Kepemilikan Kartu Kredit Bakal Dibatasi Tahun Depan, Setuju atau Tidak?

Bank Indonesia (BI) akan menerapkan kebijakan pembatasan kepemilikan kartu kredit mulai tahun depan. Jadi, tidak boleh lagi punya kartu kredit banyak-banyak.

Pembatasan akan dilakukan berdasarkan usia dan pendapatan. Bank sentral berasalan hal ini dilakukan sebagai salah satu bentuk perlindungan konsumen dan manajemen risiko.

Dari sisi usia, pemegang kartu kredit utama harus berusia minimal 21 tahun atau sudah menikah, sementara pemegang kartu tambahan berusia minimal 17 tahun atau sudah menikah.

Bila gaji bulanan Anda sebesar Rp 3 juta ke atas dan umur Anda di bawah 21 tahun, maka Anda tidak bisa punya kartu kredit.

Bila umur Anda 21 tahun ke atas dan gaji anda kurang dari Rp 3 juta, maka Anda juga tak bisa memiliki kartu kredit.

Sedangkan dari sisi pendapatan, jika Anda punya gaji antara Rp 3-10 juta boleh punya kartu kredit dari maksimal 2 penerbit, dengan pembatasan total plafon kredit dari seluruh kartu kredit yang dimilikinya, yaitu maksimal 3 kali pendapatan tiap bulan.

Sementara jika Anda punya gaji lebih dari Rp 10 juta, tidak dibatasi kepemilikan kartu kreditnya, namun mempertimbangkan analisis risiko masing-masing penerbit kartu.

Pendapatan tiap bulan yang dapat dijadikan pertimbangan penerbit kartu kredit adalah pendapatan setelah dikurangi kewajiban, antara lain pajak dan pembayaran utang kepada pemberi pekerjaan atau take home pay.

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October 2, 2014

Aksi Jual Asing Berlanjut

Bursa regional pagi ini diperdagangkan negatif mengikuti pergerakan Dow Jones seiring minimnya sentiment positif. IHSG masih diliputi sentimen negatif seiring masih berlanjutnya aksi jual asing karena faktor politik yang tidak kondusif. Kami memperkirakan IHSG akan bergerak cenderung melemah hari ini.

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October 2, 2014

Nam Cheong acquires 30% stake in Pelayaran Bina Buana Raya

Nam Cheong has entered into a binding Heads Of Agreement (the HOA) with Marco Polo Marine Limited (MPML) in relation to a proposed investment in MPML’s indirect subsidiary, Pelayaran Nasional Bina Buana Raya (BBRM) worth USD30.7m. BBRM will use the proceeds to purchase five OSVs from Nam Cheong and three from MPM worth USD170m in total. Nam Cheong has agreed to subscribe up to 1.6bn new shares in BBRM’s rights issue, at an issue price of IDR230 per share (USD1 = IDR12,000). The deal is priced at book value.

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October 2, 2014

Panin Sekuritas Research 2 Oktober 2014

Bursa Amerika Serikat kemarin terkoreksi cukup besar ditengah ketidakpastian global. Ketidakpastian tersebut didorong oleh beberapa konflik geopolitik yang berjalan, pelemahan perekonomian Eropa,  dan mixed nya data makroekonomi AS. PMI Mfg AS Sept 56,6; construction spending Agt -0,8%; private employers Sept bertambah 213 ribu. Dow -1,40%; S&P -1,32%; Nasdaq -1,59%. Sedangkan bursa regional rata-rata terkoreksi mengikuti sentimen bursa global dan demo protes di Hong Kong.

Ketua DPR telah ditentukan oleh rapat paripurna dimana memenangkan Setia Novanto dari Golkar. Wakil ketua DPR Fadli Zon-Gerindra, Fahri Hamzah-PKS, Agus Hermanto-Demokrat, dan Taufik Kurniawan-PAN. Hasil ini diekspektasikan akan direspon negatif oleh pasar. Sedangkan data inflasi Sept terkendali +0.27% mom atau +4.53% yoy atau +3,71% ytd. Dengan defisit neraca dagang -USD318 juta akibat kenaikan bulanan impor yang lebih tinggi dari ekspor. IHSG diperkirakan akan terkoreksi mengikuti sentimen Bursa global dan regional.Rupiah pagi ini Rp12.130.

Trading BOW: BMRI, LPKR, BDMN, ASRI, CTRA, MLPL, EXCL, BBNI.

Panin Sekuritas

October 2, 2014

TELE: King of prepaid voucher

Sekitar satu dekade yang lalu, rata-rata orang Indonesia hanya mempunyai satu gadget (HP). Dan mereka akan memilih HP yang kecil sehingga mudah dimasukan ke saku. Namun kini telah menjadi umum bila seseorang mempunyai lebih dari satu gadget, sebagian memiliki gadget berukuran besar dikarenakan tidak dapat dimasukan ke saku mereka akan memegangnya atau menaruh di tas khusus gadget. Hal ini sajalan dengan data Gfk Asia, pada kuartal pertama di tahun 2014 ini telah terjual 7,3 juta unit smarphone di Indonesia, angka ini meningkat 68% yoy. Perusahaan yang diuntungkan dengan trend ini adalah Tiphone Mobile Indonesia (TELE IJ), sebagian besar pendapatan TELE pada semester pertama 2014 ini berasal dari Voucher pulsa dan kartu perdana (61,6%) dan penjualan telepon selular (38,4%).Penjualan perseroan dari voucher pulsa selama tiga tahun terakhir bertumbuh secara majemuk 16% sementara penjualan telepon selular meningkat 54% sehingga kontribusi voucher pulsa terhadap total penjualan menurun dari 87% pada akhir tahun 2011 menjadi 79% pada 2013. Perseroan merupakan distributor kartu perdana dan voucher pulsa dari Telkom group (telkomsel dan Telkom flexi) dan XL axiata. Perseroan merupakan distributor sejumlah ponsel ternama yakni Samsung, LG, HTC serta apple.Perseroan melalui anak usahanya Telesindo memiliki outlet yang menjual telepon selular dan voucher pulsa langung ke konsumen. Telesindo telah mempunyai 200 outlet pada akhir tahun 2013, pada tahun ini perseroan menargetkan 1000 outlet. Untuk memperkuat posisi perseroan sebagai distributor kartu perdana dan voucher pulsa Telkom group, pada bulan September, perseroan mengeluarkan saham baru dan menjualnya kepada PT. Pins Indonesia (Telkom group), sehingga PINS akan memiliki total 25% saham perseroan.Kami melihat kekuatan perseroan adalah bisnis voucher pulsa, dan bisnis ini relative stabil. Pada saat ini perseroan diperdagangkan pada forward P/E 13,3x dan trailing P/B 3,3x dengan forward ROE 23%.

