Strategy - 2018 A Year of Never Ending Festive Mood
Strategy
2018: A Year of Never Ending Festive Mood
26 March 2018
A supe r pa ck e d y e a r of f e st ive e ve nt s t h a t ca n r e v ive t he
na t ion ’s con sum pt iv e a ppe t it e
Evan Lie Hadiwidjaja
Head of Research
+62 21 392 5550 ext. 623
evan.hadiwidjaja@sinarmassekuritas.co.id
Wilbert
Senior Equity Analyst
+62 21 392 5550 ext. 611
wilbert@sinarmassekuritas.co.id
Richard Suherman
Equity Analyst
+62 21 392 5550 ext. 610
richard.suherman@sinarmassekuritas.co.id
All e ye s on I ndone sia con sum pt ion
As 2Q18 is j ust around t he corner, we t urn m ore posit ive on st aples, ret ail,
and m edia as we see a line of fort hcom ing event s st art ing from 2Q18 ( up
t o 2Q19) t o fuel and cat alyze dom est ic consum pt ion. I n addit ion t o t he
aforem ent ioned, governm ent ’s focus t owards t he success of social
assist ance program s should aid m id- t o- low incom e segm ent ’s purchasing
power recovery. The following discussion wit hin our report will furt her t alk
about what lies beneat h t he event s as well as social assist ance program s
wit hin t he period and how t hey could lift dom est ic consum pt ion.
Our t op pick s t o pla y t his t he m e : I N D F ( BUY, TP: 9 ,6 7 5 ) , I CBP
( AD D , TP: 9 ,6 0 0 ) , RALS ( BUY, TP: 1 ,3 5 4 ) , LPPF ( AD D , TP: 1 1 ,7 4 7 ) ,
TLKM ( BUY, TP: 4 ,5 0 0 ) , EXCL ( BUY, TP: 3 ,7 0 0 ) , a nd M N CN ( BUY,
TP: 1 ,6 9 0 ) .
W ha t ’s t he r e in 2 Q1 8 on w a r ds?
2018’s second quart er is going t o be highlight ed wit h a nam e of big event s:
Fast ing & Eid Al- Fit r which norm ally leads t o ~ 40% of annual ret ail sales,
accom panied by t he biggest Regional Elect ions ever covering up t o 160
m illions of cit izen which t end t o benefit m edia and t elco players, and t hen
ended wit h FI FA World Cup 2018 —a once every four years event
considered t o be one of t he biggest event am ongst I ndonesian cit izens
whose m aj orit y are soccer fans. Moreover, we see spending t rend t o
cont inue it s pat h t owards t he end of 3Q18 as it coincides wit h Asian Gam e
2018 held in Jakart a and Palem bang which will fur t her cat alyze dom est ic
consum pt ion from m any different angles. Closing 2018, we expect a
com binat ion of president ial & legislat ive cam paigns conduct ed nat ionwide
t o speed up consum pt ion recovery and com plet ion of social program s.
Each event m ent ioned previously should bring pot ent ials which would likely
t o bolst er consum pt ion as described below.
Fa st ing a nd Eid Al- Fit r ( 1 5 M a y - 1 6 June 2 0 1 8 )
Consum er spending is expect ed t o increase during t his period as m any
seasonal foods and drinks are sold in 1 - t o- 2 hours pre- breakfast ing t im e.
Not only t hat , dem and on clot hing, furnit ure, and m ot orcycles usually rise
approaching t he Eid Al- Fit r celebrat ion. Norm ally at t his t im e, disposable
incom e will be boost ed by t he holiday allowance disbursed no lat er t han
Richardson Raymond
Equity Analyst
+62 21 392 5550 ext. 159
richardson.raymond@sinarmassekuritas.co.id
Paulina
Research Associate
+62 21 392 5550 ext. 611
paulina@sinarmassekuritas.co.id
t wo weeks before t he celebrat ion. Anot her t hing t o not e is t hat last year’s
spending pre- Eid Al- Fit r was recorded soft due t o as it collided wit h new
academ ic year t uit ion paym ent . Hence, lower incom e rem ained t o be spent .
Fort unat ely, 2018 calendar offers different st ory as we expect 2 weeks gap
bet ween Eid Al- Fit r event and new academ ic year.
FI FA W or ld Cup 2 0 1 8 ( 1 4 Ju ne - 1 5 July 2 0 1 8 )
The biggest foot ball com pet it ion in t he world, World Cup 2018, part icipat ed
by 32 count ries will definit ely cat ch t he eyes of every foot ball lovers across
t he world. During t his event , people m ost ly com e t oget her in cafes,
rest aurant s, or t heir hom es t o wat ch t he gam e. Accordingly, it is very
visible t hat snacks and beverages spending would j um p significant ly.
I nt erest ingly, t he World Cup 2018 will be held in Russia w here t he t im e
difference is only + 3 hours from I ndonesia. Therefore, t he gam e will be on air at prim e t im e from 5pm t o 2am . Com pared t o World Cup 2014, t he
gam e was st art ed from 11pm t o 8am and in 2010’s from 6.30pm t o
1.30am . We believe t he prim e t im e fact or along wit h m ore airing t im e
should heat up ent husiasm during t he event and at t ract m ore viewers. We
view t hat World Cup 2018 will be an ext ra boost er for consum pt ion in t his
year.
M or e pr im e t im e t his t im e a r ou nd
W or ld Cup
2010
01.30
2014
02.00
2018
01.00
18.30
21.00
03.00
05.00
02.00
17.00
08.00
19.00
23.00
21.00
Kick - off ( W I B)
22.00
H ost
TV St a t ion
Sout h Africa
Brazil
Russia
RCTI , Global TV
ANTV, TVOne
Trans TV, Trans7
Source: Various News, Sinarmas Investment Research
Tim e t o vot e ( 1 5 Fe br ua r y – 2 7 Ju ne 2 0 1 8 ; 1 3 Oct obe r 2 0 1 8 1 3 Apr il 2 0 1 9 )
On June 27 t h 2018, I ndonesia will hold concurrent regional elect ions in 171
areas, wit h approxim at ely 60% or ~ 160 m illions of t he populat ion will use
t heir vot ing right s. A series of cam paign act ivit ies should t ake place before
t he big day, divided int o non- m edia and m edia cam paigns. The schedule
for non- m edia cam paign st art s from 15 February t o 23 June 2018, w hile for
m edia cam paign from 10 June t o 23 June 2018. Moving forward, in April
2019, I ndonesia will also hold t wo im port ant event s which are president ial
and legislat ive elect ions. Following t his event , cam paign period will st art
from 23 Sept em ber 2018 t o 13 April 2019. I n our view, t hese cam paign
act ivit ies m ay have t he power t o st im ulat e econom y on t he back of rising
m oney circulat ion and higher spending. We view polit ical cam paigns will
benefit st aples and m edia players.
