PT Telkom Indonesia (TLKM IJ; Hold) Navigating transition and recovery
Premier Insight
PT Telkom Indonesia (TLKM IJ; Hold)
Navigating transition and recovery
6,100
Less disruption to data pricing improvement.
8,000
7,000
6,000
Employees’ retirement may ease margin decline.
6,000
5,900
Only minor impact from Rupiah weakness in short term.
5,800
4,000
Rp bn
JCI Index
5,000
5,700
3,000
5,600
2,000
5,500
1,000
5,400
14-Sep
13-Sep
7-Sep
12-Sep
6-Sep
10-Sep
5-Sep
4-Sep
3-Sep
31-Aug
30-Aug
29-Aug
28-Aug
27-Aug
24-Aug
23-Aug
21-Aug
20-Aug
16-Aug
15-Aug
14-Aug
13-Aug
-
Foreign net buy (sell)
1,000
20%
800
15%
10%
400
5%
200
0%
14-Sep
13-Sep
12-Sep
10-Sep
7-Sep
6-Sep
5-Sep
4-Sep
3-Sep
31-Aug
(400)
30-Aug
(200)
29-Aug
-
-5%
-10%
(600)
-15%
% net buy/market turnover
600
Net buy (sell) in Rp bn
Equity | Indonesia | Research Daily
JCI Index
(800)
-20%
(1,000)
(1,200)
-25%
Key Indexes
Index
JCI
Closing
1 day
1 year
1.2%
1.0%
-6.7%
937
1.6%
-4.1%
-13.2%
26,155
0.0%
17.5%
5.8%
1,722
0.2%
3.7%
-1.8%
HSI
27,286
1.0%
-1.9%
-8.8%
NKY
22,821
1.0%
14.6%
1.4%
FTSE
7,304
0.3%
1.2%
-5.0%
FSSTI
3,161
0.9%
-1.5%
-7.1%
23
0.1%
-15.5%
-19.8%
DJI
SET
EIDO
Commodity price
Commodities
Last price
Ret 1 day Ret 1 year
(in USD)
Oil/barrel (WTI)
69.0
0.6%
38.3%
542.9
-0.9%
-21.6%
Soy/bushel
7.9
-0.3%
-17.5%
Rubber/kg
1.5
-1.1%
-22.2%
Nic kel/tonne
12,574
0.4%
13.0%
Tins/tonne
19,046
0.0%
-7.7%
Copper/tonne
5,951
-1.0%
-7.8%
Gold/try.oz (Spot)
1,194
-0.7%
-9.6%
Coal/tonne
115.4
0.1%
15.4%
2.9
-1.7%
-8.7%
516.3
0.9%
15.0%
CPO/tonne
Corn/bushel
Wheat/bushel (USd)
Source : Bloomberg
Less pricing disruption. Telkomsel (Tsel) indicated it recently experienced
healthier competition vs. 1H18, thanks to less pricing disruption from observed
starter pack market so far. Although certain area might be more competitive
than average, Tsel plans to keep premium (20-30%; sometimes max. 40% in
competitive areas) vs. competitors. Tsel may increase data pricing again
between Oct-Nov (depend on competition, incl. small players). We expect
TLKM’s 2H18 revenue to grow +9%YoY, as non-Telkomsel continue its strong
revenue growth (implying 2H18F +26%YoY), while Tsel’s revenue slightly
recover to +4%YoY in 2H18F.
Employees’ retirement may ease margin decline. Company said c.7K
personnel (mostly non-Tsel; c.2K personnel/year in 2018F-20F), accounted c.
30% of FY17 TLKM’s total personnel, will enter normal retirement during 2018F25F. We expect personnel expense to revenue ratio to gradually decline to 9% in
2023F from 11% in 2018F. We still estimate TLKM’s EBITDA margin to decline to
43% in 2020 from 45% in 2018, but stabilize temporarily during 2021F-23F.
YTD
5,931
LQ45
Maintain HOLD TP Rp3,700, at +1STD 7-yr mean.
Manageable forex risk in short term. We estimate 2018F/19F capex paid
(settled) in USD portion of total capex at 17% for TLKM’s group and 10% for
Tsel, based on discussion with company. Tsel might also be able to negotiate
Rupiah weakness impact to its USD-paid capex if forex rate reached certain
threshold, according to company. In terms of debt, TLKM’s USD exposure is
relatively small at c.3%, similar to ISAT (c. 2%), but below EXCL (c.31%) as of
2Q18.