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October 2, 2014

INCO: Key Takeaways From The Company Discussion

We met the INCO‘s operational and finance team to discuss everything about this company. Below are the takeaways:

✅ Production Ramping Up, Production Capacity Is Almost Fully Utilized. INCO set the production target 2014 in 79,7k tons with 98% utilization rate. With current production level, INCO claims that the it is still on track.

✅ Stronger Cost Efficiency On 2H14. With coal conversion, INCO believe that the HSFO usage on their rotary dryers and rotary kiln will be eventually reduced almost a half. Overall, it will reduce the cash cost almost 15%.

✅ Furnace Overhauling May Be Delayed. Our discussion with INCO’s operational and finance team indicates that INCO will delay the furnace overhauling to 4Q15-1Q16 from previous plan 1H15. This initiative aims to rise the operational efficiency and upgrade the production capacity to 90ktpa from current capacity 80ktpa. If this initiative is committed, INCO’s annual production will decrease around 7000 ton since the overhauled furnace will be shut down.

✅ Maintain BUY On TP Rp 4600/share. We see a brighter future on INCO, supported by higher nickel price in the future and stronger profit margin because of the cost efficiency. We maintain our target price on Rp4600/share, implied to PE-15 20.3x and PBV-15 2,1x. We use WACC assumption on 10,5% and Terminal Growth 4%.

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October 2, 2014

AALI: Saham kebun sawit dengan fundamental dan integritas manajemen yang cukup baik

AALI 23.100, saham kebun sawit dengan fundamental dan integritas manajemen yang ckp baik, saham ini dalam seminggu terakhir tertinggal dibanding saham LSIP. Saran saham pemenang : akumulasi bertahap saat koreksi saham AALI, resiko sudah mulai terbatas dengan dibentengi support kuat 23.000 dan  support ekstrem 22.000. Note : cum deviden rp. 244 tgl 9 Oktober 2014

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October 2, 2014

EXCL: Taking Benefits from Tower Sale

EXCL telah menandatangani Perjanjian Jual/Beli Aset dengan PT Solusi Tunas Pratama TEXCL) untuk penjualan 3500 menara dengan total transaksi Rp5,6 triliun. Dana akan digunakan untuk melunasi utang, sehingga EXCL dapat memperbaiki struktur permodalan dengan berkurangnya leverage dari 3,2x (net debt/EBITDA) menjadi sekitar 2,5x, yang tentunya dapat mengurangi resiko keuangan. Oleh karena itu, kami menaikkan target harga dari Rp6000 menjadi Rp7000, merekomendasikan BELI, dengan target EV/EBITDA 2015 6,0x. ©Panin Sekuritas

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October 2, 2014

Manufacturing Data Dragging Stocks Lower

The U.S. equity markets are moving solidly lower in late-morning action, with some disappointing eurozone manufacturing reports being followed by softer-than-expected domestic reads on the sector. Meanwhile, geopolitical concerns continue to fester as Hong Kong protests grow and monetary policy uncertainty remains ahead of tomorrow’s decision by the European Central Bank (ECB). Treasuries are trading higher on the data and uneasy global sentiment, while separate U.S. reports showed ADP’s private sector job growth topped forecasts, construction spending unexpectedly fell and mortgage applications dipped. In equity news, Walgreen and Express Scripts announced a Medicare prescription drug plan collaboration and General Mills reported that it plans to reduce its U.S. workforce, while Chrysler and General Motors bested analysts’ September auto sales forecasts. Elsewhere, gold, the U.S. dollar and crude oil prices are all trading higher. In overseas trading, Asian stocks finished mostly lower despite an upbeat Japanese manufacturing sentiment report, while markets in Hong Kong and mainland China were closed for a holiday. Finally, European stocks are broadly lower on the disappointing global manufacturing data and caution ahead of the ECB’s decision.

October 1, 2014

2015 budget enough for Jokowi’s basic government operations

2015 budget enough for Jokowi’s basic government operations – Indonesia’s House of Representatives is set to vote on the 2015 budget on Monday with the deficit at 2.21% of GDP, lower than the initial proposal at 2.32%, and also below this year’s 2.4%.The 2015 budget will only fund Jokowi’s basic government operation, said Finance Minister Chatib Basri. State revenue was earmarked at Rp1,793.6tr ($149.22bn) and expenditure at Rp2,039.5tr. To fund the Rp245.89tr gap, the budget body has authorized the debt management office to issue bonds worth Rp277tr. Jokowi’s team can proposed a revised budget post the inauguration to review assumptions used.

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October 1, 2014

Inflation Sep 4.53% yoy; 0,27% mom, core 4,04% yoy

Inflation Sep 4.53% yoy; 0,27% mom, core 4,04% yoy ( vs cons 4,57% yoy, 0,33% mom; core 4,33% yoy). Trade balance -USD318mn, export +10,63% yoy, import +13,69% yoy (cons +$130mn, export +8,65% yoy, import +9,40% yoy).

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October 1, 2014

NEWS 1 October 2014

·         RIGS Akan Ekspansi ke Thailand dan Malaysia

·         PGAS Bangun SPBG di Jawa Timur

·         TBLA Siapkan Pembayaran Bunga Obligasi Rp26,25 Miliar

·         HEXA Siapkan Capex USD16 Juta

·         UNTR Proyeksikan Capex 2015 Sebesar USD300 Juta

·         PTPP Lunasi MTN Total Senilai Rp530 Miliar

·         Dividen INKP Rp25/saham dan TKIM Rp10/saham, cum 17 Oktober 2014

·         SIAP tunda akuisisi perusahaan distributor BBM

·         PGLI batalkan rights issue

·         PTPP dan WSKT akan kembangkan Pelabuhan Kuala Tanjung di Medan dengan nilai proyek Rp700 miliar

·         OJK batasi suku bunga simpanan maksimal 225 basis poin dari BI Rate

  (disclaimer on – RL)

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October 1, 2014

Panin Sekuritas Research – 1 Oktober 2014

Bursa Amerika jumat kemarin ditutup terkoreksi dikarenakan penurunan beberapa data makroekonomi. Kepercayaan konsumen AS September ke level 86 (vs cons 92.5 dan Agustus 93.4); indeks harga propery S&P/Case-Shiller Agustus naik 6,7% mom (dibawah ekspektasi); data Chicago PMI Sept 60,5 (vs cons 61,9). Dow -0,17%, S&P 500 -0,28%, Nasdaq -0,28%. Sedangkan bursa regional menurun dengan fokus dari konflik politik di Hong Kong dan data makro China. China PMI Sept 51,1 (vs cons 51.0, tidak berubah dari Agustus). Bank Sentral China melonggarkan setoran uang muka dan bunga KPR untuk mendorong pertumbuhan pasar properti.