The 1 8 t h Asia n Ga m e s ( 1 8 Augu st - 2 Se pt e m be r 2 0 1 8 )
I ndonesia will host one of t he m ost prest igious sport event , t he 18t h Asian
Gam es t his year. Wit h t ot al 45 Asian count ries part icipat ing, an est im at e of
15,000 at hlet es will gat her in I ndonesia. Not t o m ent ion it is also expect ed
t o at t ract m any spect at ors across Asia who want t o direct ly feel t he
euphoria of Asian Gam es. We view t his event will serve as anot her cat alyst
t o t he dom est ic consum pt ion from m any different angles ranging from
t ravel & t ransport at ion t o local businesses and SMEs locat ed in Jakart a and
Palem bang.
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Strategy | 26 March 2018
W he r e t h e m on e y w ill be com in g f r om
Boost ing consum pt ion and m aint aining purchasing power have apparent ly
becom ing t he governm ent ’s t op of m ind during t he polit ical year. As
reflect ed in t he 2018 St at e Budget , governm ent allocat es I DR 145.5 t n for
energy subsidy ( vs I DR 101 t n in 2017) and I DR 138 t n ( vs I DR 130.2 t n in
2017) for social assist ance program . The aid com es in t he form of
upgraded version of exist ing program s which m ainly involve helping t hose
wit h lower incom e and im proving t heir st andard of living. Below is t he
discussion of t he social assist ance program s.
Socia l a ssist a nce pr ogr a m
70
60 60
60
50
40
30
20
17.3
25.5
20.8
19.8
11.3
10.3
10
25.5
10.5
3.3 3.9
0
PKH
BPNT (food
subsidy)
Dana Desa
2017 Govt budget (IDR tn)
KIP
KJP
JKN
2018 Govt budget (IDR tn)
Source: Various News, Sinarmas Investment Research
PKH ( Pr ogr a m Ke lu a r ga H a r a pa n )
PKH is a program of giving cash t o very poor households based on
predet erm ined t erm s and condit ions ( Condit ional Cash Transfer) . The
governm ent allocat es I DR 17.3 t n and t arget s 10 m illion households as
recipient s wit h each household receiving I DR 1.89 m n/ year. I n addit ion,
t here are also elderly, disabilit y, as well as Papua and West Papua regional
assist ance which am ount s for I DR 2 m n respect ively. Current ly, t he cash is
disbursed t o beneficiary fam ilies ( KPM/ Keluarga Penerim a Manfaat ) who
hold KKS ( Kart u Keluarga Sej aht era) . KKS is gradually shift ing t o debit card
form at which support s disbursem ent t hrough e- warong and Bulog and
ot her saving account feat ures. The first disbursem ent of I DR 500k has been
execut ed in February 2018. The rest is going t o be re- disbursed in t he next
phases on May, August , and Novem ber.
BPN T ( Ba nt ua n Pa nga n N on Tu na i)
BPNT is a new food subsidy schem e which serves as t he com plem ent of
PKH and t he subst it ut e of Rast ra ( Beras pra- sej aht era) . The program
t arget s t he sam e recipient s as PKH does wit h budget allocat ion of
I DR20.8t n. Beneficiary fam ilies accept good qualit y of rice plus eggs at t he
price of I DR110k for free. The first m ont hly disbursem ent has st art ed at
t he end of January 2018 and will cont inue t o be given at every m ont h - end.
D a n a D e sa ( V illa ge Fund)
The village fund is one of t he governm ent program s for regional
developm ent especially aim ed for infrast ruct ure im provem ent and social
welfare. The governm ent allocat es I DR 60 t n for around 75 t housands
villages t his year. This year. several adj ust m ent s are m ade, such as t o
assign larger proport ion of fund for t he less developed villages and t o
allocat e m inim um 30% of fund for labor incent ive program . The changes
are applied wit h t he hope t hat t he cash for work program would be able t o
em ploy villagers and st im ulat e econom y.
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Strategy | 26 March 2018
KI P ( Ka r t u I ndone sia Pint a r ) a n d KJP ( Ka r t u Ja k a r t a Pint a r )
I n order t o elevat e t he educat ion level of I ndonesian fut ure generat ion, KI P
and KJP are dist ribut ed t o st udent s in need whose age ranging from 7 t o 18
years old for KI P and from 6 t o 21 years old for KJP. Governm ent assigns
I DR 10.8 t n of budget for 19.4 m illion st udent s for KI P where each receives
I DR 450k – 1 m n per year based on t heir educat ion level. Meanwhile, KJP is
exclusively given for Jakart a resident s in which kids accept I DR 3 - 5 m n/
year. Budget allocat ion for KJP program am ount s for I DR 3,9 t n wit h 800
st udent s as it s t arget .
KI S ( Ka r t u I ndone sia Se h a t )
To guarant ee t he sust ainabilit y of nat ional healt hcare program , President
Joko Widodo launched t he brand- new KI S t o t he poor t o com plet e t he
exist ing healt h insurance card ( Askes, Jam kesm as, KJS, BPJS Kesehat an) .
Looking at current num bers, t here are 92.4 m illion KI S holders wit h I DR
25.5 t n governm ent budget for t he program . Considering t he im port ance of
healt h t owards cit izens’ living qualit y, t he governm ent aim s t o at t ain 107
m illion KI S holders by 2019.
Addit iona l I D R 8 t r illion t o spe nd t h is ye a r
Allow a n ce s pe r r e cipie n t
( I D R)
Re cipie n t s
D ist r ibu t ion
PKH
1.89m n/ year/ fam ily
10 m n beneficiary fam ilies
4 Phases ( Feb, May, Aug, Nov)
11.3 t n
17.3 t n
BPNT ( food subsidy)
110k/ m ont h/ fam ily
10 m n beneficiary fam ilies
110.000 per m ont h, 25t h
19.8 t n
20.8 t n
~ 800m n/ village
74,985 villages
3 phases ( Jan- Feb 20% , Mar- Jun
40% . Jul- Dec 40%
60 t n
60 t n
KI P
450k - 1m n/ year/ person
19.4 m n st udent s
Sem i annually ( Mar/ Apr and
Aug/ Sep)
10.3 t n
10.5 t n
KJP
3 - 5.4m n/ year/ person
0.8 m n st udent s
Sem i annually ( Mar/ Apr and
Aug/ Sep)
3.3 t n
3.9 t n
25.5 t n
25.5 t n
Pr ogr a m
Dana Desa
KI S
92.4 m n st udent s
Source: Various News, Sinarmas Investment Research
Polit ica l ca m pa ign s
On t op of governm ent ’s social assist ance program s in t he aforem ent ioned,
we view t hat t he upcom ing regional, president ial, and legislat ive cam paigns
will st im ulat e m edium - t o- low incom e segm ent ’s spending t o a cert ain
ext ent given t he pot ent ial m oney circulat ion arising from cam paign
act ivit ies and hist orical pat t ern of t he dom ino effect s.