Reduce TP by 5% to Rp3,700 – Maintain HOLD. We use DCF to arrive to our
TP with 10% WACC. We decreased TP by 5% mainly because we cut 18F/19F
EBITDA by 4/7% (slower margin recovery). TLKM trades at 8.5x 19F EV/EBITDA
(adj. with ownership in Tsel). Current 19F EV/EBITDA is at 7% premium to avg.
regional excl. Indonesia, but 19F P/E is similar (Figure 10). Our TP translates to
8.9x 19F EV/EBITDA, at +1STD of 7-yr mean. We put a Hold to TLKM as we
view: 1) Although competition is healthier vs. 1H18, 2018F-19F data pricing
might yet enough to expand blended EBITDA margin in 2019F; 2) Magnitude of
data pricing increase in outer Java might be limited for now as est. smartphone
penetration there is still at c.50%. Upside risk: Data pricing, cost saving effort,
Indihome.
Year To 31 Dec
Revenue (RpBn)
EBITDA (RpBn)
EBITDA Growth (%)
Net Profit (RpBn)
EPS (Rp)
EPS Growth (%)
Net Gearing (%)
PER (x)
PBV (x)
Dividend Yield (%)
EV/EBITDA (x)
Source: TLKM, IndoPremier
Refer to Important disclosures in the last page of this report
2016A
116,333
59,498
15.7
19,352
195
24.9
1.9
17.7
4.1
4.0
9.0
2017A
128,256
64,609
8.6
22,145
224
14.4
9.2
14.6
3.7
4.9
2018F
135,161
60,101
(7.0)
19,199
194
(13.3)
21.1
17.8
3.6
4.2
2019F
144,124
62,239
3.6
18,812
190
(2.0)
30.1
18.2
3.4
4.1
2020F
157,198
67,103
7.8
19,713
199
4.8
36.7
17.3
3.2
4.3
8.3
8.8
8.5
7.9
Share Price Closing as of : 14-September-2018
PremierInsight
PT Waskita Beton (WSBP IJ; Buy)
Lower order book due to project delays
Increased production capacity by 15% by the end of 2018.
We lower our earnings forecast by 10/14% in FY18F/19F.
Improved cash flow from several project payment of Rp6.5tn.
Maintain Buy with lower TP of Rp440 (target P/E of 9.8x).
Production capacity hike to 3.75tn ton (+15% yoy) by end 2018. As of 8M18, WSBP has
production capacity at 3.5mn ton/year (+7.7% yoy) from the expansion at its existing plants in
Gasing and Bojonegoro of 100k and 150k ton, respectively. WSBP targets to increase
production capacity to 3.75mn ton/year by the end of 2018. The additional capacity might
come from either existing plant or a new plant, based on project needs and locations.
Revised down our earnings forecast due to guidance downward revision. Due to
several project tender delay and WSKT’s decision to postponed the attainment of several toll
road project, WSBP decided to reduce its FY18F new contract guidance to Rp8.3tn (from
Rp11.5tn). As of 8M18, WSBP has achieved new contract of Rp4tn, forming 49% of company’s
FY18F new guidance of Rp8.3tn. WSBP’s low new contract achievement was resulted from
several toll road project delays such as Krian-Legundi-Bunder-Manyar, Cibitung-Cillincing,
Pasuruan-Probolinggo and Cimanggis-Cibitung part 2. Given lower FY18F new contract
guidance, we reduce our earnings forecast for FY18F/19F by 10/15% as we implement lower
new contract assumption to Rp8tn and Rp8.5tn for FY18F and FY19F (from Rp11tn and
Rp11.5tn)..
Received payment of Rp6.5tn for major turnkey projects. As of 8M18, WSBP has
received terminal payment of Rp6.5tn from several major project such as Becakayu, PemalangBatang, Batang Semarang toll roads. In the remaining 2H18, WSBP is scheduled to receive
another payment of Rp1tn from Becakayu section 1A. In addition, company also expecting
additional payment of ±Rp3tn from two projects, namely, Legundi-Bunder, and CimanggisCibitung Toll Ways (CCTW) I & II. WSBP is currently negotiating the payment term for those
projects in order to change it to working progress payment instead of the initial agreement of
turnkey payment. Note: WSBP has previously succeeded to change the payment term for
Becakayu project section 1B and C in 1H18 worth Rp1.8tn from turnkey to working progress.