OJK membatasi suku bunga deposito untuk Bank BUKU 4 (modal lebih dari Rp30bn, atau bank besar) menjadi 200bps diatas BI rate. Hal ini positif, dapat menurunkan cost of fund bank. BKPM menargetkan investasi 2015 sebesar Rp520triliun, naik 15% yoy. IHSG hari ini diperkirakan naik tipis. Rupiah menguat 0,43% ke Rp12.183. 
Trading BOW: BBRI, TLKM, CPIN, DILD, CTRA, SMRA, SMGR, PTPP, WSKT.

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October 1, 2014

BRAU agrees deal with govt, mining area reduced

Berau Coal (BRAU) agrees deal with govt, mining area reduced – BRAU has signed an MOU with the government regarding detailed talks on the company’s coal-mining contract of work (CCoW). Under the MoU, Berau Coal has agreed on principal to adjustments to a number of aspects of its CCoW, including the size of its mining area and a royalty payment to the government of 13.5%. Besides the royalty issue, Berau Coal has also in principal agreed to reduce its mining area by 10,391 hectares.

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October 1, 2014

BBNI to see changes in the management in 2015

Bank Negara Indonesia (BBNI) will face changes in the management next year as each of its ten directors’
tenures ended whereby only four directors can be reappointed for a second term. The four directors are;
1. consumer and retail banking director Darmadi Sutanto,
2. risk director Sutanto,
3. operations and information technology director Honggo Widjojo Kangmasto, and
4. channel and services director Adi Setianto.
The remaining six directors who cannot be reelected are president director Gatot Suwondo, vice president director Felia
Salim, finance director Yap Tjay Soen, business banking director Krishna R. Suparto, legal and compliance director Ahdi
Jumhari Luddin, and treasury and financial institution director Suwoko Singoastro

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September 30, 2014

Next threat: Scrapping direct presidential polls

Next threat: Scrapping direct presidential polls – After snatching the people’s right to elect their local leaders through a controversial Regional Elections Law passed on Friday, Prabowo’s Red-White coalition is suspected of planning an even more sinister plot. Prabowo’s coalition plans to transfer power to elect president to People’s Consultative Assembly (MPR). If this happens, it would be a return to the New Order era. The plan to strengthen the MPR as well as to amend the Constitutional was officially announced during a house plenary meeting last week.

September 30, 2014

MEDC menemukan cadangan migas di Sumatera dan Libya, Afrika Utara sebanyak 250 juta barel

PT Medco Energi Internasional (MEDC) menemukan cadangan migas di Sumatera dan Libya, Afrika Utara sebanyak 250 juta barel. Perseroan menemukan cadangan pada Sumur Hijau-2, Blok South Sumatera, Indonesia dan Sumur O2 Area 47 di Libya. Dari hasil pengujian Sumur Hijau 2 menghasilkan gas 5,05 mmscfd dan Sumur O2 yang mulai dibor sejak 23 Mei 2014 terdapat migas sebanyak 3.300 bph dan 140.000 mscfd.

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September 30, 2014

SUPR menandatangani amandemen perjanjian pinjaman pada 25 September 2014, dengan anak perusahaan perseroan yaitu PT BIT Teknologi Nusantara

PT Solusi Tunas Pratama (SUPR) menandatangani amandemen perjanjian pinjaman pada 25 September 2014, dengan anak perusahaan perseroan yaitu PT BIT Teknologi Nusantara. Perubahan itu plafon dari Rp500M menjadi Rp1,5T. BIT adalah perusahaan yang bergerak di bidang penyediaan, pengelolaan dan penyewaan infrastruktur telekomunikasi serat optik.

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September 30, 2014

After Public Shaming, SBY’s Redemption Not Out of Reach

After Public Shaming, SBY’s Redemption Not Out of Reach- After vowing in Washington to refrain from signing off on the controversial regional elections bill that was passed into law last week by Indonesia’s divided House of Representatives and promising to fight with the people to abort it, President SBY must prove his seriousness by clearing the mist surrounding his Democratic Party’s strange behavior that has triggered suspicion in public. Over the past few days, the #ShameOnYouSBY hashtag on Twitter has been the top trending topic in the world. The president said very convincingly in the US capital that denying people the right to direct elections was a “serious setback to democracy” that disappointed him gravely — the reason he will not sign the law.

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September 30, 2014

Panin Sekuritas Research – 30 September 2014

Bursa Amerika jumat kemarin ditutup terkoreksi dengan fokus pada demo protes di Hongkong walaupun beberapa data makroekonomi AS menunjukkan perbaikan. Pending home sales Agustus turun 1% dan personal income Agustus naik 0.3%. Dow -0,25%; S&P -0.25%; Nasdaq -0.14%. Bursa regional juga ditutup menurun ditengah kekhawatiran protes di Hongkong dan fokus data China dan Jepang. Data Jepang Agustus household spending dan indusrial output lebih rendah dari konsensus. Sedangkan pagi ini China akan mengeluarkan data final aktivitas pabrik bulan September.

Pemerintah dan DPR sepakat dalam rapat paripurna DPR untuk APBN 2015 akan asumsi makroekonomi pertumbuhan ekonomi 5.8%, inflasi 4.4%, rupiah Rp11.900, lifting minyak 900k bph, lifting gas 1,25 juta bph, harga ICP USD105/barrel. IHSG hari ini diperkirakan terkoreksi mengikuti sentimen bursa global dan regional. Rupiah melemah ke Rp12.215. 
Trading BOW: BMRI, AKRA, CPIN, MAIN, JPFA, MAPI, LPPF, MLPL.

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September 30, 2014

The Shame of you @ SBY twitter account has been a trending topic in Indo and even in the world over past 3 days

The Shame of you @ SBY twitter account has been a trending topic in Indo and even in the world over past 3 days for a strong criticism, protests, disappointments to SBY and his political party by allowing majority parliament to cease a democratic direct elections by walking out in voting giving up its 26% votes and automatically allowing opposition coalition lead by Prabowo party to win majority votes to change the direct election by people to non-direct election (election by parliament) for regional head including governor, major. This development is unfavorable for the market as this shows that with opposition having a majority vote in parliament has and will make things difficult for the new government to carry strong reforms. I would expect political environments will be unfavorable for market for now given the trend of opposition coalition gaining momentum to change laws at parliament level to increase parliament power away from the new government. With market is trading at above 14x PER, not cheap and provide lots of excuse to take profits on the recent political developments.