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Strategy | 26 March 2018
Tot a l bu dge t Tot a l bu dge t
2017
2018
D ow n side r isk :
Despit e of being opt im ist ic t owards consum pt ion recovery brought by
event s and social program s as t he cat alyst s, our research t eam not ed down
a num ber of occurrences which m ight serve as downside risk t o our t hesis.
At t he t im e of t his writ ing, JCI st ood at 6,211 ( - 2.3% YTD) , down from a
record high of 6,693 ( + 5.3% YTD) in Feb ‘18 as I DR 20 t rillion foreign
out flow erased YTD gains. While it get s increasingly harder t o m easure t he
uncert aint y from Tr um p adm inist rat ion, prim arily concerning Rex Tillerson
oust ing ( replaced by Mike Pom peo) and early indicat ion of furt her t ax
reform as well as t rade wars loom ing from recent developm ent , we view
t hat dom est ic econom y st ill rem ains on t rack despit e possible weak 1Q18
reading as export fell below expect at ion and t he lack of cat alyst s t hat
support dom est ic consum pt ion. I n addit ion t o t hat , Harvest season t hat fell
on t he 1st quart er last year, lags t o April t his year. These uncert aint ies and
1.5% YTD currency depreciat ion have changed foreign invest ors’
perspect ives t o I ndonesia as an EM w hich during t he early part of 2018 was
t raded at 18.0x PE.
The ba t t le of online a nd offline
Last year, I nvest m ent Coordinat ing Board ( BKPM) announced t hat ecom m erce invest m ent in I ndonesia had reached USD4.8bn. Big chunk of
t hose invest m ent s went int o unicorn st art - ups ( Tokopedia, Lazada,
Traveloka, Bukalapak, Shopee) . This m ont h, Alibaba inj ect ed anot her
USD2bn for Lazada, placing it as e- com m erce wit h t he highest value of
invest m ent . Provided wit h cont inuous funds inj ect ion, t hose digit al
econom y players m arket t hem selves very aggressively in order t o grab
m arket share. They capt ure t raffic and buyers by providing m assive
discount s at brand, m erchant , and shipping levels alt oget her. I n t he lat est
developm ent , we also observe a num ber of leading plat form s is m ixing
t heir business m odels int o not only C2C but also B2C wit h t ech st uffs or
gadget s, fashions, and F&B for st art ers. While t hese developm ent s benefit
consum er st aples as t he product providers and m edia as t he prom ot ion
place, e- com m erce’s very exist ence cannot be denied t o be a t hreat for
brick and m ort ar ret ail businesses.
5
Strategy | 26 March 2018
Con sum e r st a ple s a n d r e t a il se ct or
Am id a ye a r of gr e a t cha nce s. Last year was a disappoint ing year for
consum pt ion, im pact ed by: 1) lacklust er purchasing power on elect ricit y
t ariff adj ust m ent and 2) people’s t endency t o save m ore t han t o spend.
Throughout 2017, FMCG value has only grown by 2.5% ( vs 7.8% in FY16) ,
worsen by t he fact t hat volum e was down 2.3% ( vs + 2% in FY16) . While
ret ailers, especially t he m iddle- t o- low- end one, have seen lower t han expect ed SSSG. This t im e ar ound, t he m aj or event s st art ing in t he upcom ing
m ont hs unt il 1H19 should prom ise a bet t er at m osphere for consum pt ion as
discussed earlier. Aligned wit h t he sm oot h disbursem ent of social assist ance program s, we expect m oney circulat ion t o rise, spending t o surge,
hence benefit consum er nam es, bot h st aples and ret ailers.
Top pick s for st a ple s. We rem ain opt im ist ic t o see bet t er FMCG dem and
on t he back of pot ent ial consum pt ion recovery t his year. For st aples, we
favor t he m ass producer nam es such as I ndofood group ( I NDF and I CBP) .
Ut ilizing t heir well- known product s t hat t arget all consum er classes coupled
wit h nat ionwide dist ribut ion channel, posit ive volum e growt h should be visible t his year. I NDF would benefit from higher dem and of daily st aples
( flour, cooking oil, m argarine, syr ups et c) during t he fast ing and Eid Al - Fit r.
Meanwhile, increasing consum pt ion on snacks and beverages during World
Cup and Asian Gam es would provide som e fresh air for I CBP.
Top pick s for r e t a ile r s. Hist orically, ret ailers count on Lebaran season
which com m only account s for 30% - 40% of t heir annual sales. I t is also
wort h t o not e t hat recent dat a released by LPPF ( bet t er - t han- expect ed
4Q17 result ) and RALS ( im proving Feb 2018 SSSG) signaling recovery is
around t he corner. Great er growt h part icularly occurred at out er Java area
on behalf of rising com m odit y prices, wit h coal leading t he rally. Being opt im ist ic, we look upon RALS and LPPF w hose t arget m arket are governm ent
social program s’ priorit ies as t he m ain beneficiaries should t heir cust om ers
are back t o shop.
Te le com m un ica t ion se ct or
St r e a m in g t im e ! Short ly, we will face several m aj or event s in t hese upcom ing m ont hs whereas dat a t raffic growt h is expect ed t o im prove rapidly.
Rising dat a t raffic will becom e t he key st rat egy for t elecom m unicat ion indust ry t his year as legacy revenue has experience it s downfall. Eid Al - Fit r,
World Cup 2018, Asian Gam es 2018 as well as regional and president ial
elect ion cam paign will becom e t he m ain t rigger for rising dat a consum pt ion. Hist orically, during Eid al- Fit r weeks, dat a consum pt ion could grow by
around 128.7% YoY or around 21.6% higher t han norm al periods. Moreover, we could count on rising dat a consum pt ion during World Cup and
Asian Gam es as live online st ream ing and m at ch highlight video replay becom e very popular during t hese period. Not t o m ent ion, social m edia and
int ernet forum s will becom e m ore act ive as people t end t o share t he lat est
news and video of t he m at ch. Last ly, polit ical cam paign could also be an
addit ional m aj or force t oward dat a consum pt ion growt h. Overall, we believe rising consum er spending and several huge event s occurrence t his
year could boost dat a t raffic growt h and benefit ed t elecom m unicat ion sect or.