Maintain Buy with lower TP of Rp440 (from 620). Despite slower than expected new
contract attainment in 8M18, we continue to like WSBP given its robust production capacity
growth and its low DER at 0.78x. However, downward revision on our FY18F/19F earnings
forecast have led our DCF-based TP to decrease to Rp440 (from Rp620), representing target
FY18F PE of 9.8x. Key risk to our call might come from further projects tender delay from
governments.
.
Year To 31 Dec
Revenue (RpBn)
EBITDA (RpBn)
EBITDA Growth (%)
Net Profit (RpBn)
EPS (Rp)
EPS Growth (%)
Net Gearing (%)
PER (x)
PBV (x)
Dividend Yield (%)
EV/EBITDA (x)
Source: WSBP, IndoPremier
Refer to Important disclosures in the last page of this report
2016A
4,717
1,230
172.9
635
24
89.9
(11.5)
14.9
1.3
4.0
7.0
2017A
7,104
1,909
55.2
1,000
38
57.6
54.1
9.4
1.3
3.4
7.0
2018F
8,451
2,160
13.2
1,189
45
18.8
35.1
7.9
1.1
3.2
5.8
2019F
9,684
2,404
11.3
1,312
50
10.4
45.0
7.2
0.9
3.8
5.8
2020F
9,563
2,245
(6.6)
1,095
42
(16.5)
27.8
8.6
0.9
4.2
5.5
Share Price Closing as of : 14-September-2018
2
PremierInsight
News & Analysis
Corporates
INTP: Indocement Tunggal Prakarsa (INTP IJ;Rpxxxx; Sell) sales volume grew by
a mere 1% yoy in August 2018 to 1.6mn ton while the company’s total sales
volume since January-August 2018 grew 7% yoy to 11.5mn ton. The management
mention the poor performance in August 2018 was caused by holidays and Asian
games opening ceremony which lead to cement delivery disruptions. Nevertheless,
the company already increased their ASP in the beginning of 2H18 to counter the
increment cost from higher coal price and to improve their profitability.
Comment: With the increase of ASP in 2H18, we suspect that we will see
profitability improvement in 3Q18 compared to 2Q18. Currently INTP trades at PE
2018 88.7x.
SMGR: Semen Indonesia (SMGR IJ; Rpxxx; Hold) during January-August 2018
booked sales volume of some 20.6mn ton, up 4% yoy compared to last year figure
of 19.8mn ton. Interestingly, the company’s export sales volume exclude Thang
Long Cement Company Vietnam (TLCC) was up 42.7% yoy while export sales
volume of TLCC jumped significantly by 95.4% yoy. The company stated that with
pushing further the export marketing effort, they could maintain their utilization
rate remain high. Currently their utilization rate already reach 85% and they
targets it will reach 90% in FY18.
Comment: With the help of export sales that significantly higher compared to last
year, we expect SMGR could meet their sales volume target of some 5%-6% in
FY18.
TBIG: Tower Bersama (TBIG IJ; Rp xxx) stil maintain targets of 1K towers and
2.5K new tenants. The 2018F targeted new tenants will be achieve with organic
growth (gross add), said by company previously. TBIG already allocated capex of
Rp2tn. (Kontan).
WSKT: Waskita Karya (WSKT IJ; Rp; Buy) reported new contract of Rp9.2tn in
8M18 (-79% yoy), forming only 16.7% of company’s new FY18F guidance of
Rp55tn (from Rp70tn). In other news, WSKT will issue continuous bonds III stage
III worth Rp2tn. (Bisnis, Investor)
Comment: The low new contract achievement as of 8M18 and issuance of new
debt will negatively impact WSKT’s earnings, mostly in FY20F and FY21F. We will
review our forecast on WSKT based on further development.
Markets & Sector
Plantation sector: Government of Indonesia’s B-20 program is expected to reach
100% by end of September 2018. According to Director General of Oil and Natural
Gas of Ministry of Energy and Mineral Resources (ESDM) Djoko Siswanto currently
bio-diesel blending has reached 80% of the B-20 target. Djoko added that by end
of month all of Pertamina’s fuel terminals will obtain FAME (free acid methyl ether)
supply from bio-diesel producers. (Investor Daily)
Comment: This is positive for palm oil producers, thus, we maintain our positive
view on the sector and reiterate our Buy ratings for AALI and LSIP.
Refer to Important disclosures in the last page of this report
3
PremierInsight
Refer to Important disclosures in the last page of this report
4
Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167
INVESTMENT RATINGS
BUY
: Expected total return of 10% or more within a 12-month period
HOLD
: Expected total return between -10% and 10% within a 12-month period
SELL
: Expected total return of -10% or worse within a 12-month period
ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
PT Telkom Indonesia (TLKM IJ; Hold)
Navigating transition and recovery
6,100
Less disruption to data pricing improvement.