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September 30, 2014

Sept14 inflation and Aug14 trade previews

The Statistics Indonesia will announce Sept14 inflation and Aug14 trade on Wednesday, 1st Oct14.
„
The CPI is expected to record moderate inflation. We project the CPI to accelerate 0.31% mom in Sept14, lower than last month’s 0.47% mom. Until this writing, no consensus is available. All CPI components probably recorded mixed inflation degree with processed food and housing groups being the highest. Specifically, the government’s decision to raise 12kg LPG on September 10 is expected to directly add inflation by 0.06ppt. Food inflation was manageable based on our price observation whereas clothing inflation may have been low as gold price continued to decline along Sept14. Meanwhile, transportation tariff may have gone down due to the normalization of transportation demand post-religious festivity. In annual terms, we calculated inflation to reach 4.57% yoy in Sept14, generating year to date figure of 3.74%.
„
Core inflation may have been flat. On the other hand, core inflation is estimated to remain flat at 4.5% yoy in Sept14 compared to the previous month. Although gold price dropped by 8.1% yoy (4.2% mom), the rupiah depreciated by 5.4% yoy (1.3% mom) in Sep14. Furthermore, we believe producer cost pass through to consumer price was lesser as producer price index eased to 11.99% yoy in Jul14 from 15.61% yoy in May14. This is aligned with declining commodity prices.
„
Aug14 trade balance: a deficit is likely. We forecast it to record a deficit of US$431mn from US$124mn surplus in Jul14. The deficit was possibly the consequence of the still sluggish export performance followed by higher import activity. The former is expected to record a decline due to two factors. First, the impact of the government’s discount on export mineral concentrate tariff was probably limited to the whole export performance. Although the government has relaxed the barrier on mineral concentrate export, Freeport has only begun exporting its copper in end Aug14 while Newmont’s copper export is likely to start this month. Main commodity exports of CPO, rubber and coal also remained weak. CPO and rubber hold their downward trend, trimming by 10.0% mom and 8.4% mom, respectively in Aug14. Coal price only recorded a marginal increase of 0.28% mom. On the import side, after the sharp decline of it post-religious festive, we believe imports activity will normalize in Aug14. Overall, we believe export and import to reach 8.0% yoy and 11.9% yoy growth, respectively, in the corresponding period.

Market and policy implications. Despite the numbers are expected to be relatively positive, we believe the overall market perception will remain negative next week due to the unexpected result in regional election law yesterday. We think the rupiah will still hover at around Rp12,000/US$ until more certainty emerged from stronger political support for the new administration in our view. This can be reflected in the new cabinet formation. At this juncture, we think Bank Indonesia will leave its BI rate unchanged at 7.5% in the next board meeting (7/10).

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September 30, 2014

EXCL bakal melakukan tender penjualan sebagian BTS-nya pada akhir 2014

PT XL Axiata (EXCL) bakal melakukan tender penjualan sebagian BTS-nya pada akhir 2014. Peserta lelang yakni PT Tower Bersama Infrastructure (TBIG), PT Sarana Menara Nusantara (TOWR), PT Solusi Tunas Pratama (SUPR), PT Inti Bangun Sejahtera (IBST), PT Nusantara Infrastructure (META), dan PT Centratama Telekomunikasi Indonesia (CENT). Perseroan diperkirakan bakal melepas 2.000-3.500 BTS dengan penawaran minimal USD375Jt menggunakan tenancy ratio 1,6-1,8.

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September 30, 2014

The government could adjust the subsidised fuel quota

Progress on the meeting between the Government and the Parliament for the FY 2015 budget continues to be constructive. Based on the last meeting in Friday, the Government and the Parliament has agreed to open the subsidised fuel quota. Thus, the volume of subsidised fuel could be adjusted to meet the future consumption requirement. This agreement is different with the one in FY 2014 law that consists article of volume ceiling. Moreover, the Director General of the State Budget (Dirjen Anggaran) Askolani has stated that even though the volume quota is not again being fixed, the Government must come to the Parliament for approval should there be any adjustment in the quota. Moreover, there is also a discussion about fixing the amount of subsidy per liter, suggesting flexible prices in the subsidised fuel price in the future, if implemented.

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September 30, 2014

LPKR: Raised to BUY on valuation, fundamentals on track

§ Marketing sales revision with significant boost in 4Q14 sales: Our recent meeting with LPKR’s management reveals IDR3tn in marketing sales ytd (64% of its revised down full-year target of IDR4.7tn; 63% of ours) with expected significant boost in 4Q14 sales from Lippo Cikarang’s (LPCK) Orange County CBD project (includes industrial, commercial and residential areas) and additional apartment unit launches at its existing Millennium Village, Holland Village and Embarcadero properties. Demand has been excellent at its recent apartment launches, with oversubscriptions of 200% at its Hillcrest apartment tower in Lippo Village and 150% for the first phase at Holland Village. This report marks a transfer of coverage.
§ Revenue boost from Kemang Mall sale to LMIRT: LPKR’s announced sale on 15 September of Lippo Mall Kemang to KMT1 Holdings, a subsidiary of Singapore-based Lippo Malls Indonesia Retail Trust (LMIRT; LPKR: 28% stake), should boost 2014 revenue by IDR3.6tn. This sort of asset recycling measures allows LPKR to derive revenue and cash reserves to support working capital. LPKR aims to recycle IDR5.5-7.5tn in assets to its affiliated REITS annually.

Outlook: Positive on 4Q14 launches; Sizable 2014 earnings upgrade
In our view, the solid take-up rates at LPKR’s recent launches signal buyers’ confidence in its projects, which we believe will propel the company’s subsequent apartment launches as well as LPCK’s Orange County (which also has minimal competition in and improved access to the area). We also view LPKR’s asset recycling measures positively, though we are doubtful they can be carried out on an annual basis. On this, we make relatively minor changes to our estimates, raising revenue slightly by 3% in 2015F, but significantly by 49% in 2014F on the KMT1 deal (exhibit 5). We do not include potential 2015-16F asset-recycling sales in our forecasts on lack of visibility.

