2nd SESSION JCI on 31.10.2014 (By: D’ORIGIN – Veni Fitriani)

IHSG @5089.55 (+30.70pts) (+0.61%)
(H: 5089.55 ; L: 5060.60)
Value: 5.728 T (NG 881 B )
Volume: 41.806 M Lot (NG 9.067 M Lot)
Foreign Nett Buy 325.88 B…….!!!
EXCL @5360 ~ 125.57 B(F vs F)
Foreign Value 42.7%

*BUY (Regular)
F Buy 2079.8 B
D Buy 2766.7 B
*SELL (Regular)
F Sell 1706.8 B
D Sell 3139.7 B

JISDOR: 12,165/12,082
NDF:       12,138/12,085

JCI for tomorrow:
Support: 5060, 5030
Resist:    5107, 5120

FINANCE(+1.11%).   (1.20 T )
TRADE. (-0.07%) (1.16 T )
MANUFACT (+0.11%) (1.16 T )
INFRA.   (+0.80%) (995.54 B )
PROPERTY (+0.87%) (602.98 B )
CONSUMER (+0.65%) (556.16 B )

INDS.   @2100(+23.53%)
BTEK. @1500 (+22.95%)
ERTX @420. (+13.51%)
MTDL @595. (+12.26%)
PEGE @220. (+10.00%)
LCGP @600. (+9.09%)

TGKA @2500(-15.97%)
BSWD@1065 (-15.48%)
PTIS.  @745.  (-15.34%)
AIMS. @381.   (-15.33%)
TIRT. @88.     (-14.56%)
UNIC.  @1925 (-12.50%)

BBRI. @10975 (251.64 B )
BBNI. @5917.   (112.37 B )
BMRI @10289 (80.09 B )
INDF.  @6724. (48.99 B )
UNTR@18306 (35.64 B )
INTP.  @23895 (32.62 B )
AALI. @23333. (31.44 B )

TLKM @2747 (116.01 B )
ASII.    @6780 (86.31 B )
BBCA. @12954 (79.19 B )
ICBP.   @10961 (13.61 B )
ACES @807.  (13.33 B )
MLPL. @936.   (13.24 B )
INCO.  @3766 (12.77 B )

BBRI.  @11075 (+2.31%)
UNTR @18375 (+3.96%)
TLKM @2750 (-0.36%)
ASII.    @6775. (-1.81%)
BBCA @13050 (+0.38%)
BBNI.   @5950.  (+2.59%)
PGAS @5950.  (+1.28%)
BMRI.  @10350 (+1.47%)

SIAP.   @179 (2.088.337 lot)
ENRG @113.  (1.444.925 lot)
TLKM @2750 (1.034.398 lot)
META @196 (1.029.880 lot)
SRIL.   @167 (1.010.292 lot)
TARA @411. (1.001.743 lot)
KIJA.   @272 (852.656 lot)
LPKR @1070 (751.206 lot)

“…Have a blessed Weekend…”

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October 31, 2014

RALS: 3Q14 results inline

Within estimates, flat performance. RALS booked 9M14 revenue of Rp4.6trn (-2%yoy) which reflects 74%/72% of our/consensus estimates and net profit of Rp340bn (-1%yoy) accounting for 86%/82% of our/consensus forecast, broadly inline. The bottom line performance was better than our initial expectation of 78% of FY14 target in which we expect net margin of 6.5%. Better profitability was due to Rp30bn interest income for 3Q14 period which boosted the net profit.
Balance sheet remains healthy. RALS maintained its net cash position and with no expansion plan this year, the company now holds over Rp1trn cash on hand by 9M14. Further, we see decline in inventory days to 70 days in 9M14 compare to 143 days in 1H14 as RALS has passed its peak season sales in July with Lebaran. In addition, AP has similar declining trend to inventory while AR has remained relatively constant.
Limited growth prospect. We view 4Q will be a soft performance for RALS, considering historical contribution of 20% from FY sales and 10% of FY net profit. Going into 2015, we are expecting 5 store expansions and supermarket conversion to SPAR supermarket. In our view, the conversion will only add to RALS financial cost as we consider limited store traffic due to overlapping location between supermarket and wet market coupled with higher price sensitivity from lower segment customers.
Maintain Neutral, TP Rp800. We maintain our Neutral call on RALS with TP Rp800 reflecting 14x FY15 PE. We think the prospect for RALS remains dim considering limited store expansion and additional risk from supermarket conversion.

October 31, 2014

SMGR: quarterly earnings – Slightly below ours and consensus estimates on weak margin

„Margin slightly weaker than our forecast. As of 3Q14, SMGR booked NPAT of Rp1.3tn, down by 5% YoY and 17% QoQ. SMGR’s 3Q14 result is slightly below our expectation and consensus, comprising 69% of FY14F forecast vs. our initial expectation of 71%. Margin on 3Q14 dropped to 42% versus 45% in 3Q13. We initially expect SMGR to book gross margin of 44% in 3Q14. SMGR’s COGS per MT was up by 14% YoY and its average ASP increase is up by 4% on QoQ basis.

Spike on costs is caused y increase in maintenance cost (up by 11% YoY), depreciation (up by 18% YoY) and insurance (up by 11% YoY). Cost of transportation per MT also went up by 9% YoY. As bulk of the weakness is caused by fixed costs, we think margin should improve along with increase in sales volume.
Balance sheet remains healthy. SMGR’s balance sheet remains firm, as the company is at slight net debt of Rp75bn as of 3Q14. The company has sufficient balance sheet to fund its Greenfield expansion in Rembang and brownfield expansion in Indarung. The company is currently reviewing potential 3mn MT Greenfield expansion in Aceh. Expansion is pending shareholder’s approval next year.
Maintain Buy for SMGR. We maintain our Buy rating on SMGR with PT of Rp18,300. Stock is currently trading at FY15F P/E of 14.3x. We think that the prospect on FY15F should be slightly better, as coal price (which is around 30% of COGS) has dropped by 24% as of YTD. Additionally, our economist expect IDR to remain flat on YoY basis. We are reviewing our forecast post result.

October 31, 2014

ADRO: 9M14 results in line with expectation

ADRO posted in line 9M14 NPAT. ADRO booked 9M14 NPAT of US$220mn, down by 30% YoY, 77% of ours and 83% of consensus.
Revenue is up 3% YoY in 9M14. ADRO booked 9M14 revenue US$2,507mn due higher sales volume of 8%, while ASP declined 5%. Cost of revenue remains flat YoY at US$1,921mn due to 8% lower coal cash cost at US$32.65/ton and implementation of cost efficiency initiatives.
9M14 operating profit up by 12% YoY to US$471mn. However, NPAT decline is due to inclusion of gain from Balangan acquisition in 9M13 and higher interest expense in 9M14.

October 31, 2014

MPPA, Hypermart operator, plans to open 20 outlets in 2015

MPPA – Matahari Putra Prima, Hypermart operator, plans to open 20 outlets in 2015. The stores that will be opened next year will be the 7th generation store. About 80% of the stores planned to be opened next year will be located outside of Java island. This year, MPPA targets to open 10 stores, it has so far opened 3 stores as of Oct, bringing the total number of stores to 102.

October 31, 2014

WSKT: 9M14 results- In line

WSKT posted Rp129bn net earnings during 9M14, which was in line with our expectation and consensus’. This equals to 9% yoy and 32% qoq net earnings growth. The in line achievement was mainly supported by improving margin and gain from investment divestment. Maintain NEUTRAL with Rp850 TP.
Slower production rate.. WSKT only posted Rp5.3tn revenue in 9M14, 2.6% yoy growth and only 46% of our FY14F revenue (vs. 53% during the same period last year). This is due to flattish new contract growth that has been secured by WSKT in the 1H of the year (Rp6tn in 1H13 vs. Rp7tn in 1H14).
..but compensated by improving margins. Gross profit margin increased by 120bps on yoy basis. One of the main drivers was the support from its precast concrete production (Rp235bn precast concrete revenue in 9M14 vs. Rp8bn revenue in 9M13). There was a positive trend on WSKT G&A expense (12% yoy growth), compared to PTPP of 39% and WTON at 52%.
The strongest new contract achievement among peers. WSKT recently signed several sizeable new contracts into its backlog order (Secured new contract as of Sep14 was at Rp13.5tn). The management kept its target for Rp18.7tn of new contracts this year.
Several one-off items and leverage level. WSKT recorded Rp65bn allowance for doubtful account (mainly from unsettled A/R) and Rp32bn gain from associate company divestment. In addition, WSKT maintains its net leverage (net debt to equity) level at 0.8x.

Maintain NEUTRAL with Rp850 TP (implying 16.5x 15PE). WSKT is getting more active on the toll road segment, as it acquired the 57km (Rp2.2tn) Pejagan – Pemalang toll road concession from MNC Group and is eyeing the 21km (Rp7tn) Bekasi – Cawang – Kampung Melayu toll road. However, we think that with Rp2.1tn equity size, WSKT needs a partner to develop the toll road projects. WSKT is currently trading at 19x 2015PE at 16% 2015ROE.

October 31, 2014

BOJ memutuskan akan menambah program stimulusnya

¤ BOJ Review
Bank Sentral Jepang (BOJ) mengumumkan keputusan yang mengejutkan pasar siang ini. BOJ memutuskan akan menambah program stimulusnya. Program penambahan stimulus ini mendapatkan suara 5 anggota, sementara 4 anggota lainnya menolak. Empat anggota yang menolak adalah Morimoto, Ishida, Sato, Kiuchi.

