibit 10: Typical Composition of Natural Gas
Methane
C1
70-95%
Ethane
C2
2.5-12%
Propane
C3
1-6%
Butane
C4
0.2-2.5%
Pentane
C5
0.2-1%
Carbon Dioxide
CO2
Oxygen
O2
0-0.2%
Nitrogen
N2
0-5%
Hydrogen sulphide
H2S
0-5%
Rare gases
A, He, Ne, Xe
trace
0-8%
Source: www.naturalgas.org
2) Supplier concentration risk; ESSA is overly dependent to Pertamina EP as its singe gas supplier.
3) Delay in ammonia project; The delay in ammonia project could lower our DCF value significantly.
4) Profit taking and thin trading liquidity; ESSA share price has jumped four-fold since its IPO date which makes it
vulnerable to profit taking while the average daily trading value is only Rp3.5 bn.
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8
Surya Esa Perkasa
September 26, 2012
FINANCIALS
Balance Sheet
FYE Dec (US$ mn)
FY10
FY11
FY12F
FY13F
FY14F
Assets
Cash & Equivalents
Accounts Receivables
Inventories
Other current asset
Total current assets
Long-term receivables
Net fixed assets
Other assets
Total assets
12.5
7.2
1.0
0.4
21.0
0
13.5
0.1
34.6
20.6
2.1
1.3
0.4
24.3
0
23.9
23.5
71.7
31.8
3.1
1.1
0.6
36.5
0
24.7
22.4
83.7
20.1
4.2
1.3
0.7
26.2
0
56.3
10.0
92.5
14.5
5.7
1.8
0.8
22.9
0
72.6
12.0
107.4
Liabilities and equities
Payables
ST. debt and curr. maturity
Other current liabilities
LT. debt
Other long term liabilities
Total Liabilities
Minority Interest
Shareholders' equity
BVPS (US$)
0.7
7.0
5.8
0.0
0.3
13.7
0.0
20.9
0.02
0.4
18.9
3.7
29.1
0.5
52.6
4.8
19.2
0.02
0.5
6.0
3.8
19.4
0.6
30.3
4.9
53.4
0.05
0.6
4.5
3.9
14.7
0.8
24.5
5.0
68.0
0.07
0.7
3.1
4.0
9.9
1.0
18.7
5.1
88.7
0.09
FYE Dec (Rpbn)
FY10
FY11
FY12f
FY13f
FY14f
Revenue
Cost of revenue
Gross profit
Gross margin (%)
EBITDA
EBITDA margin (%)
Operating profit
Operating margin (%)
Net interest inc (exp)
Others
Pre-tax profit
Pre-tax profit margin (%)
Income tax - net
Minority interest
34.1
-14.4
19.7
57.7
16.7
48.9
13.9
40.8
-1.4
0.0
12.6
36.9
-3.2
0.0
42.4
-13.0
29.4
69.3
21.7
51.3
18.8
44.4
-1.3
2.3
15.2
35.9
-3.9
-0.1
39.7
-12.7
27.0
68.0
22.1
55.8
19.0
48.0
-1.1
2.5
15.4
38.8
-4.3
-0.1
48.0
-14.3
33.7
70.2
30.9
64.4
24.1
50.2
-0.9
-0.5
23.7
49.5
-5.9
-0.1
66.1
-18.3
47.7
72.2
42.4
64.2
34.5
52.2
-0.6
-0.5
34.4
52.1
-8.6
-0.1
9.4
27.6
11.3
26.7
11.0
27.8
17.9
37.3
25.9
39.3
0.009
0.011
0.011
0.018
0.026
Income Statement
Net profit
Net profit margin (%)
EPS (US$)
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Surya Esa Perkasa
September 26, 2012
Cash flow Analysis
FYE Dec (Rpbn)
FY10
FY11
FY12F
FY13F
FY14F
CFs from operation act.
Net profit
Depreciation & amortization
Change in working capitals
Others
CFs from operation
9.4
2.7
-2.4
-0.6
9.1
11.3
2.9
2.5
0.6
17.3
11.0
3.1
-2.4
-3.3
8.5
17.9
6.8
-2.7
2.0
24.0
25.9
7.9
-3.5
-3.0
27.3
CFs from investments act.
Net capex
Others
CFs from investments
-0.7
0.0
-0.7
-1.2
-30.5
-31.7
-4.0
-2.0
-6.0
-35.0
1.7
-33.3
-20.0
-5.0
-25.0
CFs from financing act.
Dividends Paid
Change in Borrowings
Other Financing Activities
Cash from Financing Activities
0.0
-2.6
0.0
-2.6
-17.8
36.5
4.3
23.0
-3.4
-14.4
26.5
8.8
-3.3
-2.9
3.8
-2.4
-5.4
-2.9
0.3
-8.0
6.2
8.1
11.2
-11.7
-5.6
FY10
70.3
49.1
58.5
67.1
FY11
24.2
30.2
35.0
20.1
FY12F
-6.3
1.9
1.2
-2.6
FY13F
20.8
39.4
26.4
62.0
FY14F
11.9
37.4
43.4
45.2
ROE (%)
ROA (%)
45.1
27.2
59.1
15.8
20.6
13.2
26.3
19.3
29.2
24.1
Current ratio (x)
Quick ratio (x)
Acc Rec. turn over (days)
Acc Payable turn over (days)
Debt to equity (x)
Net debt to equity (x)
EBITDA/Interest cov. (x)
1.6
1.5
76.8
17.1
0.3
-0.3
12.2
1.1
1.0
18.2
12.3
2.5
1.4
16.9
3.6
3.5
28.3
14.9
0.5
-0.1
19.4
2.9
2.8
31.8
15.2
0.3
0.0
35.8
2.9
2.7
31.7
14.7
0.1
0.0
72.6
Net Changes in Cash
Key Ratios
FYE Dec (Rpbn)
Revenue gr. (%)
EBITDA gr. (%)
Opr. Profit gr. (%)
Net profit gr. (%)
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Surya Esa Perkasa
September 26, 2012
Sucorinvest rating definition, analysts certification, and important disclosure
Ratings for Sectors
Overweight
Neutral
Underweight
: We expect the industry to perform better than the primary market index (JCI) over the next 12 months.
: We expect the industry to perform in line with the primary market index (JCI) over the next 12 months.
: We expect the industry to underperform the primary market index (JCI) over the next 12 months.
Ratings for Stocks
Buy
: We expect this stock to give return (excluding dividend) of above 10% over the next 12 months.
Hold
: We expect this stock to give return of between -10% and 10% over the next 12 months.
Sell
: We expect this stock to give return of -10% or lower over the next 12 months.
Analyst Certification
The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed
in this research report accurately reflect their personal views about any and all of the subject securities or issuers. The research
analyst(s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific
recommendations or views expressed in this research report.
Disclaimers
This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we
do not make any representations as to its accuracy or completeness. PT Sucorinvest Central Gani accepts no liability whatsoever for
any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. PT
Sucorinvest Central Gani and its directors, officials and/or employees may have positions in, and may effect transactions in securities
mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in
dealings with respect to these companies. PT Sucorinvest Central Gani may also seek investment banking business with companies
covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
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Surya Esa Perkasa
September 26, 2012
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