Rating & valuation: Upgrade to BUY, maintain IDR1,200 TP
Our revised NAV and discount assumptions still translated to unchanged 12-month IDR1,200 TP, based on a 50% discount to our end-2015F NAV (up from 40%, in line with an increased sector discount on expected interest rate hikes in 2015). Given 10% market underperformance ytd (exhibit 4), LPKR looks attractive at these levels. With 21% upside potential to our TP, we upgrade to BUY. Risks: project delays and higher-than-expected rate hikes.

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September 30, 2014

TLKM acquires 75% stake in Contact Centers Australia Pty Ltd

TLKM, through its subsidiary Telekomunikasi Indonesia International Australia, acquires 75% stake in Contact Centers Australia, a business process outsourcing (BPO) company, for AUD11mn (Rp120bn). This is aimed at boosting growth in Australia and New Zealand market as well as expanding BPO business in Indonesia.

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September 30, 2014

INTA lewat anak usahanya PT Intan Baruprana Finance (IBF), mendapat pinjaman dari BBMD

PT Intraco Penta (INTA) lewat anak usahanya PT Intan Baruprana Finance (IBF), mendapat pinjaman dari PT Bank Mestika Dharma (BBMD) sebesar Rp100M.

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September 30, 2014

KIJA coupled with Taiwan Investor to develop Morotai, North of Halmahera, near Maluku

Kawasan Industri Jababeka (KIJA) coupled with Taiwan Investor to develop Morotai, North of Halmahera, near Maluku – SD Darmono, President Director of KIJA said the progress of Morotai area which is included in the blue print of Masterplan for Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) program in design and feasibility study phase. To develop the project KIJA has prepared up to Rp6.8tn to develop an area of 1,200ha.

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September 30, 2014

JSMR eyeing to participate in tender for Balikpapan-Samarinda toll road project in Kalimantan

JSMR – eyeing to participate in tender for Balikpapan-Samarinda toll road project in Kalimantan. This 99km tol road will be tendered next year. Currently the company is doing a feasibility study and is waiting from VGF (viability gap funding) from the government. Ministry of Public Works mentioned that fudning from China is already secured. The government will tender off 2 packets (I and IV) given the readiness of the land. Comment: As largest toll road developer in Indonesia, JSMR stands to benefit from obtaining more concessions of toll roads in the future. While demand is not an issue, our concern is wehther the company can finance the development through 70:30 debt:equity split. The company has signed MoU with various foreign toll road companies to share the burden, which we think is a right move. We hope the new government can accelerate the land clearing through enforcement of the new land law effective 2015.

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September 29, 2014

State plantation holding company to launch Oct 2

State plantation holding company to launch Oct 2. The gov’t will inaugurate state company PT Perkebunan Nasional (PTPN) III next week as the holding firm for the plantation sector, dealing with 13 other plantation companies across the country. PTPN III will likely be renamed following its inauguration as the holding firm to Perkebunan Indonesia. No additional capital will be injected by the gov’t into PTPN III. The capital will instead come from the plantation firms themselves as 90% of the gov’t shares in all those firms will be transferred to PTPN III while the remaining 10% will remain in the firms.

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September 29, 2014

MPMX reviews expansion plan

Mitra Pinasthika Mustika (MPMX) reviews expansion plan – MPMX reduce their fleet addition from 4k units to 3k units. MPMX Director Agung C. Kusumo said that the decrease is due to adjustment towards consumers demand and high interest rates. However, Agung is optimistic that car renting business can grow 15% YoY, given the aggregate demand of the segment reached 500k units.

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September 29, 2014

KIJA refinanced bond at 7.50%

Kawasan Industri Jababeka (KIJA) issued new bond of USD190mn with interest rate of 7.50% new bonds maturing in 2019. KIJA’s main purpose for issuing this new bond is to refinance its old bond which carry high interest rate. KIJA has successfully recalled 76.4% of its USD175mn bond (USD133.7mn) which carry 11.75% interest which matures in 2017. KIJA will use the remaining proceeds of the new issuance for working capital purposes. We estimate that the refinancing allows KIJA to save USD 5.7mn of cost of fund which implies 6% of FY13 EBITDA. We expect KIJA to raise more funds to finance its plan to add one power plant with capacity of 120MW which is estimated cost about USD100mn.

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September 29, 2014

Indonesia Strategy: BI: Ready for action

Our lunch meeting with Mirza Adityaswara, Senior Deputy Governor of the Indonesian Central Bank (BI), highlighted the following areas of focus:
1. Managing inflation: Assuming no fuel price hike, BI expects 2014 inflation to reach 5.2-5.4% (including electricity hike). Based on BI’s sensitivity analysis, for every IDR1,000/liter increase in the fuel price, Indonesia’s inflation will rise by 1.2ppt. Thus, assuming a 4Q14 fuel price hike of IDR3,000/liter, inflation would be close to 9% in 2014 while a hike next year would mean 2015 inflation of around 7.5%.

2. Reducing CAD to a more sustainable level: Current Account Deficit (CAD) requires financing. Hence, ahead of the likely Fed rate hike next year, it is imperative that Indonesia must lower its CAD to a more sustainable level of 1-2% (exhibit 5). Pressure will come from lower coal and CPO prices given China’s slower economic growth. Hence, BI has tightened and allowed the IDR to weaken to reduce imports. However, this has not been effective in curbing fuel imports which has remained at IDR42-43tn (USD3.7-4.0bn) per month. Thus, going forward, Indonesia must cut fuel imports by raising subsidized fuel prices.

3. Monitoring and managing risk of external debt: Corporate sector external debt has been rising rapidly. This needs to be addressed. BI will not limit, but will implement prudential measures. For example, all FX liabilities must be covered by FX assets with the difference to be hedged. To facilitate this process, BI will also develop hedging.

4. Strengthening and deepening financial markets: The spot market in Indonesia is shallow with interbank and corporate transactions accounting for only USD4-5bn per day, compared to Thailand’s USD11-13bn. Hence, BI has recently provided deregulation in the FX market, but at the same time establishing greater prudential measures.

5. Enforcing IDR use for all domestic financial transactions: Some transactions are still implemented in USD, and this must stop (e.g. gas purchases are still quoted in USD between Indonesian entities). On the exchange rate, BI is currently comfortable with the IDR at the 11,600-11,900 level, which based on REER is currently undervalued (exhibit 4).

Outlook: 2015 will be an even tougher year than 2014
Indonesia’s USD16bn portfolio investment in 1H14 is positive, but this must be watched closely with prudent macroeconomic fundamentals in place to prevent outflows, particularly when the Fed raises interest rates next year. Thus, BI is getting ready for this by strengthening its FX reserves, which is currently at USD111bn in August. At this stage of the cycle (i.e. post the elections), the market is currently waiting to see if the new government can keep its promise to ease the budget deficit and balance of payments through policies that are pro-investment and pro-reforms. Failure to do so will mean capital outflow reversals. Finally, with higher inflation and interest rates (required to prepare for the Fed rate hike) ahead, 2015 is shaping up to be a tougher year than 2014.