I n t his sect or, our t op picks are TLKM and EXCL due t o: 1) bet t er perform ance ahead, and 2) at t ract ive valuat ion. At current price, TLKM is t raded at
6.2x forward EV/ EBI TDA, - 1.4SD below it s 3- years average EV/ EBI TDA
while EXCL’s st and at 4.1x forward EV/ EBI TDA, - 1.9SD below it s 3- years
average EV/ EBI TDA.
6
Strategy | 26 March 2018
M e dia se ct or
Rising a d- spe n ding. Heading t o 2Q18, we m ost likely see rising ad spending on t he back of rising consum pt ion and m aj or event s for t his year.
As we have point ed out , t here will be several big event s held t his year
nam ely World Cup, Asian Gam es as well as regional and president ial
elect ion cam paign which should bolst er ad - spending. Looking at t he dat a in
2010 and 2014, ad- spending on t he World Cup m ont h ( June & July) had
increased by 15.3% / 31.5% respect ively com pared t o norm al periods.
Despit e having no direct im pact t oward m edia com panies under our
coverage, t he rising consum pt ion effect could t rigger higher overall ad spending. Not t o m ent ion, Asian Gam es will also be held one m ont h right
aft er t he World Cup ended, which we believe could cont ribut e sim ilar
port ion t oward overall ad spending. Wort h t o not e, SCTV under SCMA has
t he broadcast ing right s for Asian Gam es. Last ly, we also have our regional
and president ial elect ion m edia cam paign. Flashing back t o 2014, ad
spending from polit ical cam paign during elect ion grew by 89% YoY where
RCTI under MNCN posit ioned as t he second biggest port ion of ad spending
in t he last elect ion cam paign. Overall, ad- spending should significant ly
im prove t his year. Furt her m ore, rising consum pt ion effect could also t rigger
higher ad- spending especially from FMCG com panies and also e- com m erce.
Taking everyt hing int o considerat ion, we rem ain our posit ive st ance on
m edia sect or.
Our t op picks for t he sect or is MNCN ( 12.5x forward PE, - 2.4SD below 5
years avg PE) as it owns a m ore at t ract ive valuat ion com pared t o SCMA
( 25.0x forward PE, - 1.1 SD below 5 years avg PE) . However, we also like
SCMA as it has exposur e t oward Asian Gam es. Overall, we t hink bot h
com panies will perform well t his year support ed by higher overall ad
spending.
Ad spe nding 2 0 1 0 a n d 2 0 1 4
Source: Nielsen, Sinarmas Investment Research
7
Strategy | 26 March 2018
W or ld Cu p 2 0 1 8 : Ge r m a n y t o lift t he t r oph y
The 2018 World Cup will be held in Russia from June t o July 2018. This
t im e around, unlike t he pr evious World Cup bracket s, t here are no “ group
of deat hs” ( t hough som e observers m ight say Group F is, but wit h aging
I brahim ovic and Sout h Korea being a shadow of t heir own past , Germ any is
alm ost cert ain t o cruise t heir way past t he group st ages) . That being said,
t his is The World Cup w here any pot ent ial surprises could happen such as
Egypt overt hrowing Russia, Nigeria’s neck - in- neck bat t le wit h Croat ia t o be
Argent ina’s plus one as well as Colom bia upset t ing Poland t o be Group’s
Winner.
Going forward, round of 16 and quart er finals should be rat her st raight
forward. I nt erest ing t o not e is Spain vs Argent ina w here Messi is expect ed
t o bring his side vict orious against arguably t he best goalkeeper in t he
world, Spain’s De Gea. Anot her int erest ing gam e is Brazil vs Belgium where
bot h squads are st ill very young and abounds w it h t alent s. However,
Brazil’s st rong leadership qualit y in t he form of Alves as well as Thiago
Silva which Belgium lacks should give t hem t he edge.
Sem i- finals are t ricky. On paper, France should have t he upper hand given
t heir 3- layer squad st rengt h backed by t he ast onishing t alent s of t heir
young st ars Griezm ann, Dem bele and Mbappe. But t hey are facing a squad
which has Cout inho and Neym ar. This is a t ough call but our fait h is on t he
Brazil’s m agicians. For Argent ina vs Germ any, t his t im e t he “ flea” argum ent
will not work because t his is Germ any, t he j uggernaut of big t im e
t ournam ent s. Consist ent ly ranks in t he t op 4, Germ any has everyt hing t hey
need, including possibly t he st rongest m idfield in t he gam e. Wit h Ozil and
Kross at t he cent re, as t he t eam ’s passing m et ronom e, as well as Thom as
Muller’s goal- get t er inst inct , Germ an should out shine t he brilliance Messi.
The Final will be a show of resilience bet ween Brazil’s persist ence at t ack vs
Germ any’s unrelent ing defence. Neym ar will be t oo m uch for Hum m els t o
handle, given his lack of speed. Furt herm ore, Philip Lahm ’s ret irem ent m ay
also leave Germ any slight ly disorient ed. But t his is Der Panzer we are
t alking about . I f Kim m ich / Boat eng can collapse on Neym ar / Cout inho,
Brazil’s aggressive offense is sure t o be cont ained. Toni Kroos has becom e
t he spirit ual leader and cent re- piece of Germ any’s play w hich provides
st abilit y t o t he ent ire syst em . I f him and Ozil are in sync, Germ an will
undoubt edly win.
Our FI FA W or ld Cup 2 0 1 8 pr e dict ion s
* Feel free t o cast your vot e via em ail t o: research@sinarm assekurit as.co.id
* * Pooling result s will be announced on June 12 t h 2018
8
Strategy | 26 March 2018
SI N ARM AS SEKURI TAS I N VESTM EN T RATI N GS GUI D E
BUY: Share price m ay rise by m ore t han 15% over t he next 12 m ont hs.
AD D : Share price m ay range bet ween 10% t o 15% over t he next 12 m ont hs.
N EUTRAL: Share price m ay range bet ween –10% t o + 10% over t he next 12 m ont hs.
RED UCE: Share price m ay range bet ween –10% t o –15% over t he next 12 m ont hs.
SELL: Share price m ay fall by m ore t han 15% over t he next 12 m ont hs.
D I SCLAI M ER
This report has been prepared by PT Sinarm as Sekurit as, an affiliat e of Sinarm as Group.