Adapaun penambahan yang dilakukan BOJ yaitu:
– Meningkatkan monetary base menjadi 80 triliun yen per tahun.
–  Meningkatkan pembelian ETF dalam 1 tahun dari 1 triliun yen menjadi 3 triliun yen.
–  Meningkatkan pembelian J-REIT dalam 1 tahun dari 30 miliar yen menjadi 90 miliar yen.
– Memperpanjang jatuh tempo rata-rata kepemilikan obligasi JGB dari 6-8 tahun menjadi 7-10 tahun.
–  BOJ akan mengikutsertakan JPX-Indeks Nikkei 400 dalam program pembelian aset.

BOJ juga mengungkapkan bahwa akan tetap mempertahankan pelonggaran moneter selama diperlukan untuk mencapai tingkat inflasi yang stabil di 2%. BOJ juga akan melakukan penyesuaian kebijakan bila diperlukan.

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October 31, 2014

1st SESSION JCI on 31.10.2014 (By: D’ORIGIN – Veni Fitriani)

IHSG @5068.07 (+9.216pts) (+0.182%)
(H: 5087.24 ; L: 5067.07)
Value: 2.180 T (NG 413 B )
Volume: 18.115 M Lot (NG 2.440 M Lot)
Foreign Nett Buy 107.19 B
Foreign Value 36.6%

*BUY (Regular)
F Buy 542.5 B
D Buy 1224.7 B
*SELL (Regular)
F Sell 454.5 B
D Sell 1312.7 B

JISDOR: 12,165/12,082
NDF:       12,138/12,084

JCI for today:
Support: 5020, 5000
Resist: 5095, 5115

TRADE. (+0.45%).  (546.39 B )
MANUFACT (-0.15%) (379.50 B )
FINANCE (+0.26%) (342.29 B )
INFRA.    (+0.21%).  (336.20 B )
PROPERTY (+0.48%) (285.98 B )
CONSUMER (+0.39%) (194.03 B )

BBRI. @10890 (60.77 B )
BBNI.  @5894. (55.67 B )
INDF.  @6694.  (20.72 B )
UNTR@18275 (12.94 B )
PGAS @5953.  (11.07 B )
AALI.  @23256 (11.02 B )
BMRI. @10218. (9.33 B )

TLKM @2752.  (28.88 B )
ASII.    @6794.  (28.17 B )
BBCA. @13044. (27.21 B )
UNVR @30384 (8.90 B )
ACES. @800.  (5.59 B )
MDLN. @494. (4.93 B )
MYRX @620 (4.80 B )

UNTR @18275 (+3.39%)
BBRI.   @10900 (+0.69%)
BBNI.   @5900 (+1.72%)
TLKM @2740 (-0.72%)
SSMS @1265 (+2.43%)
ASII.    @6750. (-2.17%)
INDF.   @6675. (+1.14%)
LPKR @1070.  (0.00%)

SIAP.   @173.   (1.352.354 lot)
ENRG. @114.   (874.730 lot)
SUGI.   @423. (718.574 lot)
SSMS @1265 (591.572 lot)
LPKR.  @1070 (542.460 lot)
TARA @408 (499.180 lot)
META @195.  (408.142 lot)
SRIL.   @167.  (384.647 lot)

“…selamat menunaikan ibadah sholat Jum’at…”

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October 31, 2014

UNTR: Potential negative earning surprise in audited FY14

Continuing weak coal price makes UNTR’s coal mining business continue to generate negative gross margin. Due to the continuing weak coal price, UNTR is in the process of reviewing its mining properties recoverable amounts (in 9M14, its mining properties’ net book value is Rp11.9tn vs net income of Rp4.7tn). There is a potential downward adjustment in audited FY14 carrying value. Reiterate SELL.
9M14 net income is above expectation. Although 9M14 revenue is within expectation (74% of consensus FY14F), 9M14 net income is above expectation (81% of consensus FY14F). The main driver of strong 9M14 net income is PAMA’s expanding profit margin (Gross margin: 9M14= 25.3% vs 9M13=18.4%).
Excalating trade receivable which overdue>90days. UNTR’s trade receivable which has already overdue>90 days keep increasing from Rp1.2tn in FY13 to Rp2.3tn in 6M14 to Rp2.6tn in 9M14. (Please see figure 8)
Potential impairment on mining properties in audited FY14. Continuing weak coal price makes UNTR’s coal mining business keep generating negative gross margin. In 9M14, its coal mining’s negative gross margin (after elimination) around 12.3%. Currently, UNTR is in the process of reviewing its mining properties recoverable amounts. In 9M14 balance sheet, UNTR’s net book value of mining properties is around Rp11.9tn (as a comparison, its 9M14 net income is Rp4.7tn). There is a possibility of sizable downward adjustment in its mining properties’ carrying value in audited FY14.
Possibility of negative earnings surprise in audited FY14. We suspect there is a possibility of negative earnings surprise in audited FY14 due to downward adjustments in long outstanding trade receivable and mining properties carrying value. However, we still not factor in due to difficulty in assessing the potential amount.
Reiterate SELL recommendation with TP:Rp13,950. We maintain our assumptions. We reiterate our SELL rating because we think there should be negative earnings surprise in audited FY14 due to impairment charges, which should escalate its FY14 COGS

October 31, 2014

WIIM: Improving 3Q14, yet 9M14 results still below

Improving 3Q14, yet 9M14 results still below. WIIM booked 3Q14 NPAT of Rp27bn (-16%YoY, +53.8%QoQ) which has improved significantly vs 2Q14, however 9M14 NPAT of Rp80bn (-28%YoY) was still below consensus comprising 65% of full year forecast.
Weak 9M14 sales only comprised 59% of full year consensus forecast due to significant volume drop especially in its SKM-mild product which dropped over 50%YoY vs SKM-FF which see 9-10%YoY growth and strong SKT sales growth over 60%YoY. In addition, the recent new mild product under “Fun Mild” brand which launched in 2Q14 was not successful and has been discontinued.
Margin improvement in 3Q14. WIIM witnessed EBIT margin recovery up to 8.8% vs 7.0% in 2Q14 mostly thanks to higher ASPstronger sales during 3Q14 as the sales volume from Diplomat Mild start to recover, which reflected from its 18.8%QoQ sales growth up to Rp451bn.
What’s next? Currently the Company is focusing more on the existing products and will expand Diplomat mild market penetration into Sumatera market to boost its sales. We believe entering the tier 1 would be the key success for WIIM to witness exponential growth over longer term otherwise it would have mediocre outlook being only tier 2 player. We believe WIIM needs to reevaluate its marketing and product launches strategy going forward in order to achieve its goal being 1st tier player.

October 31, 2014

SMCB: weak 9M14 result

„Weak 3Q14 result. SMCB posted NPAT of Rp121bn in 3Q14, down by 9% YoY and 4% QoQ. Operating profit was down by 53% YoY and 26% QoQ due to squeeze in its operating margin. SMCB’s gross margin is only 27% in 3Q14 versus 37% in 3Q13. Seasonally for SMCB, margin would recover in 2H as they imported less clinker. Our channel check to SMCB suggests that the abnormal weak margin in 3Q14 is due to the usage of high calorific coal in 3Q14 (as the Tuban 1 plant was still under warranty by the contractors, hence the contractors asked that Tuban 1 used high calorific coal instead of medium calorific coal). In 3Q14, increase in operating expense is mainly contributed by 25% increase in salary cost. SMCB’s 9M14 NPAT of Rp570bn, down by 5% YoY, is only 50% of FY14F consensus forecast.
Remains at high net gearing. As of 9M14, SMCB net gearing stand at 59%. SMCB’s net gearing remains high compared to its peers (SMGR and INTP).
Maintain Neutral. We maintain our Neutral stance for SMCB with PT of Rp2,700. Post the weak result, we think consensus would likely to revise down its forecast. We are reviewing our numbers for SMCB.

October 31, 2014

SGRO: Production Whip

Stellar 9M14 result

Sampoerna Agro (SGRO) reported a stellar result with a jump in revenue and operating profit by 72% yoy and 352% yoy to Rp2.4 tn and Rp505 bn, respectively in 9M14. A combination of higher sales contribution from CPO and PK totaling to Rp2.3 tn as well as significant yoy margins expansion has driven ten-fold jump in net profit from Rp30 bn  in 9M13 to Rp320 bn in 9M14. This came above our expectation, representing 86% of our FY14 estimate. Another positive catalyst came from higher ASP, which rose by 29% yoy to Rp8,528/kg from Rp6,612/kg. Moreover, PK and germinated seed ASP also climbed by 65% yoy and 7% yoy. However, this increase was due to low base effect in previous year. SGRO’s estates also saw improvement in FFB production both for nucleus and external purchase, coupled with extraction rate that begets 5-year high in its historical OER at 21.7%.


Maintain BUY rating on lower TP at Rp2,400/sh

We reduced our TP for SGRO from Rp2,700/sh to Rp2,400/sh but maintain BUY recommendation. We lowered our CPO price forecast for 15F-16F to RM2,400/MT-RM2,500/MT. It indicates moderate recovery of CPO price outlook from current level. Our new TP of Rp2,400 implies PER15F 8.7x and EV/EBITDA of 5.4x, suggesting a 14% upside potential from current price of Rp2,100/sh.