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September 29, 2014

Panin Sekuritas Research 29 September 2014.

Bursa Amerika jumat kemarin ditutup meningkat setelah pemerintah AS menaikkan estimasi pertumbuhan pertumbuhan ekonomi pada kuartal kedua 2014 (4,6% yoy dari 4,2%) dan data sentimen konsumen AS bulan September meningkat (84,6 dari 82,5). Dow +0,99%; S&P 500 +0,86%; Nasdaq +1,02%. Sedangkan bursa regional ditutup terkoreksi ditengah kombinasi beberapa sentimen negatif seperti perkembangan konflik geopolitik di Rusia yang mengajukan RUU yang mengijinkan perampasan aset asing; perubahan kepemimpinan pada Bank Sentral China; dan ekspektasi kenaikan Fed rate yang lebih cepat. Presiden Fed Dallas, Richard Fischer mengatakan kenaikan Fed rate mungkin akan terjadi pada musim semi 2015.

Pemerintahan Jokowi-JK menargetkan pertumbuhan ekonomi 7% tercapai pada tahun ketiga pemerintahan. RAPBN-P 2015 akan diajukan pada Januari/Februari 2015 setelah RPJMN 2014-2019 diselesaikan oleh Bappenas. Banggar DPR dalam Panja RUU APBN 2015 memutuskan membuka pembatasan kuota volume BBM Bersubsidi 2015. Selain itu, kenaikan harga BBM pada 2015 juga diserahkan oleh pemerintah, jadi tidak tergantung oleh persetujuan DPR. IHSG hari ini diperkirakan dapat naik walaupun tertekan sentimen pelemahan Rupiah. Rupiah melemah ke Rp12.113. Pelemahan nilai tukar rupiah dan regional didorong dari penguatan indeks dollar.

Trading BOW: ADRO, BBNI, BBCA, BMRI, SMGR, SMRA, PTPP, WIKA, ICBP.

Panin Sekuritas.

September 29, 2014

Greed & Fear (Subsidy focus)

Key points on Indonesia from GREED & FEAR:

· Hopes are high on the next president, Jokowi to deliver his reform agendas specially on energy (energy diversification away from expensive diesel fuel to coal/gas, including the long overdue phasing out of energy subsidies), as well as implement badly needed infrastructure programmes.

· As the law for land procurement for public infrastructure projects will be effective next year; the most important attribute needed to implement infrastructure remains the political will. This where Jokowi has scored well as governor of Jakarta.

· Still he will face immediate challenges given his continuing lack of a clear parliamentary majority and given the challenging macroeconomic backdrop, most particularly a large current account deficit (US$4.2bn or 2% of GDP in 1Q14 to US9.1bn or 4.3% of GDP in 2Q14)

· Greed & Fear continues to give Jokowi the benefit of the doubt on both fronts. JOkowi’s senior economic advisor, Luhut Pandjaitan, seemingly committed in public statements at CLSA’s HK Forum last week to the incoming administration raising subsidized domestic fuel price by 46% (Rp3,000/lt) in November with a further increase of 16% of Rp1,500/lt proposed for 2015.

· The Indonesia story is about, for at least the next 3 months, what does (or does not happen) to energy subsidies.

· Indonesian banks continue to enjoy the highest net interest margins in Asia with a 6.9% NIM (covered stocks).

· At the macro level, credit growth continues to slow from 23% YoY in Sept 2013 to 15% YoY in July. This is a positive for the reduction in imports in the economy and stabilization.

· NPLs remain benign at 2.2% (up from 1.8% in Dec 2018) considering the pace of rapid credit growth over the past decade and monetary tightening is peaking.

· That Indonesia offers the highest ROE of markets covered in Asia (58 stocks) at 20% vs 14% for Asia ex-Japan is the fundamental reason to stay invested.

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September 29, 2014

SCMA: Taking a Quick Break

Due to seasonality issues and the fuel subsidy price hike, we expect SCMA’s 3Q14 result to lag compared to previous quarter. SCMA is under negotiation with its biggest customer, UNVR, for higher rate card. We believe the company’s earnings should rebound in 4Q14 with higher rate card and ad demand.

Slower ADEX in 3Q14. The company has noted that ADEX growth in 3Q14 is slower than expected at 10% yoy. This is partly due to the fuel subsidy price cut overhang. SCMA noted that some advertisers are holding back their A&P spending during .3Q14 which results in lowering the company’s revenue in 3Q14.

Sales to UNVR under negotiation. SCMA has been in negotiation with UNVR in order to improve its rate card. UNVR has been buying ad space from SCMA on a CPRP (Cost per Rating Point) basis and paying the cheapest rate. The company noted that it is willing to cut down sales to UNVR in exchange for higher rate card. As a result SCMA did not book sales to UNVR for 2 weeks in August. However, the company managed to increase its average rate card going forward. Sales to UNVR is 16% of SCMA’s total sales. SCTV’s highest rate card is now at Rp65mn/slot during primetime drama “Ganteng Ganteng Serigala”.

Cost is under control. Despite potential revenue slowdown, cost is still under control. We expect margin to be slightly lower than in 1Q14 and 2Q14 as SCMA started to air the Barclays Premiere League in 3Q14. SCMA recorded gross margin of 66% in 2Q14.

Rebound in 4Q14. Q3 is typically a bad quarter for media, but the sector should rebound in Q4 during the holiday season. We believe SCMA’s high audience share during 2Q14 and 3Q14 should be translated into higher revenue by then. Moreover, SCMA’s higher rate card would also apply by end of 3Q14.

Maintain BUY. We expect SCMA’s revenue growth to remain the strongest vs. competitors for the year as SCTV managed to slip pass RCTI in terms of audience shares and Indosiar managed to move up in terms of shares ranking. We maintain our BUY call on the counter with TP Rp4,700. The stock is currently trading at 25.7x FY15F PE.

Risks: 1) Weakening IDR; 2) Slower A&P spending from corporate; 3) Tight audience shares competition.

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September 29, 2014

CPO export duty to be 0% starting on Oct 1st

CPO export duty to be 0% starting on Oct 1st – The decline on export duty is expected to boost export CPO to overseas for at least by 5%yoy. As per Sept, In 2013, realization of export CPO has reached 21mn ton or valued at US$19.9bn.