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9
Strategy | 26 March 2018
2018: A Year of Never Ending Festive Mood
26 March 2018
A supe r pa ck e d y e a r of f e st ive e ve nt s t h a t ca n r e v ive t he
na t ion ’s con sum pt iv e a ppe t it e
Evan Lie Hadiwidjaja
Head of Research
+62 21 392 5550 ext. 623
evan.hadiwidjaja@sinarmassekuritas.co.id
Wilbert
Senior Equity Analyst
+62 21 392 5550 ext. 611
wilbert@sinarmassekuritas.co.id
Richard Suherman
Equity Analyst
+62 21 392 5550 ext. 610
richard.suherman@sinarmassekuritas.co.id
All e ye s on I ndone sia con sum pt ion
As 2Q18 is j ust around t he corner, we t urn m ore posit ive on st aples, ret ail,
and m edia as we see a line of fort hcom ing event s st art ing from 2Q18 ( up
t o 2Q19) t o fuel and cat alyze dom est ic consum pt ion. I n addit ion t o t he
aforem ent ioned, governm ent ’s focus t owards t he success of social
assist ance program s should aid m id- t o- low incom e segm ent ’s purchasing
power recovery. The following discussion wit hin our report will furt her t alk
about what lies beneat h t he event s as well as social assist ance program s
wit hin t he period and how t hey could lift dom est ic consum pt ion.
Our t op pick s t o pla y t his t he m e : I N D F ( BUY, TP: 9 ,6 7 5 ) , I CBP
( AD D , TP: 9 ,6 0 0 ) , RALS ( BUY, TP: 1 ,3 5 4 ) , LPPF ( AD D , TP: 1 1 ,7 4 7 ) ,
TLKM ( BUY, TP: 4 ,5 0 0 ) , EXCL ( BUY, TP: 3 ,7 0 0 ) , a nd M N CN ( BUY,
TP: 1 ,6 9 0 ) .
W ha t ’s t he r e in 2 Q1 8 on w a r ds?
2018’s second quart er is going t o be highlight ed wit h a nam e of big event s:
Fast ing & Eid Al- Fit r which norm ally leads t o ~ 40% of annual ret ail sales,
accom panied by t he biggest Regional Elect ions ever covering up t o 160
m illions of cit izen which t end t o benefit m edia and t elco players, and t hen
ended wit h FI FA World Cup 2018 —a once every four years event
considered t o be one of t he biggest event am ongst I ndonesian cit izens
whose m aj orit y are soccer fans. Moreover, we see spending t rend t o
cont inue it s pat h t owards t he end of 3Q18 as it coincides wit h Asian Gam e
2018 held in Jakart a and Palem bang which will fur t her cat alyze dom est ic
consum pt ion from m any different angles. Closing 2018, we expect a
com binat ion of president ial & legislat ive cam paigns conduct ed nat ionwide
t o speed up consum pt ion recovery and com plet ion of social program s.
Each event m ent ioned previously should bring pot ent ials which would likely
t o bolst er consum pt ion as described below.
Fa st ing a nd Eid Al- Fit r ( 1 5 M a y - 1 6 June 2 0 1 8 )
Consum er spending is expect ed t o increase during t his period as m any
seasonal foods and drinks are sold in 1 - t o- 2 hours pre- breakfast ing t im e.
Not only t hat , dem and on clot hing, furnit ure, and m ot orcycles usually rise
approaching t he Eid Al- Fit r celebrat ion. Norm ally at t his t im e, disposable
incom e will be boost ed by t he holiday allowance disbursed no lat er t han
Richardson Raymond
Equity Analyst
+62 21 392 5550 ext. 159
richardson.raymond@sinarmassekuritas.co.id
Paulina
Research Associate
+62 21 392 5550 ext. 611
paulina@sinarmassekuritas.co.id
t wo weeks before t he celebrat ion. Anot her t hing t o not e is t hat last year’s
spending pre- Eid Al- Fit r was recorded soft due t o as it collided wit h new
academ ic year t uit ion paym ent . Hence, lower incom e rem ained t o be spent .
Fort unat ely, 2018 calendar offers different st ory as we expect 2 weeks gap
bet ween Eid Al- Fit r event and new academ ic year.
FI FA W or ld Cup 2 0 1 8 ( 1 4 Ju ne - 1 5 July 2 0 1 8 )
The biggest foot ball com pet it ion in t he world, World Cup 2018, part icipat ed
by 32 count ries will definit ely cat ch t he eyes of every foot ball lovers across
t he world. During t his event , people m ost ly com e t oget her in cafes,
rest aurant s, or t heir hom es t o wat ch t he gam e. Accordingly, it is very
visible t hat snacks and beverages spending would j um p significant ly.
I nt erest ingly, t he World Cup 2018 will be held in Russia w here t he t im e
difference is only + 3 hours from I ndonesia. Therefore, t he gam e will be on air at prim e t im e from 5pm t o 2am . Com pared t o World Cup 2014, t he
gam e was st art ed from 11pm t o 8am and in 2010’s from 6.30pm t o
1.30am . We believe t he prim e t im e fact or along wit h m ore airing t im e
should heat up ent husiasm during t he event and at t ract m ore viewers. We
view t hat World Cup 2018 will be an ext ra boost er for consum pt ion in t his
year.
M or e pr im e t im e t his t im e a r ou nd
W or ld Cup
2010
01.30
2014
02.00
2018
01.00
18.30
21.00
03.00
05.00
02.00
17.00
08.00
19.00
23.00
21.00
Kick - off ( W I B)
22.00
H ost
TV St a t ion
Sout h Africa
Brazil
Russia
RCTI , Global TV
ANTV, TVOne
Trans TV, Trans7
Source: Various News, Sinarmas Investment Research
Tim e t o vot e ( 1 5 Fe br ua r y – 2 7 Ju ne 2 0 1 8 ; 1 3 Oct obe r 2 0 1 8 1 3 Apr il 2 0 1 9 )
On June 27 t h 2018, I ndonesia will hold concurrent regional elect ions in 171
areas, wit h approxim at ely 60% or ~ 160 m illions of t he populat ion will use
t heir vot ing right s. A series of cam paign act ivit ies should t ake place before
t he big day, divided int o non- m edia and m edia cam paigns. The schedule
for non- m edia cam paign st art s from 15 February t o 23 June 2018, w hile for
m edia cam paign from 10 June t o 23 June 2018. Moving forward, in April
2019, I ndonesia will also hold t wo im port ant event s which are president ial
and legislat ive elect ions. Following t his event , cam paign period will st art
from 23 Sept em ber 2018 t o 13 April 2019. I n our view, t hese cam paign
act ivit ies m ay have t he power t o st im ulat e econom y on t he back of rising
m oney circulat ion and higher spending. We view polit ical cam paigns will
benefit st aples and m edia players.