October 31, 2014

FREN highlights that it is not merging with BTEL, even though both groups are planning to consolidate their telecom network by the end of this year

Smartfren (FREN) highlights that it is not merging with Bakrie Telecom (BTEL), even though both groups are planning to consolidate their telecom network by the end of this year. Smartfren also highlights that it will not settled Bakrie Telecom’s debt. Smartfren is planning to use its 850 MHz and 2300 MHz frequency to roll out LTE. The govt recently required Smartfren to switch its frequency from 1900 MHz to 2300 MHz.

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October 31, 2014

SIDO: SIDO 3Q14: Lower-than-expected earnings, cut to HOLD

§ Disappointing 3Q14 results on energy drink sales contraction: SIDO booked 3Q14 net revenue of IDR474bn, down 20.9% q-q and 21.5% y-y, resulting in 9M14 revenue of IDR1,594bn, down 8.5% y-y, well below our and consensus’ estimates (9M13: 74.6%).
§ Margin pressure on higher raw material costs and currency: SIDO booked 9M14 gross margin of 35.2%, down 370 bps y-y, mainly stemming from lower margin herbal medicine (Tolak Angin brand) which was down 1,062bps to just 53.7% (9M13: 64.3%). Additionally, its energy drink’s (Kuku Bima) gross margin dropped 306bps to 16.5% (9M13: 19.6%). Some of the key raw materials of Tolak Angin are handpicked from the wild and scarce, resulting in significantly higher acquisition costs. As for the energy drink segment, note that 90% of Kuku Bima’s raw materials are imported (mostly in USD). Thus, the 5% ASP adjustment in 1H14 was not enough to offset the IDR depreciation against the USD. Since, SIDO faces tight competition from KLBF’s energy drink (Extra Joss), further ASP increases are unlikely as even with a 5% ASP increase, SIDO has seen its energy drink sales drop by 23%.
§ Recent acquisition of Berlico Farma: SIDO recently acquired 100% of Berlico Farma for IDR125bn. Most of Berlico’s products, cough and cold syrup (Anacetine), anti-acid medicine (Berlosid) and traditional baby oil (Minyak Cap Tiga Anak) (exhibit 8), are used in general healthcare clinics (Puskesmas). Note that all members of the national healthcare program (BPJS-Kesehatan) are required to go to Puskesmas before seeing a doctor. As Berlico’s products are widely sold in Puskesmas, pharmaceutical products should be the next growth driver.

Outlook & Recommendation: Gross margin under pressure, HOLD
SIDO has cut operating expenses through lower A&P costs (9M14 A&P fell 40.6% y-y, at 6.18% of sales), while its high cash position has led to high interest income of IDR87bn. However, going forward, wild handpicked raw materials should be scarcer, resulting in gross margin pressure. Hence, we have lowered our 2014-16F EPS by 5-20%, and our TP from IDR770 to IDR700, based on a 23.9x 2015F PER (10% discount to the sector on unattractive growth potential; see exhibit 6). We downgrade SIDO from BUY to HOLD on 2% upside potential to our new TP. Risks relate to lower or higher-than-expected costs of raw materials and Berlico’s performance.

October 31, 2014

ELTY sold Bukit Jonggol and fully own Jungleland

ELTY has sold the rest of its stakes in PT Bukit Jonggol Asri for Rp1.5tn to BKSL and PT Gili Tirta Anugrah (GTA) for Rp1.5tn. 15% of the stake was sold to BKSL for Rp700bn and the rest to GTA. ELTY also has fully bought PT Jungleland Asia from both BKSL and BJA for Rp500bn.

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October 31, 2014

JRPT: In-line 9M14 result 75% to our expectation

In-line 9M14 result. JRPT recorded Rp529bn NPAT in-line with our expectations (75% to our expectation). Gross margin remained high and showed healthy growth resulting to margin increases all the way to the net level. We believe that JRPT recorded more commercial land sales this year than we expect which resulted to the company’s gross margin level of 59% in 9M14.
Clean balance sheet. Sales advances remained flat at Rp2.7tn in 9M14 vs Rp2.7tn in FY13. JRPT’s balance sheet is still clean with no debt.
Maintain Buy. As of 9M14, marketing sales was recorded at Rp1.3tn which is around 62% to the company’s full year target. We believe that with limited project launchings in 4Q14, JRPT will need to rely on commercial land sales towards the end of the year to meet its target. We still like JRPT as it still delivers solid performance during the year. Maintain Buyon JRPT at TP Rp1,130. The counter is currently trading at 64% discount to NAV.

October 31, 2014

ICBP: ICBP above expectation

„Strong 9M14 results, above expectation. ICBP booked stronger than expected 9M14 NPAT of Rp2,065bn (+11.4%YoY), comprising 79% of consensus and 90% ours. This is mainly due to faster than expected margin recovery at gross level and lower than expected A&P spending during 3Q14.
Margin expansion in 3Q14. ICBP witnessed strong EBIT margin recovery at 11.6% vs 9.8% in 2Q14 partially thanks to 5% ASP hike on instant noodle in July 2014 plus some new premium product launches during Ramadan season.
On top of that we also suspect A&P spending during 3Q14 remain below budget of 4.5% of FY14F sales. Please beware that we see more advertising and promotion activities during 4Q14 especially relates to the beverage business including “Ichi Ocha” and “Cafela” brands which could should lead A&P spending spike in 4Q14.
Currently we have Neutral rating on ICBP. ICBP now is trading at 28.0x – 25.1x P/E14F-15F

October 31, 2014

INDF: 9M14 results: INDF In-line

9M14 results in-line. INDF booked 9M14 NPAT of Rp3,029bn (+57%YoY), within expectation comprising 72% of consensus and 75% our full year forecasts. 9M14 sales grew by 22.1%YoY up to Rp50,393bn mainly driven by strong Indofood CBP (ICBP)sales growth of 21.2%YoY followed by Agribusiness of 10.6%YoY and Bogasari of 7.5%YoY.
3Q14 margin slightly declined. INDF booked slightly lower 3Q14 EBIT margin at 12.3% vs 12.7% in 2Q14 mainly due to lower margin from the agribusiness, Bogasari and China Minzhong. However, INDF’s 3Q14 EBIT still grew strongly up to Rp2,022bn (+28.8%YoY, -10.9%QoQ).
China Minzhong: seasonally weak sales, yet bottom line improved. China Minzhong booked 1QFY15 Net profit of RMB57.4mn (+18.7%YoY) with net margin improved by 4.2ppt on lower marketing and advertising expenses. While revenue declined by 23.6%YoY mainly due to seasonally weaker sales from processed and cultivation segment but partially offset by sales increase in the branded segment.
We still have Buy rating on INDF. INDF now is trading attractively at 14.3x – 11.1x P/E14F-15F. Further detail will be discussed on analyst briefing today at 10 am at Indofood office.

October 31, 2014

SCMA: Weak 9M14 result 63% to ours and 65% to consensus’ estimates

„Weak 9M14 result. SCMA reported weak 9M14 NPAT of Rp1.1tn which is 63% to ours and 65% to consensus’ estimates. The weak result was mainly due to the UNVR negotiation that occurred during the quarter as we previously mentioned.
Slower revenue growth at 14% YoY. On a YoY basis, revenue growth is weaker in 9M14 at 14% vs. 19% in 1H14. The company noted that it should have been able to book 20% YoY revenue growth as SCTV has went up and beat RCTI in terms of audience shares and Indosiar have ranked at least number 4 in the audience shares rank. However, due to the negotiation with UNVR on the rate card, SCMA did not book any revenue at all from UNVR for two full weeks in August. Thus, explaining the 21% QoQ revenue decline in 3Q14. We suspect the QoQ margin decline was also due to the Barclays Premiere League on top of the UNVR issue.
Lower opex, helped operating margin. In 9M14, SCMA’s opex is only 16% of revenue vs. 19% in 9M13 due to lower salary cost. The lower opex helped SCMA’s operating margin to remain flat YoY. Pretax margin declined due to lower other operating income.
Maintain Buy. We believe that SCMA’s revenue should rebound in 4Q14 due to the holiday season. Moreover, UNVR has already started paying SCMA higher CPRP rate card which will also apply in 4Q14. The company is still in negotiation with UNVR to switch its advertisement sales method from CPRP to retail basis. SCMA, in our view, should still perform well in FY15F due to its strong audience shares performance this year which should translate to higher revenue going

October 31, 2014

GZCO pada 3Q14 meraih kenaikan penjualan bersih menjadi Rp365,5M dari sebelumnya Rp264,6M

PT Gozco Plantations(GZCO) pada 3Q14 meraih kenaikan penjualan bersih menjadi Rp365,5M dari sebelumnya Rp264,6M. Laba sebelum pajak mencapai Rp31,4M naik tajam dari laba sebelum pajak tahun sebelumnya yang Rp3,6M. Laba naik menjadi Rp26M dari sebelumnya Rp14,4M.