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September 29, 2014

PGAS connects more households to the network in Jakarta area

PGAS connects more households to the network in Jakarta area. Currently 73,000 households are connected. 500 households and then an additional 200 households will be connected. The company invited President-elect Joko Widido to test some of the equipment.

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September 29, 2014

Stocks Close Sour Week with Savory Gains

The U.S. equity markets closed the trading session nicely higher, with stocks recapturing most of the previous session’s losses as sentiment for the week was seemingly arrested in the face of rising global growth uncertainty. Treasuries were lower following the rise in stocks and domestic reports that showed an upward revision to 2Q GDP and a slightly stronger-than-forecasted read on consumer sentiment. In equity news, Dow member Nike bested the Street’s quarterly expectations and BlackBerry posted a smaller-than-anticipated 2Q loss. PIMCO co-founder Bill Gross announced he is leaving the company and joining Janus Capital Group, while Starboard Value LP acquired a significant ownership stake in Yahoo and urged the company to explore a strategic combination with AOL. Meanwhile, the U.S. dollar was higher, gold was lower and crude oil prices were mixed.

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September 27, 2014

Bumi Resources fail to raise a full size of intended right issue, but CIC is now a shareholder

Bumi Resources fail to raise a full size of intended right issue, but CIC is now a shareholder. Bumi Resources (BUMI) announced that it only received subscription of IDR4.7tn (USD393m) vs. a maximum target of IDR8.0tn in the right issue that ended 4 Sep 2014. The right issue is intended to convert the creditor into equity shareholders (debt to equity swap). The right issue was offered to existing equity holder and creditors (debt coversion). Based on our understanding, the IDR4.7tn are largely subscription (debt conversion) from its creditors, including China Investment Corporation.

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September 27, 2014

Casino Advocate Sees November as Lucky Month for Bill

Casino advocates have been hoping for more than a decade that Japan would legalize casino gambling, only to come up snake eyes time and again. Now a casino proponent is wagering that parliament will take a big step toward doing it within three months.

“Given the likelihood that the government will not submit other important legislation which would be given discussion priority, it’s highly likely that the casino bill will be passed by November,” Toru Mihara, a professor at Osaka University of Commerce who advises lawmakers pushing the change.

Japan’s parliament is expected to convene for its fall session at the end of September and meet through December.

The bill, called a promotion law, wouldn’t immediately lift the ban on casino gambling. It would direct the government to craft another law to give the final go-ahead.

Casinos, or integrated resorts as advocates like to call them, are part of Prime Minister Shinzo Abe’s package of economy-boosting policies known as Abenomics. Mr. Abe visited casinos in Singapore in May, signaling his support.

Global casino operators had hoped to have the promotion bill passed by June of this year so the first casinos could open by the 2020 Summer Olympics in Tokyo. Mr. Mihara, who spoke at a news conference Thursday, said Japan could still have at least one casino ready by that year.

Details of the casino plan, including locations, are likely to wait until after the promotion bill is passed. Mr. Mihara rejected an idea floated by some casino skeptics of excluding Japanese citizens from local casinos. He said he expected 80% of casino customers in Japan would be Japanese, unlike casinos elsewhere in Asia where many of the customers are nonresidents.

A recent study commissioned by the health ministry found a high rate of problem gambling among Japanese people. An official at the ministry, which would likely be in charge of measures to prevent gambling addiction, said it didn’t think barring Japanese from casinos was the right approach to the addiction issue.

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September 27, 2014

Jakarta’s MRT Project Caught Up in Legal Wrangle

Jakarta’s MRT Project Caught Up in Legal Wrangle. The construction of Jakarta’s first mass rapid transportation rail line will likely be severely hampered by ongoing legal proceedings faced by its main construction company, Japan’s Shimizu Corporation, brought by one of its former joint venture partners, Dextam Contractors. In 2013, Dextam requested to a Jakarta court that Shimizu leave the consortium awarded the project. In early September, the court issued an intermediate decision that rejected Shimizu’s motions to have Dextam’s request thrown out. Shimizu was then left with the option of an appeal, which they decided to attempt. The appeal is currently under way, and a verdict is expected in the near future.

September 26, 2014

Visit to contractors: slew of new contract awards sets to unfold in 4Q14

· Given the seasonality factor of higher flow of new order book toward the end of year, two contractors that we met, Waskita Karya (WSKT) and Wijaya Karya (WIKA), are confident that the full-year target remain on track. Positive newsflow on new contract awards should be expected in September-December 2014.

· WKST has recently secured IDR1.4t new contract to build superblock in Surabaya, bringing its YTD new order book to IDR12t, accounting for 71% of our full-year forecast and 64% of management target. This makes the company with the highest achievement (as a % of full-year) among the other contractors. One of the strategic plan that will be rolled out by the company in the near-term is the potential acquisition of Bekasi – Cawang – Kampung Melayu.

· On WIKA, the company sets to announce significant additional new contracts winning in the near-term. Recently the company has won overseas project in Myanmar worth around USD125m. Continue expansion on overseas project would be mainly on Timor Leste and Saudi Arabia to build Hajj Dormitory. 9M14 net profit is likely to reach above IDR400b, around 60% of our 2014 target.

· We currently have a BUY rating on WIKA and WSKT. Despite potential negative sentiment on the share price from the upcoming fuel price hike, positive structural reform on higher budget allocation for infrastructure in 2015 will likely allow the government to accelerate infrastructure projects.

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September 26, 2014

Pemerintah masih belum menyetujui keinginan DPR untuk membatasi kepemilikan lahan melalui pembahasan RUU Pertanahan

Pemerintah masih belum menyetujui keinginan DPR untuk membatasi kepemilikan lahan melalui pembahasan RUU Pertanahan. Berdasarkan draft RUU Pertanahan ada beberapa pembatasan penting yang ingin diatur oleh DPR dalam RUU yakni agar pemberian HGU tanah kepada sebuah badan hukum atau kelompok badan hukum yang saham mayoritasnya dikuasai oleh satu orang dalam propinsi dibatasi dengan luas paling banyak 10.000 HA.