The 1 8 t h Asia n Ga m e s ( 1 8 Augu st - 2 Se pt e m be r 2 0 1 8 )
I ndonesia will host one of t he m ost prest igious sport event , t he 18t h Asian
Gam es t his year. Wit h t ot al 45 Asian count ries part icipat ing, an est im at e of
15,000 at hlet es will gat her in I ndonesia. Not t o m ent ion it is also expect ed
t o at t ract m any spect at ors across Asia who want t o direct ly feel t he
euphoria of Asian Gam es. We view t his event will serve as anot her cat alyst
t o t he dom est ic consum pt ion from m any different angles ranging from
t ravel & t ransport at ion t o local businesses and SMEs locat ed in Jakart a and
Palem bang.
2
Strategy | 26 March 2018
W he r e t h e m on e y w ill be com in g f r om
Boost ing consum pt ion and m aint aining purchasing power have apparent ly
becom ing t he governm ent ’s t op of m ind during t he polit ical year. As
reflect ed in t he 2018 St at e Budget , governm ent allocat es I DR 145.5 t n for
energy subsidy ( vs I DR 101 t n in 2017) and I DR 138 t n ( vs I DR 130.2 t n in
2017) for social assist ance program . The aid com es in t he form of
upgraded version of exist ing program s which m ainly involve helping t hose
wit h lower incom e and im proving t heir st andard of living. Below is t he
discussion of t he social assist ance program s.
Socia l a ssist a nce pr ogr a m
70
60 60
60
50
40
30
20
17.3
25.5
20.8
19.8
11.3
10.3
10
25.5
10.5
3.3 3.9
0
PKH
BPNT (food
subsidy)
Dana Desa
2017 Govt budget (IDR tn)
KIP
KJP
JKN
2018 Govt budget (IDR tn)
Source: Various News, Sinarmas Investment Research
PKH ( Pr ogr a m Ke lu a r ga H a r a pa n )
PKH is a program of giving cash t o very poor households based on
predet erm ined t erm s and condit ions ( Condit ional Cash Transfer) . The
governm ent allocat es I DR 17.3 t n and t arget s 10 m illion households as
recipient s wit h each household receiving I DR 1.89 m n/ year. I n addit ion,
t here are also elderly, disabilit y, as well as Papua and West Papua regional
assist ance which am ount s for I DR 2 m n respect ively. Current ly, t he cash is
disbursed t o beneficiary fam ilies ( KPM/ Keluarga Penerim a Manfaat ) who
hold KKS ( Kart u Keluarga Sej aht era) . KKS is gradually shift ing t o debit card
form at which support s disbursem ent t hrough e- warong and Bulog and
ot her saving account feat ures. The first disbursem ent of I DR 500k has been
execut ed in February 2018. The rest is going t o be re- disbursed in t he next
phases on May, August , and Novem ber.
BPN T ( Ba nt ua n Pa nga n N on Tu na i)
BPNT is a new food subsidy schem e which serves as t he com plem ent of
PKH and t he subst it ut e of Rast ra ( Beras pra- sej aht era) . The program
t arget s t he sam e recipient s as PKH does wit h budget allocat ion of
I DR20.8t n. Beneficiary fam ilies accept good qualit y of rice plus eggs at t he
price of I DR110k for free. The first m ont hly disbursem ent has st art ed at
t he end of January 2018 and will cont inue t o be given at every m ont h - end.
D a n a D e sa ( V illa ge Fund)
The village fund is one of t he governm ent program s for regional
developm ent especially aim ed for infrast ruct ure im provem ent and social
welfare. The governm ent allocat es I DR 60 t n for around 75 t housands
villages t his year. This year. several adj ust m ent s are m ade, such as t o
assign larger proport ion of fund for t he less developed villages and t o
allocat e m inim um 30% of fund for labor incent ive program . The changes
are applied wit h t he hope t hat t he cash for work program would be able t o
em ploy villagers and st im ulat e econom y.
3
Strategy | 26 March 2018
KI P ( Ka r t u I ndone sia Pint a r ) a n d KJP ( Ka r t u Ja k a r t a Pint a r )
I n order t o elevat e t he educat ion level of I ndonesian fut ure generat ion, KI P
and KJP are dist ribut ed t o st udent s in need whose age ranging from 7 t o 18
years old for KI P and from 6 t o 21 years old for KJP. Governm ent assigns
I DR 10.8 t n of budget for 19.4 m illion st udent s for KI P where each receives
I DR 450k – 1 m n per year based on t heir educat ion level. Meanwhile, KJP is
exclusively given for Jakart a resident s in which kids accept I DR 3 - 5 m n/
year. Budget allocat ion for KJP program am ount s for I DR 3,9 t n wit h 800
st udent s as it s t arget .
KI S ( Ka r t u I ndone sia Se h a t )
To guarant ee t he sust ainabilit y of nat ional healt hcare program , President
Joko Widodo launched t he brand- new KI S t o t he poor t o com plet e t he
exist ing healt h insurance card ( Askes, Jam kesm as, KJS, BPJS Kesehat an) .
Looking at current num bers, t here are 92.4 m illion KI S holders wit h I DR
25.5 t n governm ent budget for t he program . Considering t he im port ance of
healt h t owards cit izens’ living qualit y, t he governm ent aim s t o at t ain 107
m illion KI S holders by 2019.
Addit iona l I D R 8 t r illion t o spe nd t h is ye a r
Allow a n ce s pe r r e cipie n t
( I D R)
Re cipie n t s
D ist r ibu t ion
PKH
1.89m n/ year/ fam ily
10 m n beneficiary fam ilies
4 Phases ( Feb, May, Aug, Nov)
11.3 t n
17.3 t n
BPNT ( food subsidy)
110k/ m ont h/ fam ily
10 m n beneficiary fam ilies
110.000 per m ont h, 25t h
19.8 t n
20.8 t n
~ 800m n/ village
74,985 villages
3 phases ( Jan- Feb 20% , Mar- Jun
40% . Jul- Dec 40%
60 t n
60 t n
KI P
450k - 1m n/ year/ person
19.4 m n st udent s
Sem i annually ( Mar/ Apr and
Aug/ Sep)
10.3 t n
10.5 t n
KJP
3 - 5.4m n/ year/ person
0.8 m n st udent s
Sem i annually ( Mar/ Apr and
Aug/ Sep)
3.3 t n
3.9 t n
25.5 t n
25.5 t n
Pr ogr a m
Dana Desa
KI S
92.4 m n st udent s
Source: Various News, Sinarmas Investment Research
Polit ica l ca m pa ign s
On t op of governm ent ’s social assist ance program s in t he aforem ent ioned,
we view t hat t he upcom ing regional, president ial, and legislat ive cam paigns
will st im ulat e m edium - t o- low incom e segm ent ’s spending t o a cert ain
ext ent given t he pot ent ial m oney circulat ion arising from cam paign
act ivit ies and hist orical pat t ern of t he dom ino effect s.