8,000
7,000
6,000
Employees’ retirement may ease margin decline.
6,000
5,900
Only minor impact from Rupiah weakness in short term.
5,800
4,000
Rp bn
JCI Index
5,000
5,700
3,000
5,600
2,000
5,500
1,000
5,400
14-Sep
13-Sep
7-Sep
12-Sep
6-Sep
10-Sep
5-Sep
4-Sep
3-Sep
31-Aug
30-Aug
29-Aug
28-Aug
27-Aug
24-Aug
23-Aug
21-Aug
20-Aug
16-Aug
15-Aug
14-Aug
13-Aug
-
Foreign net buy (sell)
1,000
20%
800
15%
10%
400
5%
200
0%
14-Sep
13-Sep
12-Sep
10-Sep
7-Sep
6-Sep
5-Sep
4-Sep
3-Sep
31-Aug
(400)
30-Aug
(200)
29-Aug
-
-5%
-10%
(600)
-15%
% net buy/market turnover
600
Net buy (sell) in Rp bn
Equity | Indonesia | Research Daily
JCI Index
(800)
-20%
(1,000)
(1,200)
-25%
Key Indexes
Index
JCI
Closing
1 day
1 year
1.2%
1.0%
-6.7%
937
1.6%
-4.1%
-13.2%
26,155
0.0%
17.5%
5.8%
1,722
0.2%
3.7%
-1.8%
HSI
27,286
1.0%
-1.9%
-8.8%
NKY
22,821
1.0%
14.6%
1.4%
FTSE
7,304
0.3%
1.2%
-5.0%
FSSTI
3,161
0.9%
-1.5%
-7.1%
23
0.1%
-15.5%
-19.8%
DJI
SET
EIDO
Commodity price
Commodities
Last price
Ret 1 day Ret 1 year
(in USD)
Oil/barrel (WTI)
69.0
0.6%
38.3%
542.9
-0.9%
-21.6%
Soy/bushel
7.9
-0.3%
-17.5%
Rubber/kg
1.5
-1.1%
-22.2%
Nic kel/tonne
12,574
0.4%
13.0%
Tins/tonne
19,046
0.0%
-7.7%
Copper/tonne
5,951
-1.0%
-7.8%
Gold/try.oz (Spot)
1,194
-0.7%
-9.6%
Coal/tonne
115.4
0.1%
15.4%
2.9
-1.7%
-8.7%
516.3
0.9%
15.0%
CPO/tonne
Corn/bushel
Wheat/bushel (USd)
Source : Bloomberg
Less pricing disruption. Telkomsel (Tsel) indicated it recently experienced
healthier competition vs. 1H18, thanks to less pricing disruption from observed
starter pack market so far. Although certain area might be more competitive
than average, Tsel plans to keep premium (20-30%; sometimes max. 40% in
competitive areas) vs. competitors. Tsel may increase data pricing again
between Oct-Nov (depend on competition, incl. small players). We expect
TLKM’s 2H18 revenue to grow +9%YoY, as non-Telkomsel continue its strong
revenue growth (implying 2H18F +26%YoY), while Tsel’s revenue slightly
recover to +4%YoY in 2H18F.
Employees’ retirement may ease margin decline. Company said c.7K
personnel (mostly non-Tsel; c.2K personnel/year in 2018F-20F), accounted c.
30% of FY17 TLKM’s total personnel, will enter normal retirement during 2018F25F. We expect personnel expense to revenue ratio to gradually decline to 9% in
2023F from 11% in 2018F. We still estimate TLKM’s EBITDA margin to decline to
43% in 2020 from 45% in 2018, but stabilize temporarily during 2021F-23F.
YTD
5,931
LQ45
Maintain HOLD TP Rp3,700, at +1STD 7-yr mean.
Manageable forex risk in short term. We estimate 2018F/19F capex paid
(settled) in USD portion of total capex at 17% for TLKM’s group and 10% for
Tsel, based on discussion with company. Tsel might also be able to negotiate
Rupiah weakness impact to its USD-paid capex if forex rate reached certain
threshold, according to company. In terms of debt, TLKM’s USD exposure is
relatively small at c.3%, similar to ISAT (c. 2%), but below EXCL (c.31%) as of
2Q18.