October 31, 2014

BBNI: 9M14 results – in line with expectations

BBNI recorded Rp7.6tr in 9M14, +16% y-y, and this accounted for 77% of consensus’ and 75% of our full year expectations. The results were supported by 14% y-y loan growth, 6.2% NIM and controlled operating expenses.
Of the 14% y-y loan growth, medium loans (Rp10-150bn) posted the highest rate of 38% y-y (they account for 14% of total loans), followed by subsidiaries (sharia loans) at 33% y-y (5% of total loans) while corporate loans, including international loans (more than Rp150bn), increased 17% y-y (48% of total loans). Deposit growth, which grew strong in June, slowed down to 12% y-y and this increased BBNI’s LDR to 87% in September from 82% in June. There was a reversion of time deposits again in 3Q14 towards CASA, which now account for 61% of total deposits compared to 60% in June 2015.
NIM improved to 6.23% in 9M14 but on the quarterly basis, it declined from 6.36% in 2Q14 to 6.23% in 3Q14 on the back of steeper increase in deposit rates, in particular time deposits, which account for 39% of total deposits. This level is likely to improve slightly in 4Q14 if banks implement the deposit rate cap set by the authority in full. Non-interest income increased 8% y-y in 9M14. It would have been higher as BBNI recorded high foreign exchange gain in 2013 when the rupiah depreciated 26%. While net interest income increased 19% y-y, the operating income (net interest income plus non-interest income) only increased 15% y-y in 9M14.
Asset quality was stable. A significant increase was seen in provisioning charges, which went up 35% y-y in 9M14 and 46% y-y in 3Q134. The NPL level was kept at 2.2% after they wrote off another Rp713bn of bad debt in 3Q14 (total write off Rp2.5tr in 9M14). Recovery of the previously written off NPL, which average 70% in the past three years, is now running at 53% due to the weakening economic growth. On segmental basis, small and consumer loans continued to see deteriorating quality with NPL of 5.6% and 1.7% in September from 5.1% and 1.5% in June. Pre NPL loans (special mention, category 2) increased to 3.6% in September from 3.4% in June, mainly from corporate clients for which they expect to return to category 1 again this quarter. Coverage ratio remained stable high at 122%.
Operating cost control. Cost to income ratio was stable at 47% in 9M14 with personnel costs rose 5% y-y and other G &A was up 20% y-y.
Maintain Neutral with TP of Rp5,500. At Rp5,800 the counter has outperformed the market by 31% YTD and is trading at 1.6x P/BV 2015.

October 31, 2014

BBNI mencatat laba bersih pada 3Q14 sebesar Rp7,6T tumbuh 16,4% (yoy)

PT Bank Negara Indonesia (BBNI) mencatat laba bersih pada 3Q14 sebesar Rp7,6T tumbuh 16,4% (yoy). Pendapatan operasional mencapai Rp24T atau tumbuh 13,0% di mana sekitar Rp16,4T dikontribusi dari pendapatan bunga bersih (net interest income/ NII) yang meningkat 18,6%.Net NPL turun dari 0,6% menjadi 0,5% sedangkan Gross NPL turun dari 2,4% menjadi 2,2%.

October 31, 2014

BBCA: 9M14 results – in line

BBCA posted 18% increase in net profit to Rp12.2tr in 9M14, representing 78% of our and 75% of the market’s full year expectations. 3Q14 saw an 8% y-y net profit increase to Rp4.34tr. The results were supported by strong margin and marginal increase in provisioning charges despite the rising NPL.
Loan growth was 11%, supported by corporate loans at 14% y-y and commercial & SME loans at 12% y-y while consumer loans grew at only 5% y-y. Of the consumer loans, mortgage, which account for 59% of total consumer loans, grew a mere 1% y-y on the back of higher lending rate and LTV regulation. With deposit growth of 8% y-y (mostly from time deposits which increased 31% y-y) BBCA’s LDR was still at 77%, slightly below the minimum 78% asked by the regulator.
NIM improved to 7bps to 6.87% in 3Q14. While the bank increased its time deposit rates in 3Q they were also adjusting lending rates in stages. Time deposits only account for 24% of total deposits and hence BBCA was able to further improve its NIM in the quarter under review. On the cumulative basis, NIM improved to 6.83% in 9M14 from 6.26% in 9M13.
Asset quality deteriorated but still one of the lowest in the industry. NPL increased to 0.66% in September from 0.50% in June, in particular this came from one debtor in corporate loans (NPL in this segment increased to 0.4% from 0.1%), amounting to Rp380bn (0.1% of total loans), which turned NPL again after their loans were restructured five years ago. While provisioning charges surged 63% q-q in 3Q14, cumulative provisioning charges only increased 4% y-y in 9M14 and coverage ratio remained high at 291%. At the pre-provisioning level, operating profit still increased 22% in 9M14.
Efficiency ratio still under control. Despite low cost to income ratio of 40% in 3Q14, the ratio increased to 44% in 9M14 but this is still below the industry level. This helped BBCA to post 24% ROE in 3Q14 and 23.5% in 9M14.
Going forward, BBCA expects loan growth expected at 12% maximum and to support this they had lowered their mortgage rates by 50bps recently in order to maintain its position in the market. The bank indicated that their run-off on the mortgage lending is Rp1.2tr a month hence they have to book new mortgage higher than this in order to see positive growth in the outstanding mortgage.
Maintain Neutral. The counter is trading at 3.4x P/BV 2015 and has outperformed the market by 16% YTD. We are likely to increase our current TP of Rp11,000 towards Rp13,000-14,000.

October 31, 2014

BBCA pada 3Q14 meraih pendapatan bunga bersih dan pendapatan operasional lainnya tumbuh 23% (yoy) menjadi Rp30T

PT Bank Central Asia (BBCA) pada 3Q14 meraih pendapatan bunga bersih dan pendapatan operasional lainnya tumbuh 23% (yoy) menjadi Rp30T. Marjin Bunga Bersih (NIM) naik 50 bps menjadi 6,5%. Laba bersih tumbuh 17,7% (yoy) menjadi Rp 12,2T.

October 31, 2014

ASII pada 3Q14 membukukan laba Rp14,5T atau naik dibandingkan periode yang sama tahun 2013 sebesar Rp13,5T

PT Astra International (ASII) pada 3Q14 membukukan laba Rp14,5T atau naik dibandingkan periode yang sama tahun 2013 sebesar Rp13,5T. Pendapatan bersih mencapai Rp151T dibanding dengan sebelumnya yang mencapai Rp142T. EPS naik menjadi Rp358 dari sebelumnya Rp333/saham.

October 31, 2014

SIDO: 9M14 results below expectation

Sido Muncul reported 9M14 net profit of Rp314bn (+ 4%yoy) with 3Q14 net profit of Rp75bn (-42%yoy,-39%qoq), translated to 68% of our estimation. Specifically, SIDO recorded top line of Rp1.59tr (-9%yoy) and EBIT of Rp312bn (-3%yoy) which accounted to 60% and 53% of our estimation, respectively.
Gross margin declined to 35.2% in 9M14 from 38.9% last year, however improved to 35.8% in 3Q14 from 32.6% in 2Q14 considering sharp increase in herbal medicine contribution. EBIT margin however decline to 14.6% in 3Q14 from 20.5% in 2Q14 due to significant increase in advertisement and promotion expenses by +65%qoq.
The worst performance came from energy drink segment whereby sales declined -23%yoy in 9M14 and -50%qoq in 3Q14 due to continuous reduction in Kuku Bima market share and the shifting demand towards ready-to-drink (RTD) products. Conjointly the management indicating a delay in the launching of new Kuku Bima RTD pending National Agency of Drug and Food Control’s (BPOM) approval from initial schedule in September 2014. Consequently gross margin plunged to mere 6.9% in 3Q14 from 17.3% in 2Q14 and 3Q13. Meanwhile energy drink segment contribution to revenue declined to 28% in 3Q14 from 44% in 2Q14.
Herbal medicine’s sales grew by 7%yoy in 9M14 and 2%qoq in 3Q14, translating into higher Tolak Angin revenue contribution to 56% in 3Q14 from 44% in 2Q14.
Furthermore SIDO has added new pharma segment following recent acquisition on PT Berlico Mulia Farma with contribution to revenue remained small <0.5%.
We are reviewing our numbers on SIDO. The counter is trading at 18.7x P/E 2015F.

October 31, 2014

SMRA: Inline 9M14 result

In-line 9M14 result. As of 9M14, SMRA booked NPAT of Rp876bn, flat on YoY basis. SMRA’s 9M14 NPAT is in-line with ours and consensus, comprising of 77% of our estimate and 75% of consensus. Gross margin on its property development is up to 60% in 9M14 versus 58% in 9M13. However gross margin on recurring income is down from 46% in 9M13 to 43% in 9M13, which we suspect partly due to the commencement of Summarecon Bekasi (opened in June-13).

The company reported a solid 3Q14, with NPAT up by 24% YoY and 25% QoQ to Rp334bn.
Standing at 34% net gearing as of 9M14. Massive ongoing investment capex in FY14F-14 is Movenpick Resort in Bali (around Rp480bn) and Summarecon Tower for Rp900bn. The company also still doing landbanking in Summarecon Bandung. SMRA’s land for development is up by Rp1.1tn to Rp4.0tn in 3Q14.
Maintain Buy with PT of RP1,550. We maintain our Buy rating for SMRA with PT of Rp1,550. The stock is currently trading at 60% discount to NAV and FY15F P/E of 12.7x. We remain confident that SMRA would be able to reach its Rp4.5tn marketing sales target. Including Kensington launch, the company has accomplished 85% of its marketing sales target (Rp3.8tn out of Rp4.5tn). The company is currently launching Serpong Midtown apartment. Price per unit varies from Rp330mn-Rp725mn for Bryant tower (ASP at Rp13mn per sqm) and Rp760mn-Rp1.7bn for Herald tower (ASP at Rp20mn per sqm).