4
Strategy | 26 March 2018
Tot a l bu dge t Tot a l bu dge t
2017
2018
D ow n side r isk :
Despit e of being opt im ist ic t owards consum pt ion recovery brought by
event s and social program s as t he cat alyst s, our research t eam not ed down
a num ber of occurrences which m ight serve as downside risk t o our t hesis.
At t he t im e of t his writ ing, JCI st ood at 6,211 ( - 2.3% YTD) , down from a
record high of 6,693 ( + 5.3% YTD) in Feb ‘18 as I DR 20 t rillion foreign
out flow erased YTD gains. While it get s increasingly harder t o m easure t he
uncert aint y from Tr um p adm inist rat ion, prim arily concerning Rex Tillerson
oust ing ( replaced by Mike Pom peo) and early indicat ion of furt her t ax
reform as well as t rade wars loom ing from recent developm ent , we view
t hat dom est ic econom y st ill rem ains on t rack despit e possible weak 1Q18
reading as export fell below expect at ion and t he lack of cat alyst s t hat
support dom est ic consum pt ion. I n addit ion t o t hat , Harvest season t hat fell
on t he 1st quart er last year, lags t o April t his year. These uncert aint ies and
1.5% YTD currency depreciat ion have changed foreign invest ors’
perspect ives t o I ndonesia as an EM w hich during t he early part of 2018 was
t raded at 18.0x PE.
The ba t t le of online a nd offline
Last year, I nvest m ent Coordinat ing Board ( BKPM) announced t hat ecom m erce invest m ent in I ndonesia had reached USD4.8bn. Big chunk of
t hose invest m ent s went int o unicorn st art - ups ( Tokopedia, Lazada,
Traveloka, Bukalapak, Shopee) . This m ont h, Alibaba inj ect ed anot her
USD2bn for Lazada, placing it as e- com m erce wit h t he highest value of
invest m ent . Provided wit h cont inuous funds inj ect ion, t hose digit al
econom y players m arket t hem selves very aggressively in order t o grab
m arket share. They capt ure t raffic and buyers by providing m assive
discount s at brand, m erchant , and shipping levels alt oget her. I n t he lat est
developm ent , we also observe a num ber of leading plat form s is m ixing
t heir business m odels int o not only C2C but also B2C wit h t ech st uffs or
gadget s, fashions, and F&B for st art ers. While t hese developm ent s benefit
consum er st aples as t he product providers and m edia as t he prom ot ion
place, e- com m erce’s very exist ence cannot be denied t o be a t hreat for
brick and m ort ar ret ail businesses.
5
Strategy | 26 March 2018
Con sum e r st a ple s a n d r e t a il se ct or
Am id a ye a r of gr e a t cha nce s. Last year was a disappoint ing year for
consum pt ion, im pact ed by: 1) lacklust er purchasing power on elect ricit y
t ariff adj ust m ent and 2) people’s t endency t o save m ore t han t o spend.
Throughout 2017, FMCG value has only grown by 2.5% ( vs 7.8% in FY16) ,
worsen by t he fact t hat volum e was down 2.3% ( vs + 2% in FY16) . While
ret ailers, especially t he m iddle- t o- low- end one, have seen lower t han expect ed SSSG. This t im e ar ound, t he m aj or event s st art ing in t he upcom ing
m ont hs unt il 1H19 should prom ise a bet t er at m osphere for consum pt ion as
discussed earlier. Aligned wit h t he sm oot h disbursem ent of social assist ance program s, we expect m oney circulat ion t o rise, spending t o surge,
hence benefit consum er nam es, bot h st aples and ret ailers.
Top pick s for st a ple s. We rem ain opt im ist ic t o see bet t er FMCG dem and
on t he back of pot ent ial consum pt ion recovery t his year. For st aples, we
favor t he m ass producer nam es such as I ndofood group ( I NDF and I CBP) .
Ut ilizing t heir well- known product s t hat t arget all consum er classes coupled
wit h nat ionwide dist ribut ion channel, posit ive volum e growt h should be visible t his year. I NDF would benefit from higher dem and of daily st aples
( flour, cooking oil, m argarine, syr ups et c) during t he fast ing and Eid Al - Fit r.
Meanwhile, increasing consum pt ion on snacks and beverages during World
Cup and Asian Gam es would provide som e fresh air for I CBP.
Top pick s for r e t a ile r s. Hist orically, ret ailers count on Lebaran season
which com m only account s for 30% - 40% of t heir annual sales. I t is also
wort h t o not e t hat recent dat a released by LPPF ( bet t er - t han- expect ed
4Q17 result ) and RALS ( im proving Feb 2018 SSSG) signaling recovery is
around t he corner. Great er growt h part icularly occurred at out er Java area
on behalf of rising com m odit y prices, wit h coal leading t he rally. Being opt im ist ic, we look upon RALS and LPPF w hose t arget m arket are governm ent
social program s’ priorit ies as t he m ain beneficiaries should t heir cust om ers
are back t o shop.
Te le com m un ica t ion se ct or
St r e a m in g t im e ! Short ly, we will face several m aj or event s in t hese upcom ing m ont hs whereas dat a t raffic growt h is expect ed t o im prove rapidly.
Rising dat a t raffic will becom e t he key st rat egy for t elecom m unicat ion indust ry t his year as legacy revenue has experience it s downfall. Eid Al - Fit r,
World Cup 2018, Asian Gam es 2018 as well as regional and president ial
elect ion cam paign will becom e t he m ain t rigger for rising dat a consum pt ion. Hist orically, during Eid al- Fit r weeks, dat a consum pt ion could grow by
around 128.7% YoY or around 21.6% higher t han norm al periods. Moreover, we could count on rising dat a consum pt ion during World Cup and
Asian Gam es as live online st ream ing and m at ch highlight video replay becom e very popular during t hese period. Not t o m ent ion, social m edia and
int ernet forum s will becom e m ore act ive as people t end t o share t he lat est
news and video of t he m at ch. Last ly, polit ical cam paign could also be an
addit ional m aj or force t oward dat a consum pt ion growt h. Overall, we believe rising consum er spending and several huge event s occurrence t his
year could boost dat a t raffic growt h and benefit ed t elecom m unicat ion sect or.