Reduce TP by 5% to Rp3,700 – Maintain HOLD. We use DCF to arrive to our
TP with 10% WACC. We decreased TP by 5% mainly because we cut 18F/19F
EBITDA by 4/7% (slower margin recovery). TLKM trades at 8.5x 19F EV/EBITDA
(adj. with ownership in Tsel). Current 19F EV/EBITDA is at 7% premium to avg.
regional excl. Indonesia, but 19F P/E is similar (Figure 10). Our TP translates to
8.9x 19F EV/EBITDA, at +1STD of 7-yr mean. We put a Hold to TLKM as we
view: 1) Although competition is healthier vs. 1H18, 2018F-19F data pricing
might yet enough to expand blended EBITDA margin in 2019F; 2) Magnitude of
data pricing increase in outer Java might be limited for now as est. smartphone
penetration there is still at c.50%. Upside risk: Data pricing, cost saving effort,
Indihome.
Year To 31 Dec
Revenue (RpBn)
EBITDA (RpBn)
EBITDA Growth (%)
Net Profit (RpBn)
EPS (Rp)
EPS Growth (%)
Net Gearing (%)
PER (x)
PBV (x)
Dividend Yield (%)
EV/EBITDA (x)
Source: TLKM, IndoPremier
Refer to Important disclosures in the last page of this report
2016A
116,333
59,498
15.7
19,352
195
24.9
1.9
17.7
4.1
4.0
9.0
2017A
128,256
64,609
8.6
22,145
224
14.4
9.2
14.6
3.7
4.9
2018F
135,161
60,101
(7.0)
19,199
194
(13.3)
21.1
17.8
3.6
4.2
2019F
144,124
62,239
3.6
18,812
190
(2.0)
30.1
18.2
3.4
4.1
2020F
157,198
67,103
7.8
19,713
199
4.8
36.7
17.3
3.2
4.3
8.3
8.8
8.5
7.9
Share Price Closing as of : 14-September-2018
PremierInsight
PT Waskita Beton (WSBP IJ; Buy)
Lower order book due to project delays
Increased production capacity by 15% by the end of 2018.
We lower our earnings forecast by 10/14% in FY18F/19F.
Improved cash flow from several project payment of Rp6.5tn.
Maintain Buy with lower TP of Rp440 (target P/E of 9.8x).
Production capacity hike to 3.75tn ton (+15% yoy) by end 2018. As of 8M18, WSBP has
production capacity at 3.5mn ton/year (+7.7% yoy) from the expansion at its existing plants in
Gasing and Bojonegoro of 100k and 150k ton, respectively. WSBP targets to increase
production capacity to 3.75mn ton/year by the end of 2018. The additional capacity might
come from either existing plant or a new plant, based on project needs and locations.
Revised down our earnings forecast due to guidance downward revision. Due to
several project tender delay and WSKT’s decision to postponed the attainment of several toll
road project, WSBP decided to reduce its FY18F new contract guidance to Rp8.3tn (from
Rp11.5tn). As of 8M18, WSBP has achieved new contract of Rp4tn, forming 49% of company’s
FY18F new guidance of Rp8.3tn. WSBP’s low new contract achievement was resulted from
several toll road project delays such as Krian-Legundi-Bunder-Manyar, Cibitung-Cillincing,
Pasuruan-Probolinggo and Cimanggis-Cibitung part 2. Given lower FY18F new contract
guidance, we reduce our earnings forecast for FY18F/19F by 10/15% as we implement lower
new contract assumption to Rp8tn and Rp8.5tn for FY18F and FY19F (from Rp11tn and
Rp11.5tn)..
Received payment of Rp6.5tn for major turnkey projects. As of 8M18, WSBP has
received terminal payment of Rp6.5tn from several major project such as Becakayu, PemalangBatang, Batang Semarang toll roads. In the remaining 2H18, WSBP is scheduled to receive
another payment of Rp1tn from Becakayu section 1A. In addition, company also expecting
additional payment of ±Rp3tn from two projects, namely, Legundi-Bunder, and CimanggisCibitung Toll Ways (CCTW) I & II. WSBP is currently negotiating the payment term for those
projects in order to change it to working progress payment instead of the initial agreement of
turnkey payment. Note: WSBP has previously succeeded to change the payment term for
Becakayu project section 1B and C in 1H18 worth Rp1.8tn from turnkey to working progress.
Maintain Buy with lower TP of Rp440 (from 620). Despite slower than expected new
contract attainment in 8M18, we continue to like WSBP given its robust production capacity
growth and its low DER at 0.78x. However, downward revision on our FY18F/19F earnings
forecast have led our DCF-based TP to decrease to Rp440 (from Rp620), representing target
FY18F PE of 9.8x. Key risk to our call might come from further projects tender delay from
governments.