October 31, 2014

BSDE: All’s Well Ends Well

BSDE reported strong 9M14 NPAT, comprising of 110% of consensus forecast and 91% of ours. We see margin improvement in 3Q14, on better revenue mix and operating leverage. Maintain Buy on BSDE with PT of Rp2,000.
Strong 3Q14 performance. BSDE posted NPAT of Rp342bn and operating profit of Rp742bn in 3Q14, up by 4% YoY and 39% YoY, respectively. BSDE posted strong 9M14 NPAT of Rp3.2tn, comprising of 91% of ours and 110% of consensus estimates, better than expectations. BSDE’s strong earning in 9M14 is on the back of Rp1.6tn gain from purchase of PLIN shares. On operating profit level, BSDE was in-line, comprising of 72-75% of our FY14F estimate.
Margin improvement is seen. BSDE’s operating margin improves on QoQ level to 50% in 3Q14 compared to 46% in 2Q14, on higher revenue bookings in 3Q14 (up by 27% QoQ to Rp1.5tn). Gross margin on 3Q14 expands on QoQ basis from 77% to 79% on better revenue mix. Land sale is up by 63% QoQ in 3Q14 and now comprises of 49% of total revenue versus 38% in 2Q14. We forecast the company’s gross margin to remain high, at c. 70% in FY15F.
Solid balance sheet. BSDE’s balance sheet remains healthy, as the company’s net gearing is at 1% as of 9M14. Sales advance from customers has improved to Rp3.9tn in 3Q14 vs. Rp3.7tn in 4Q13. Net cash generated from operations declined on YoY level to Rp1.5tn, however this is a trend on all property companies due to the LTV rule implemented in 4Q13.
Maintain Buy with PT of Rp2,000. We maintain our Buy rating on BSDE with PT of Rp2,000 (based on 50% discount to NAV). The company is currently trading at 61% discount to NAV and FY15F P/E of 11.8x. We continue to like BSDE, as the company has the strongest marketing sales achievement as of 9M14 (83% of FY14F target of Rp6.0tn). With firm pipeline of projects (Rasuna Epicentrum, Manado, Samarinda, Taman Permata Buana apartment), we forecast BSDE should able to grow its marketing sales at least by 10% in FY15F.

October 31, 2014

Hedging rule: managing, not squeezing

Bank Indonesia issued hedging regulation for non-bank private external debt. Yesterday, the central bank issued Bank Indonesia Regulation No.16/20/PBI/2014 about the implementation of prudential principles to managing non-bank external debt. The regulation will be effective starting 1 Jan15. The purpose of the regulation is to mitigate external debt risks in terms of currency, liquidity, and over-leveraging on non-bank companies amid global economic uncertainties ahead. Therefore, the central bank sets specific requirements that non-banking companies
should fulfill. The requirements are hedging ratio, liquidity ratio and credit rating standard. For information: i.) Hedging ratio: the ratio of hedging value from the negative difference between FX asset to FX liability maturing in less than 3 months and in between 3-6 months. The rule does not apply for companies that have greater FX asset than FX liability. ii.) Liquidity ratio: the ratio between FX assets with less than 3 months maturity against FX liability with less than 3 months maturity.
It will be implemented into two phases. BI plans to raise its prudential bar gradually. The first phase starts in Jan-Dec15 and the central bank will ascend the prudential bar in the second phase, starting 2016 (please see the details below). Several types of external debt are exempted from the regulation such as trade credit. Furthermore, bilateral/multilateral debt that is used for infrastructure and refinancing purpose are exempted from credit rating provision.

„How big is the non-banking external debt pie? The outstanding of non-banking external debt reached US$127bn in Aug14, sharing 81.3% and 43.7% of private external debt and total external debt, respectively. So, it is significant. Fortunately, 81% of the outstanding of non-banking external debt maturity is longer than 1 year while 75% of total private debt is either naturally hedged or already covered by hedging (22% is owned by exporters, 17% by dollar earners, 36% has done hedging activity).

„No financial sanction: could the regulation still be effective? BI does not plan to implement a financial fine if companies break the regulation. It will only implement administrative warning to the company and its respective clients including foreign correspondence, the Ministry of SOE, the Ministry of Finance, Financial Services Authority, and Indonesia Stock Exchange, starting 3Q15 report. However, we still believe the regulation would be effective as companies not obeying the rule could experience higher premium risk on their financing in the future.
Limited impact on economic financing. As the regulation aims to induce hedging rather than capping foreign borrowing, we think the impact to economic growth will be limited. Until this moment, banking credit remains as the dominant alternative financing for the economy. It shares 35% of the GDP whereas private external debt holds around 18% of the GDP. Nevertheless, we believe that several sectors – with limited access to FX asset (such as rupiah earner) and high FX leverage – will be impacted by the regulation in the short term. Looking at this, we think the most impacted sectors are property, electricity, and manufacturing

Deepening the FX market. Besides managing external risk, the regulation is also expected to turn on the forward, spot, and option markets next year, all of which have been so long desolated. Based on the data of Indonesia’s Foreign Exchange Market Committee (FEMC), the average daily FX transaction is around US$5bn with 67% of it (US$3.4bn) concentrated in the spot market. Meanwhile, the other 28%, 4%, and 1% are transacted through swap, forward and other instruments, respectively. Unfortunately, the data up to 6mo maturing debt is not publicly available, so it is hard to see the short-term impact to FX demand. We do not expect a significant jump off of FX demand as Bank Indonesia has provided a time lag for the creditors to gradually hedge their position before the sanction is fully implemented in 3Q15.

Good for the rupiah stability in the medium and long term. The rupiah should be more stable in the medium term. One of the issues for high rupiah volatility recently is companies’ sudden and sporadic FX demand in the spot market due to rising exchange rate risk. By activating the forward, swap and option markets, we believe companies’ FX volatility will be much smoother. Their exchange rate risk will be lower due to the hedging activity, resulting to a more stable rupiah in the medium term.

WTON: Slower 3Q14 Results

WTON 9M14 earnings rose 15% YoY to IDR223.35bn but 3Q14 net profit fell2.5% YoY to IDR57.2bn on uncertainties during the presidential election and inauguration period, and the weakening IDR that caused higher raw materials cost. Post new IDR12,300/USD guidance, we downgrade to NEUTRAL (from Buy) and cut FY15Fearnings by 11.7%, which results in a new IDR1,135 TP, a 1.3% downside, that reflects 28.38x FY15F P/E.

¨ Results relatively in line. Wijaya Karya Beton’s (Wika Beton) 9M14 net income came in line and made up 72%/71% of our/consensus full-year estimates respectively. Although revenue grew by 13.8% YoY, it was still slightly below expectations, ie making up only 69%/69% of our/consensus FY14 forecasts respectively. Precast concrete piles remained the largest revenue contributor, accounting for 65% of topline.
¨ Slower 3Q14 performance. In 3Q14, on a YoY basis, Wika Beton’s earnings declined 2.5% YoY while revenue managed to rise 14.5% YoY to IDR644bn. However, on a QoQ basis, revenue and earnings declined This was due to several factors, namely: i) higher input costs due to the weak IDR, ii) fewer working days due to the Muslim festive season, and iii) higher opex for personnel allowances during the Lebaran period. These factors also contributed to a 566bps YoY decline in 3Q14 EBIT margin to 9.6%. This resulted in an 8.88% net margin, ie a 155bps YoY drop.
¨ 9M14 new contracts of IDR1.6trn. Wika Beton only secured IDR300bn in additional contracts since 2Q14. This reflects project owners’ uncertainties during political transition times. Nonetheless, we believe there will be better clarity ahead, starting in the coming quarter, and the fact that the disbursement of most government projects is usually in 4Q. Along with the groundbreaking of some mega infrastructure project like Jakarta’s giant sea wall, the company may have a chance of realising its FY14 new contract target of IDR3.2trn.
¨ Cut FY15F earnings on IDR revision, downgrade to NEUTRAL. We maintain our FY14/FY15 revenue projections but, due to the adjustment on new currency guidance of IDR12,300/USD in 2015, we lower our FY15 earnings forecast by 11.7%. As a result, we derive a lower DCF based TP IDR1,135 (from IDR1,260), reflecting 28.38x FY15F P/E.