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September 26, 2014

KIJA to develop Special Economic Region in Morotai, North Maluku

KIJA has partnered with around 20 Taiwanese investors to develop Special Economic Region in Morotai, North Maluku (1,250
ha). Plans include developing tourism, logistics and fishery industries

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September 26, 2014

BBNI: Visit to BNI’s subsidiaries

We attended visits to several BBNI’s subsidiaries, including BNI Life Insurance, BNI Syariah and BNI Securities with key take
aways:
„
The bank wants to increase the contribution from the subsidiaries, currently at around 3-4% of the profit to around 10%
in 3-5 years time. This will be done through the joint venture with foreign shareholders which are expected to bring in
the know how, products and new technology to the respective companies. BBNI has so far invited Sumitomo Life
Insurance, which takes 40% of BNI Life Insurance and SBI Securities for 25% of BNI Securities. They are also in talks with
prospective strategic investors for the Syariah banking.
„
Of the five major subsidiaries, the bank is contemplating whether to divest BNI Multifinance or not as they are not
making money. There is a plan to acquire a general insurance company in the future.
„
Among the subsidiaries, BNI Life is the largest in terms of assets and equity participation, as Sumitomo injected Rp4.2tr
for the 40% stake. Sumitomo has two people in the BoD and seven other expats who are working for IT, product
development, bancassurance and treasury division. They have an ambitious target to increase their customer base to
1.5m (10% of Bank BNI’s total customers) from 100k currently withing five-year plan with market share to increase from
4% to 10%. Bancassurance will be the major growth driver for life insurance business, and it accounted for 66% of total
premium income in 2013. Other unit business in the life insurance business are employee benefits (23% of total premium
income) and agency (11%).
„
On BNI Syariah the bank just injected another Rp0.5tr capital (to Rp1.8tr) to the bank, which is the third largest syariah
bank in Indonesia. There is also a plan to issue sub-debt in early 2015. On the assets side, around 50% of the syariah
financing is for mortgage (yield 13% with max tenor of 15 years), 25% for SME loans (Rp1-10bn), micro loans (Rp5-500m),
commercial loans 10% and credit cards 5% (the only syariah credit card with 212k cards issued, yield 21%). On the
liabilities side, TPF includes Rp4.4tr of the Haj Funds, accounting for around 25% of total deposits while their CASA
accounts for around 49-50% of total deposits.
„
BNI Securities will rely on the internet trading, set up by SBI Securities, for the future growth. Currently it has 3.9%
market share in trading with 23,700 customers and it also controls BNI Asset Management with NAV of Rp8tr. Of the 17
branches BNI Securities has, two of them are still making losses: Palembang and Makassar.
„
We have Neutral rating on BBNI with TP of Rp5,200. It is trading at 2.0x and 1.7x P/BV for 2014 and 2015.

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September 26, 2014

SOE Ministry propose 4 scheme for banks consolidation

SOE Ministry propose 4 scheme for banks consolidation. The scheme will be proposed to the presidential working unit in early October to be put on SOE master plan 2015-2019. Based on Investor Daily’s undisclosed sources in the ministry, The schemes are 1) the 4 SOE banks to be combined to 2 banks, consisting of corporate and retail bank. 2) A new company will be formed as holding of the 4 SOE banks. 3) Make the 4 SOE banks into 2 banks, without dividing into corporate and retail bank. The source said: BRI is strong in retail, thus can study with BNI, Mandiri that already strong in corporate can study retail with BTN 4) Make 2 banks that has a special niche be alone, and consolidate the other 2 SOE banks.

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September 26, 2014

Key takeaways from visit to BNI Sharia and BNI Life

We noted ample growth potential from Bank Negara Indonesia (BBNI) subsidiaries, although profit contribution is expected to remain marginal in the medium-term. Hence, we maintain BBNI as one of our favorite name in the banking sector. TP is currently at IDR5,800 (FY15: 8.8x PER; 1.6x PBV). It’s BNI Sharia has 50% CASA, the highest portion compared to other sharia banks. NPF has also been maintained at 2% with no issue in SME segment like what currently happened in Mandiri Sharia. These factors combined should translate to healthy profit growth. For BNI Life, the main target is to get double-digit market share in the medium-term, up from currently 4%. As shared by the newly appointed directors that represent Sumitomo as BBNI’s strategic partner in BNI Life, development will be made in three areas: 1) Recruitment and training for bancassurance specialist; 2) New products; and 3) Specific marketing strategy for each target market.

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September 26, 2014

BUMI menunda pengeluaran saham baru sebanyak 12.650.000.000 lembar senilai Rp3,1T atau US$275 juta

PT Bumi Resources (BUMI) menunda pengeluaran saham baru sebanyak 12.650.000.000 lembar senilai Rp3,1T atau US$275 juta. Rencananya hasil right issue tersebut untuk pembayaran utang kepada kreditur.

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September 26, 2014

BWPT: GEP acquisition plan too expensive

GEP acquisition plan too expensive
§ EV acquisition cost of USD15.4k/ha not warranted: In a prospectus filed on 24 September, BWPT has said it is planning a 6:1 rights issue at IDR390-411/share to raise IDR10.5-11.1tn to acquire Rajawali-owned Green Eagle Plantation Holdings (GEP) for IDR10.5tn. The issuance would take place on 24-28 November. We believe the acquisition valuation of USD15.4k/ha (20% sector premium) is excessive, as 39% of GEP’s estates are immature and has an overall yield of 16.1x (average age: 8.4 years).
§ Minimal synergies due to scattered estate locations: Given GEP’s maximum planted area in each location of only 21k ha, we expect minimal synergy opportunities as GEP’s total planted area of 72k ha is scattered over more than 5 locations.
§ Minority shareholder dilution: Despite additional earnings from the acquired company, we believe the deal would significantly dilute minority shareholder value, and as such we forecast for BWPT a significant 2015 EPS decrease of 19% y-y (exhibit 5). We do not expect the acquisition to be value accretive until 2017, and do not expect EPS to recover to the 2013 level of IDR40 for the next 4 years.

Outlook: Weak CPO price and deal to limit growth
As we see limited synergies between the two companies’ estates and no benefit from economies of scale given the estates’ various sizes, we are not positive on the planned acquisition of GEP. Additionally, we expect the CPO price to remain unsupportive, with 2015F growth of only 4% y-y to USD866/ton. This could limit BWPT’s earnings growth, bringing 2015F revenue to IDR4.9tn, up 178% y-y, but a lower EPS, on the back of the new acquisition.

Rating & valuation: Cut to REDUCE and lower TP to IDR360
We expect BWPT’s severe underperformance (81% ytd) to persist as we look for severe dilution due to the expensive acquisition and a continued weak CPO price. We cut our rating on BWPT to REDUCE from Buy and lower our 12-month target price to IDR360 (from IDR1,400), reflecting an EV/ha of USD12.4k/ha, in line with the sector and a 2015F PE of 14.0x (prev.16x), at par with the sector’s target PE of 14.1x. Risks to our view include higher-than-expected CPO prices and acquisition synergies.

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September 26, 2014
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