.
Year To 31 Dec
Revenue (RpBn)
EBITDA (RpBn)
EBITDA Growth (%)
Net Profit (RpBn)
EPS (Rp)
EPS Growth (%)
Net Gearing (%)
PER (x)
PBV (x)
Dividend Yield (%)
EV/EBITDA (x)
Source: WSBP, IndoPremier
Refer to Important disclosures in the last page of this report
2016A
4,717
1,230
172.9
635
24
89.9
(11.5)
14.9
1.3
4.0
7.0
2017A
7,104
1,909
55.2
1,000
38
57.6
54.1
9.4
1.3
3.4
7.0
2018F
8,451
2,160
13.2
1,189
45
18.8
35.1
7.9
1.1
3.2
5.8
2019F
9,684
2,404
11.3
1,312
50
10.4
45.0
7.2
0.9
3.8
5.8
2020F
9,563
2,245
(6.6)
1,095
42
(16.5)
27.8
8.6
0.9
4.2
5.5
Share Price Closing as of : 14-September-2018
2
PremierInsight
News & Analysis
Corporates
INTP: Indocement Tunggal Prakarsa (INTP IJ;Rpxxxx; Sell) sales volume grew by
a mere 1% yoy in August 2018 to 1.6mn ton while the company’s total sales
volume since January-August 2018 grew 7% yoy to 11.5mn ton. The management
mention the poor performance in August 2018 was caused by holidays and Asian
games opening ceremony which lead to cement delivery disruptions. Nevertheless,
the company already increased their ASP in the beginning of 2H18 to counter the
increment cost from higher coal price and to improve their profitability.
Comment: With the increase of ASP in 2H18, we suspect that we will see
profitability improvement in 3Q18 compared to 2Q18. Currently INTP trades at PE
2018 88.7x.
SMGR: Semen Indonesia (SMGR IJ; Rpxxx; Hold) during January-August 2018
booked sales volume of some 20.6mn ton, up 4% yoy compared to last year figure
of 19.8mn ton. Interestingly, the company’s export sales volume exclude Thang
Long Cement Company Vietnam (TLCC) was up 42.7% yoy while export sales
volume of TLCC jumped significantly by 95.4% yoy. The company stated that with
pushing further the export marketing effort, they could maintain their utilization
rate remain high. Currently their utilization rate already reach 85% and they
targets it will reach 90% in FY18.
Comment: With the help of export sales that significantly higher compared to last
year, we expect SMGR could meet their sales volume target of some 5%-6% in
FY18.
TBIG: Tower Bersama (TBIG IJ; Rp xxx) stil maintain targets of 1K towers and
2.5K new tenants. The 2018F targeted new tenants will be achieve with organic
growth (gross add), said by company previously. TBIG already allocated capex of
Rp2tn. (Kontan).
WSKT: Waskita Karya (WSKT IJ; Rp; Buy) reported new contract of Rp9.2tn in
8M18 (-79% yoy), forming only 16.7% of company’s new FY18F guidance of
Rp55tn (from Rp70tn). In other news, WSKT will issue continuous bonds III stage
III worth Rp2tn. (Bisnis, Investor)
Comment: The low new contract achievement as of 8M18 and issuance of new
debt will negatively impact WSKT’s earnings, mostly in FY20F and FY21F. We will
review our forecast on WSKT based on further development.
Markets & Sector
Plantation sector: Government of Indonesia’s B-20 program is expected to reach
100% by end of September 2018. According to Director General of Oil and Natural
Gas of Ministry of Energy and Mineral Resources (ESDM) Djoko Siswanto currently
bio-diesel blending has reached 80% of the B-20 target. Djoko added that by end
of month all of Pertamina’s fuel terminals will obtain FAME (free acid methyl ether)
supply from bio-diesel producers. (Investor Daily)
Comment: This is positive for palm oil producers, thus, we maintain our positive
view on the sector and reiterate our Buy ratings for AALI and LSIP.
Refer to Important disclosures in the last page of this report
3
PremierInsight
Refer to Important disclosures in the last page of this report
4
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INVESTMENT RATINGS
BUY
: Expected total return of 10% or more within a 12-month period
HOLD
: Expected total return between -10% and 10% within a 12-month period
SELL
: Expected total return of -10% or worse within a 12-month period
ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
DISCLAIMERS
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or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
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