October 31, 2014

Rekap Laba (-Rugi) Emiten 9M14 vs 9M13


Rekap Laba (-Rugi) Emiten 9M14 vs 9M13:

• BBRI Rp18,16t vs Rp15,44t
• BMRI Rp14,45t vs Rp12,80t
• BBTN Rp0,75t vs Rp1,06t
• PNBN Rp2,03t vs Rp1,77t
• BTPN Rp1,42t vs Rp1,67t
• BNII Rp0,34t vs Rp1,09t
• BABP -Rp19,65m vs Rp3,43m
• JSMR Rp1,14t vs Rp1,02t
• TLKM Rp11,45t vs Rp11,06t
• UNVR Rp4,05t vs Rp4,09t
• APLN Rp506m vs Rp597m
• LRNA Rp1,98m vs n/a

• EXCL -Rp901m vs Rp917m
• MEDC $9,51jt vs $10,00jt
• ASGR Rp174m vs Rp131m
• INAF -Rp35,7m vs -Rp61,2m
• AUTO Rp643m vs Rp638m
• KKGI $7,97jt vs $18,04jt
• AALI Rp1,88t vs Rp0,91t
• BJBR Rp0,71t vs Rp1,09t
• BJTM Rp743m vs Rp681m
• SMDR $12,8jt vs $0,02jt
• MDLN Rp538m vs Rp722m
• LPPF Rp1,06t vs Rp0,89t

• LSIP Rp698m vs Rp443m
• SIMP Rp557m vs Rp171m
• SGRO Rp311m vs Rp30m
• PTPP Rp290m vs Rp218m
• WTON Rp223m vs Rp194m
• BSDE Rp3,21t vs Rp2,15t
• DUTI Rp478m vs Rp563m
• TINS Rp328m vs Rp141m

• WSKT Rp129m vs Rp118m
• DGIK Rp54,6m vs Rp46,5m
• DYAN Rp25m vs Rp35m
• TURI Rp187m vs Rp223m
• DSFI Rp5,05m vs Rp6,28m
• MTLA Rp184m vs Rp165m

• SMGR Rp4,09t vs Rp3,90t
• PTBA Rp1,58t vs Rp1,24t
• SIDO Rp314m vs Rp303m
• DOID $16.7jt vs -$13.3jt   

• INDF Rp3,03t vs Rp1,92t
• ICBP Rp2,07t vs Rp1,85t
• ASII Rp14,5t vs Rp13,5t
• UNTR Rp4,77t vs Rp3,38t
• HEXA $7,75jt vs $12,17jt
• ADRO $220jt vs $316jt
• SCMA Rp1,10t vs Rp0,97t
• SMRA Rp883m vs Rp879m
• ELTY Rp210m vs Rp757m
• COWL Rp15,0m vs Rp34,8m
• SMCB Rp569m vs Rp599m
• SAME Rp41,9m vs Rp30,6m
• SILO Rp54,3m vs Rp20,1m
• WIIM Rp80,0m vs Rp110,8m
• SRIL Rp265m vs Rp250m
• TRAM $4,54jt vs $8,87jt
• RUIS Rp26,2m vs Rp21,2m
• MSKY -Rp28,0m vs -Rp223m
• MASA $1,23jt vs $1,27jt
• BBKP Rp675m vs Rp734m
• GZCO Rp26,7m vs Rp15,8m
• MYOH Rp215m vs Rp136m


October 31, 2014

Samuel Economic Research 31 October 2014

Global News

·    GDP AS 3Q14 melambat pertumbuhannya ke 3.5% YoY dari 4.6% YoY tetapi lebih tinggi dari ekspektasi yang 3% YoY.(Bloomberg)
·    Personal consumption AS melambat pertumbuhannya ke 1.8% dari 2.5%. (Bloomberg)
·    Initial jobless claims AS naik ke 287k dari 284k. (Bloomberg)
·    Inflasi Jepang melambat ke 3.2% YoY dari 3.3% YoY.(Bloomberg)
·    Consumer confidence Zona Euro bertahan di -11. (Bloomberg)

Domestic News

·    PT Pertamina memperkirakan konsumsi BBM bersubsidi bakal berlebih 1.9mn KL sampai 31 Desember 2014 dari kuota APBN Perubahan sebesar 46mn KL. (Antara)
·    Pemerintah cenderung memilih calon internal sebagai direktur utama PT Pertamina. (Bisnis Indonesia)
·    Bank Indonesia akhirnya merilis aturan rasio pengelolaan utang luar negeri korporasi swasta nonbank untuk mengamankan posisi ULN negara. (Bisnis Indonesia)
·    Uang bantuan langsung sementara masyarakat (BLSM) untuk 20 juta rumah tangga miskin akan dikirim ke e-money masing-masing ponsel penerima.(Kontan)


GDP AS cukup baik, dollar index kembali naik. Walaupun melambat dari angka 2Q14, GDP AS 3Q14 diumumkan lebih baik dari perkiraan. Dengan consumer confidence Zona Euro yang masih negatif, dollar index kembali mendapatkan momentum untuk menguat hingga ke atas 86 dini hari tadi. Yield Bund10y yang turun drastis ke 0.85% memangkas yield UST10y hingga 2.31%. Sore nanti ditunggu tingkat pengangguran serta inflasi Zona Euro, keduanya diperkirakan stabil.

Dollar kuat di Asia, rupiah melemah. Hasil FOMC meetingmembawa penguatan dollar hingga ke Asia kemarin. Hampir seluruh mata uang di Asia melemah terhadap dollar. Rupiah melemah bersamaan dengan aksi jual di pasar saham. SUN juga mengalami kenaikan yield hampir pada seluruh tenor walaupun hanya tipis. 

October 31, 2014

CPGT :Cipaganti berencana akusisi operator jalan tol

Masuknya perusahaan milik William Chongbian, Terra Investment Holding Ltd sebagai pemegang saham mayoritas PT Cipaganti Citra Graha Tbk akan membawa angin segar bagi keberlangsungan bisnis perusahaan asal Bandung ini. Kini perusahaan yang bergerak di bidang transportasi itu tengah mempersiapkan diri untuk melebarkan sayap ke lini bisnis jalan tol.

“Rencananya dalam waktu dekat akan mulai coba masuk penyertaan modal ke bisnis lain yaitu teknologi pembangunan infrastruktur khususnya peralatan dalam bidang IT,” ungkap Jofial Mecca Alwis, Direktur Komunikasi Korporasi PT Cipaganti Citra Graha, Kamis (30/10).

Meski berniat masuk ke bisnis jalan tol, tetapi Jofial menampik kalau kedepannya perusahaannya juga akan ikut menggarap pekerjaan konstruksinya. Kata dia, perseroan hanya akan mengembangkan penggunaan teknologi dalam pengoperasian jalan tol. Rencananya ekspansi bisnis ini akan dilakukan dengan mengakuisisi perusahaan operator jalan tol yang ada.

October 31, 2014

NICKEL : • Harga Nikel Akan Makin Terkerek

PEKAN ini, para pedagang mineral nikel dikejutkan oleh berita dari Shanghai Metals Market, yang menyatakan bahwa stok nikel di lima pelabuhan utama, yakni Tianjin, Rizhao, Lanshan, Lianyungang, dan Jingtang, akan habis mulai April tahun depan.

Cadangan di lima kora pelabuhan itu mancapai 70% dari total stok yang ada, sebanyak 15,3 juta pada Oktober ini. Angka ini turun 17% dibanding awal tahun.

Mencuatnya berita menipisnya stok nikel membuat harga nikel naik 5% pada Selasa, dan 2% pada Rabu kemarin, sehingga nikel diperdagangkan pada US$ 15.895 tiap ton.

Dari sisi permintaan, mineral nikel tampaknya akan masuk masa cerah. Lembaga riset Capital Economics menyatakan, produksi baja tahan karat (stainless steel), yang merupakan 65% dari total konsumsi dunia, tampaknya akan naik.

Produksi baja stainless di Amerika Serikat naik 16% selama semester pertama tahun ini. Adapun produksi Cina naik 17%. Sedang produksi dari negara-negara Uni Eropa diperkirakan bertambah 4%.

Harga nikel akan naik lagi, didorong oleh rencana Filipina mengikuti jejak Indonesia melarang ekspor mineral mentah. Lembaga riset Capital Economics meramal, harga nikel mencapai US$ 21.000 tahun depan. Citibank meramal lebih tinggi lagi: $24.000-$30.000. Sedang Scotiabank peramal harga nikel mencapai $23.700 pada 2015, dan menjadi $26.500 setelah itu.

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October 31, 2014

SAMINDO RESOURCES (MYOH) Cetak Laba Bersih Rp215,48 Miliar di Kuartal III/2014

Samindo Resources Tbk. (MYOH) berhasil mencetak kenaikan laba bersih 58,63% menjadi Rp215,48 miliar dibandingkan dengan periode yang sama tahun lalu Rp135,84 miliar.

Kenaikan laba bersih tersebut sejalan dengan pendapatan yang mencapai Rp2,26 atau naik 58,63% dibandingkan dengan pendapatan pada periode yang sama tahun lalu senilai Rp1,74 miliar.

MYOH juga berhasil meningkatkan volume produksi batu bara mereka menjadi 6,8 juta ton atau naik 28,1% dibandingkan periode Januari-September tahun lalu.

Selain itu, Corporate Secretary Samindo Hananta Wibowo mengungkapkan depresiasi rupiah belakangan ini telah memberikan keuntungan bagi perseroan.

October 31, 2014

TINS : Ciamik, TINS bukukan pertumbuhan laba 141%

PT Timah Tbk (TINS) mencatat kinerja kinclong di akhir September 2014. Kenaikan produksi, penjualan, dan efisiensi telah mendorong produsen timah ini melompat.

Pada Januari-September 2014, laba bersih TINS tercatat Rp 341,45 miliar, melonjak 141,34% year on year. Dari sisi pendapatan, TINS memang membukukan Rp 4,36 triliun, atau tumbuh 20,78%.