I n t his sect or, our t op picks are TLKM and EXCL due t o: 1) bet t er perform ance ahead, and 2) at t ract ive valuat ion. At current price, TLKM is t raded at
6.2x forward EV/ EBI TDA, - 1.4SD below it s 3- years average EV/ EBI TDA
while EXCL’s st and at 4.1x forward EV/ EBI TDA, - 1.9SD below it s 3- years
average EV/ EBI TDA.
6
Strategy | 26 March 2018
M e dia se ct or
Rising a d- spe n ding. Heading t o 2Q18, we m ost likely see rising ad spending on t he back of rising consum pt ion and m aj or event s for t his year.
As we have point ed out , t here will be several big event s held t his year
nam ely World Cup, Asian Gam es as well as regional and president ial
elect ion cam paign which should bolst er ad - spending. Looking at t he dat a in
2010 and 2014, ad- spending on t he World Cup m ont h ( June & July) had
increased by 15.3% / 31.5% respect ively com pared t o norm al periods.
Despit e having no direct im pact t oward m edia com panies under our
coverage, t he rising consum pt ion effect could t rigger higher overall ad spending. Not t o m ent ion, Asian Gam es will also be held one m ont h right
aft er t he World Cup ended, which we believe could cont ribut e sim ilar
port ion t oward overall ad spending. Wort h t o not e, SCTV under SCMA has
t he broadcast ing right s for Asian Gam es. Last ly, we also have our regional
and president ial elect ion m edia cam paign. Flashing back t o 2014, ad
spending from polit ical cam paign during elect ion grew by 89% YoY where
RCTI under MNCN posit ioned as t he second biggest port ion of ad spending
in t he last elect ion cam paign. Overall, ad- spending should significant ly
im prove t his year. Furt her m ore, rising consum pt ion effect could also t rigger
higher ad- spending especially from FMCG com panies and also e- com m erce.
Taking everyt hing int o considerat ion, we rem ain our posit ive st ance on
m edia sect or.
Our t op picks for t he sect or is MNCN ( 12.5x forward PE, - 2.4SD below 5
years avg PE) as it owns a m ore at t ract ive valuat ion com pared t o SCMA
( 25.0x forward PE, - 1.1 SD below 5 years avg PE) . However, we also like
SCMA as it has exposur e t oward Asian Gam es. Overall, we t hink bot h
com panies will perform well t his year support ed by higher overall ad
spending.
Ad spe nding 2 0 1 0 a n d 2 0 1 4
Source: Nielsen, Sinarmas Investment Research
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Strategy | 26 March 2018
W or ld Cu p 2 0 1 8 : Ge r m a n y t o lift t he t r oph y
The 2018 World Cup will be held in Russia from June t o July 2018. This
t im e around, unlike t he pr evious World Cup bracket s, t here are no “ group
of deat hs” ( t hough som e observers m ight say Group F is, but wit h aging
I brahim ovic and Sout h Korea being a shadow of t heir own past , Germ any is
alm ost cert ain t o cruise t heir way past t he group st ages) . That being said,
t his is The World Cup w here any pot ent ial surprises could happen such as
Egypt overt hrowing Russia, Nigeria’s neck - in- neck bat t le wit h Croat ia t o be
Argent ina’s plus one as well as Colom bia upset t ing Poland t o be Group’s
Winner.
Going forward, round of 16 and quart er finals should be rat her st raight
forward. I nt erest ing t o not e is Spain vs Argent ina w here Messi is expect ed
t o bring his side vict orious against arguably t he best goalkeeper in t he
world, Spain’s De Gea. Anot her int erest ing gam e is Brazil vs Belgium where
bot h squads are st ill very young and abounds w it h t alent s. However,
Brazil’s st rong leadership qualit y in t he form of Alves as well as Thiago
Silva which Belgium lacks should give t hem t he edge.
Sem i- finals are t ricky. On paper, France should have t he upper hand given
t heir 3- layer squad st rengt h backed by t he ast onishing t alent s of t heir
young st ars Griezm ann, Dem bele and Mbappe. But t hey are facing a squad
which has Cout inho and Neym ar. This is a t ough call but our fait h is on t he
Brazil’s m agicians. For Argent ina vs Germ any, t his t im e t he “ flea” argum ent
will not work because t his is Germ any, t he j uggernaut of big t im e
t ournam ent s. Consist ent ly ranks in t he t op 4, Germ any has everyt hing t hey
need, including possibly t he st rongest m idfield in t he gam e. Wit h Ozil and
Kross at t he cent re, as t he t eam ’s passing m et ronom e, as well as Thom as
Muller’s goal- get t er inst inct , Germ an should out shine t he brilliance Messi.
The Final will be a show of resilience bet ween Brazil’s persist ence at t ack vs
Germ any’s unrelent ing defence. Neym ar will be t oo m uch for Hum m els t o
handle, given his lack of speed. Furt herm ore, Philip Lahm ’s ret irem ent m ay
also leave Germ any slight ly disorient ed. But t his is Der Panzer we are
t alking about . I f Kim m ich / Boat eng can collapse on Neym ar / Cout inho,
Brazil’s aggressive offense is sure t o be cont ained. Toni Kroos has becom e
t he spirit ual leader and cent re- piece of Germ any’s play w hich provides
st abilit y t o t he ent ire syst em . I f him and Ozil are in sync, Germ an will
undoubt edly win.
Our FI FA W or ld Cup 2 0 1 8 pr e dict ion s
* Feel free t o cast your vot e via em ail t o: research@sinarm assekurit as.co.id
* * Pooling result s will be announced on June 12 t h 2018
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Strategy | 26 March 2018
SI N ARM AS SEKURI TAS I N VESTM EN T RATI N GS GUI D E
BUY: Share price m ay rise by m ore t han 15% over t he next 12 m ont hs.
AD D : Share price m ay range bet ween 10% t o 15% over t he next 12 m ont hs.
N EUTRAL: Share price m ay range bet ween –10% t o + 10% over t he next 12 m ont hs.
RED UCE: Share price m ay range bet ween –10% t o –15% over t he next 12 m ont hs.
SELL: Share price m ay fall by m ore t han 15% over t he next 12 m ont hs.
D I SCLAI M ER
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Strategy | 26 March 2018