Pertumbuhan pendapatan ini diperoleh di saat TINS menerapkan strategi penjualan secara selektif. Ini terlihat dari volume penjualan logam timah TINS yang hanya naik 2,87% yoy menjadi 15.664 ton di sembilan bulan pertama tahun ini.

Padahal, produksi bijih dan logam timah TINS masin-masing tumbuh 32,47% yoy dan 15,62% yoy ke level 22.870 ton dan 18.601 ton. Strategi ini membuat harga jual rata-rata jual logam timah TINS naik meski dalam jumlah tipis, yakni sejumlah US$ 21.849 per ton dari periode sama tahun lalu yang US$ 21.318 per ton.

Agung Nugroho, Sekretaris Perusahaan TINS menyatakan, pihaknya juga melakukan efisiensi di segala bidang semisal mulai mengganti penggunaan Bahan Bakar Minyak (BM) dengan gas yang diklaim lebih efisien.

October 31, 2014

SALIM IVOMAS (SIMP): Laba Bersih Meroket Hingga 225,67%

Perusahaan perkebunan PT Salim Ivomas Pratama Tbk. membukukan laba bersih yang meroket 225,67% pada kuartal III/2014.

Direktur Utama SIMP Mark Julian Wakeford mengumumkan dalam laporan keuangan yang dipublikasikan Kamis (30/10/2014), bahwa perolehan laba bersih mencapai Rp557,3 miliar dibandingkan periode yang sama tahun lalu Rp171,1 miliar.

Emiten Group Salim itu membukukan penjualan sebesar Rp10,77 triliun per 30 September 2014 dibandingkan periode yang sama tahun lalu Rp9,53 triliun. Laba kotor tercatat mencapai Rp2,86 triliun dari sebelumnya Rp1,79 triliun.

Laba usaha tercatat melonjak menjadi Rp1,61 triliun dibandingkan sebelumnya Rp916 miliar. Laba periode berjalan SIMP tercatat melonjak menjadi Rp763,3 miliar dari sebelumnya Rp183,7 miliar.

Total aset per 30 September 2014 mengalami peningkatan menjadi Rp30,49 triliun dari sebelumnya Rp28,06 triliun per 31 Desember 2014.

October 31, 2014

Coca Cola akan investasi US$ 500 juta di Indonesia

The Coca Cola Co akan berinvestasi US$ 500 juta di bisnis minuman cola Indonesia. Dana ini disuntik setelah mendapatkan 29,4% unit Indonesia milik Coca-Cola Amatil.

Coca-Cola Amatil, asal Australia, mengatakan, franchisornya akan membantu mempercepat ekspansi produksi, pergudangan, dan infrastruktur bisnis cola di Indonesia. 

Seperti dikutip Theaustralian.com, bagi Amatil, penjualan ini membantu memangkas beban dan memperbaiki penjualan. Perusahaan yang dipimpin Managing Director Alison Watkins ini berencana mengembalikan untung bagi Amatil di tahun 2015.

“Dengan populasi lebih dari 240 juta dan perkembangan pesat kelas menengah, Indonesia merupakan kunci pertumbuhan pasar bagi CCA,” kata Watkins. Ahmet Bozer, Presiden Coca-Cola International juga yakin Indonesia mendorong pertumbuhan bisnis minuman ringan tersebut.

Rencana Amatil mengurangi beban sudah diungkapkan Agustus lalu, ketika berniat menghemat US$ 100 juta dari operasionalnya. Efisiensi kian digenjot setelah laba Amatil semester I-2014 turun hampir 16% year on year, menggenapi penurunan laba selama dua tahun terakhir.

October 31, 2014

GOLDMAN :Bursa Saham Asia Akan Reli Hingga Akhir Tahun

Meski bursa saham di seluruh Asia belakangan ini telah menguras energi para pelaku pasar, namun Goldman Sachs berpendapat, masih ada peluang untuk mengalami reli hingga akhir tahun nanti.

“Belakangan ini bursa saham regional Asia sudah mulai pulih dari penurunan dan siap tampil untuk memperbaiki disparitas yang telah terjadi,” ungkap Goldman dalam catatannya, yang dikutip CNBC, (30/10).

Goldman mencatat, ketika indeks S&P 500 pulih sekitar 95 persen dari penurunannya beberapa waktu lalu, Stoxx Europa 600 membaik 64 persen, dan Topix rebound 63 persen,� indeks MSCI Asia-Pasifik ex-Jepang (MXAPJ – indeks bursa saham Asia tidak termasuk Jepang) hanya pulih 32 persen.

Sementara itu indeks saham-saham Asia melorot 10 persen dari nilai tertingginya dibanding tahun lalu, sebelum naik hanya 3 persen. Goldman mempertahankan target akhir MXAPJ sebesar 500, lebih tinggi dari kisaran selama ini sebesar 482.�

Menurut data yang dihimpun Jefferies, selama empat pekan terakhir investor asing menarik dana sebesar US$14,6 miliar keluar dari reksa dana dan ETF di Asia-Pasifik, sementara itu investor lain merenggut sekitar US$2,39 miliar.

Goldman mengatakan, meskipun proyeksi pertumbuhan laba di kawasan hanya konservatif saja namun membantu mendukung ekuitas. “Laporan saat ini cukup baik untuk mendukung reli pemulihan hingga akhir tahun,” kata Goldman.

October 31, 2014

CPO :Bea Keluar CPO bulan November tetap 0%

Kementerian Perdagangan (Kemendag) menetapkan Bea Keluar (BK) minyak sawit mentah atau crude palm oil (CPO) untuk bulan November 0%. Hal ini tidak lain dikarenakan harga referensi yang digunakan untuk menentukan BK tersebut di bawah patokan terendah yakni sebesar US$ 750 per meterik ton (MT).

Dalam Peraturan Menteri Perdagangan (Permendag) Nomor 84/M-DAG/PER/10/2014 tentang penetapan harga patokan ekspor atas produk pertanian dan kehutanan yang dikenakan bea keluar, referensi harga CPO hanya berada dikisaran US$ 736,32 per MT.

Atas penetapan ini, maka sudah dua bulan berturut-turut pemerintah Indonesia membebaskan BK CPO tersebut. Sebelumnya, pada bulan Oktober lalu pemerintah juga membebaskan BK CPO karena harga referensinya hanya US$ 726,73 per MT.

October 31, 2014

Asian equities ended mixed on Thursday as investors reacted to the end of quantitative easing in the U.S. and the region’s latest earnings

Good morning,

Asian equities ended mixed on Thursday as investors reacted to the end of quantitative easing in the U.S. and the region’s latest earnings.

The U.S. central bank ended its historic monthly bond purchase program on Wednesday, as widely expected. However, it maintained that interest rates will remain near zero for a considerable period of time. In its accompanying policy statement, the Fed upgraded its outlook for the labor market, which some analysts take as a sign that the bank is focusing on an interest rate rise.

Dow………17195 +221.1+1.30%
Nasdaq……4556 +16.9  +0.37%
S&P 500…..1995 +12.4  +0.62%

FTSE……….6464 +9.7    +0.15%
DAX………..9115 +32     +0.35%
CAC………..4141 +30.6  +0.74%

Nikkei……15658 +104.3 +0.67%
HSI……….23702  -117.8   -0.49%
Shanghai…2391 +17.9   +0.75%
ST Times…3234  +10.3   +0.32% 

Indo10Yr. 8.1917 +0.0272+0.33%
US10Yr….2.30%   -0.02     -0.77%

VIX………14.52     -0.76     -4.16%

USD Index…86.10 +0.15  +0.18%
DJUSCL…..105.21   -0.55   -0.52%
(Dow Jones US Coal Index)
IndoCDS…148.00  +2.99  +2.06%
(5-yr INOCD5)

IDR…12139 +56.5 +0.47%(Blmbrg) 
Jisdor……12165  +3          +0.02%
Euro……..1.2617  -0.0015  -0.12%

TLKM..45.40 +0.66 +1.48%Rp2761
ARMS Plc….40.00    -1.25   -3.03%
EIDO……… 27.45    +0.17  +0.62%
EEM………. 41.97    +0.39  +0.94%

Oil………….80.95     -1.05   -1.28%
Gold ……1199.95    -12.27 -1.01%
Timah…….data menyusul
Nickel…….data menyusul 
Coal……….63.05   -0.25   -0.39%
CPO………..2286   +31    +1.37%
Corn……..374.00   -1.25   -0.33%
SoybeanOil.34.31 +0.13 +0.38%
Wheat……536.00  -2.25   -0.42%

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October 31, 2014

LPPF: 3Q14: A mixed bag

· Earnings below our estimates, but better outlook on store expansion: 3Q net profits grew 10.1% YoY, 8% below our estimates. The miss was driven by lower-than-expected revenue growth of 11.8% (3.5% below our estimates) and slightly lower-than-expected margin expansion. On the positive side, management sounded more optimistic on new store openings and raised the guidance of store additions for 2015 to 12-14 stores from 10-12 stores earlier. Additionally, management expects to open six new stores in 4Q14.

· Seasonality, store closure impacted 3Q revenue growth: LPPF shut one store in Bandung due to a fire incident. This store had annual sales of Rp70 bn and EBITDA of Rp14 bn. LPPF has booked a loss of Rp6 bn in 3Q on account of this store closure. In addition, Lebaran being earlier this year pushed two weeks of Lebaran–related sales into 2Q, which impacted 3Q sales. Nonetheless, SSSG remained steady at 9.7% (of which 2.4% was driven by volumes). Management continues to guide for double-digit SSSG for 2015.

· New store addition guidance raised: While LPPF shut one store measuring 4k sqm due to underperformance (store had Rp19 bn of sales in 9M14, with no EBITDA contribution), it is on track to open 6 new stores in 4Q14. Management also revised its guidance for new store openings in 2015 upwards to 12-14 stores from 10-12 stores earlier. Twelve of these stores are located in malls currently under construction.

· EBITDA margin improvement continues, though lower than our estimate:EBITDA margin in 3Q improved 20 bps to 20%, despite significant pressure on wage and utility cost. Overall EBITDA expansion was 30 bps below our estimate mainly due to lower-than-expected gross margins. Share of higher-margin direct purchase sale increased to 61% from 60% last year. Margins for both direct purchase and consignment sales improved during the quarter. LPPF has guided for continued improvement in margins in 2015.

· Debt prepayment continues, cash conversion cycle remains robust: LPPF continues to prepay debt and its gross debt in 3Q declined to Rp1,280 bn from Rp1650 bn in 1H14. Management expects to further prepay debt in 4Q although it did not disclose the quantum of prepayment, while it remains on track to fully pay down debt in 2015. Working capital remains robust, with cash conversion cycle remaining at -47 days.

October 31, 2014

BNGA: 3Q14 profit free falling (-60% qoq); below DB on high provision

3Q14 profit free falling (-60% qoq)
BNGA reported its 3Q14 NP of Rp343bn (-60% qoq), resulting in 9M14 NP of
Rp2.3tr (-29% yoy), which only accounts for 56% of DB14e and implies a B/S
ROAE of a mere 5.2%. The main reason for massive qoq decline is significant
jump in credit costs (CoC). Indeed, CoC has shot up to 224bps in 3Q14 (up
from 70bps in 2Q14) as NPL rose to 3.4% (+40bps qoq, +110bps yoy). Yet,
despite higher CoC, NPL coverage ratio dipped to 81% (from a high of 113% in
4Q13). We also notice special mention assets also on the rise to 4.9% (from
3.8% in 2Q14) with the outstanding special mention assets of Rp14.9tr
(+53.3% qoq). For this reason, we think high CoC is not yet over for BNGA. See
table below for details on 3Q14 results.

Operational numbers also under pressures
At operating level, 3Q14 PPOP of Rp1.4tr (-5% qoq), results in 9M14 PPOP of
Rp4.6tr (-11% yoy) which accounts for 62% of DB14e. NIM of 5.3% is flat qoq
(but down 50bps yoy) on largely higher funding costs. Although we see system
liquidity stability, we see limited rooms for NIM uplift as LDR already at 100%
(+70bps qoq; +460bps yoy).
Post results (along with other mid-to-small banks), we reiterate major banks as
our preferred banking stocks.

October 31, 2014

EXCL: 9M14 EBITDA inline

EXCL’s 9M14 EBITDA of Rp6.3tr is inline with our estimates. Its revenue grew 11%y-o-y mainly driven by 43%y-o-y growth from data services (28% of total revenue). However, its operating and EBITDA margins fell due to the acquisition of loss-making axis. Maintain Buy with Rp6,700TP.

9M14 EBITDA inline. XL (EXCL) reported 3Q14 EBITDA of Rp2.0tr (flat q-o-q, -9%y-o-y). This brings 9M14 EBITDA to Rp6.3tr(flat y-o-y), inline with our FY14F EBITDA of Rp8.4tr (75% of forecast). Its 9M14 revenue grew 11%y-o-y to Rp17.5tr mainly driven by 43% y-o-y growth from data and internet services to Rp4.0tr while both voice and SMS grew by 4%y-o-y to Rp5.9tr and Rp3.5tr respectively. Its operating and EBITDA margins fell to 9.8% (from 14.0% in 9M13) and 36.0% (from 40.9% in 9M13) respectively, as expected, due to the acquisition of loss-making axis at the beginning of the year. However, EXCL reported Rp901bn net loss in 9M14 (vs our FY14F of Rp224bn) due to higher than expected forex loss as a result of weakening Rupiah and higher interest expense related to the acquisition of Axis.

Strong growth from data. EXCL data traffic grew 136%y-o-y to 86.5k TB driven by 53%y-o-y growth in data users to 31.2mn. Its smartphone penetration has increased to 25% with smartphone users growing 58%y-o-y to 14.6mn users. XL has installed 15.4k of 3G BTS as of 9M14 with a total BTS of 49.7k (excl BTS from Axis). Data now accounts for 28% of revenue (from 23% last year), the second largest after voice of 42%.

Maintain Buy with DCF-based TP of Rp6,700 (11%WACC, 3% terminal growth). We like EXCL for the potential turn around story post the acquisition of Axis. It has completed the integration with Axis ahead of the initial plan which should indicate the strong management quality. Key risks are: 1) The delayed in synergies with Axis would weaken revenue and earnings momentum, 2) continued price war between operators, 3) rupiah volatility from its high exposure to USD debt.

October 31, 2014

PTBA: 9M14 still strong

· PTBA Maintain BUY with railway improvements & resilient domestic business as catalysts. DCF TP still at IDR15,000.

· 3Q EPS down QoQ but 9M still strong, beating our forecast on higher-than-expected ASPs.

· 3Q railway volume another quarterly record.

October 31, 2014

ADRO: 3Q helped by lower tax

· ADRO Maintain BUY & IDR1,400 TP, DCF-based. Further operational improvements as catalysts.

· 1.0x P/BV undemanding as coal prices could have bottomed out at c.USD63/tonne.

· 3Q earnings flat QoQ as lower tax rate trumped lower ASPs & higher costs.

October 31, 2014

ROTI: Operationally Better In 3QFY14

Nippon (ROTI)’s 9MFY14 earnings were IDR132bn (+44.9% YoY), in line with expectation. 3QFY14 earnings declined to IDR31bn (-19.7% QoQ) as sales are cyclically low during Ramadan. However, 3QFY14 EBIT margin rose to 12.1% (+228bps QoQ) due to lower costs. We envision Nippon’s earnings to accerelate in 4QFY14. We believe the counter is attractive, given its strong earnings growth (29% CAGR) and high 24% ROE. Maintain BUY and a IDR1,490 TP (25% upside), based on 29x FY15 P/E.

¨ In line. Nippon Indosari Corpindo (Nippon)’s 9MFY14 net profit reached IDR132bn (+44.9% YoY), in line with our/consensus expectation, making up 62%/60% of our/consensus full-year earnings estimates. It is worth noting that 9M earnings accounted for around 61% of full-year earnings in the last three years. On a quarterly basis, 3Q14 net profit declined to IDR31bn (-19.7% QoQ) – lower than that of previous quarter’s IDR39bn. This was driven by lower sales during the month of Ramadan as less breads were consumed. In addition to that, since new factories in Purwakarta and Cikanded have already begun its operation, Nippon started paying capitalised interest in 3QFY14, causing interest expenses to jump to IDR19bn (+312% QoQ).
¨ Operationally better. Although sales were cyclically low during the month of Ramadan, Nippon maintained a flat sales of IDR446bn in 3QFY14. This indicates that there was a siginificant increase in August-September sales. In addition, 3QFY14 EBIT margin improved to 12.1% (+228bps QoQ), driven by lower raw material costs as well as direct labour & salary expenses and lower sales return. Direct labour & salary expenses as a percentage of sales declined to 14.9% in 3QFY14 (from 16.5% in 2QFY14). Sales return to gross sales ratio declined to 10.7% in 3QFY14 (from 12% in 2QFY14). Nippon also reduced its advertising to promotional expenses as a percentage of sales to 4.5% in 3QFY14 (from 4.8% in 2QFY14).
¨ Better 4Q14 earnings likely. The higher ASP and improved general trade distribution could be the main driver for Nippon’s 4QFY14 earnings growth. As Nippon anticipates higher transportation costs after the hike in subsidised fuel prices in November, it raised its ASP by 12.3% early this month. Meanwhile, the reorganisation of its general trade distribution in Medan is almost complete. It will also launch its first premium product – double soft white bread – which would broaden its premium product segment.

October 31, 2014

SMCB: 3Q14 results: Weak outcome on higher operating costs

§ Lower than expected 3Q14 net profit -5.5% q-q, -0.7% y-y: SMCB booked disappointing 3Q14 net profit of IDR125bn, -5.5% q-q, -0.7% y-y, for 43.9% of our 3Q14 estimate. Net profit reached IDR574bn in 9M14, accounting for 67.4% of our new estimate and only 50.6% of consensus (9M13: 62.9% of full-year net profit).

§ Higher operating costs and interest charges: Ahead of the production commencement of its Tuban plant, SMCB aimed to raise its presence in the East Java region by transporting cement from existing factories in West and Central Java, which caused a notable increase in 9M14 distribution expenses to IDR553.9bn (+17.5% y-y). This was exacerbated by SMCB’s increasing debt level to IDR5.5tn (+40.8% y-y) to fund the second phase of the Tuban plant and repay a parent company loan, raising 9M14 interest charges to IDR207bn (+45.9% y-y).

§ 9M14 sales in line on higher Sumatra share: SMCB booked 9M14 sales volume of 6.3mn tons (+3.9% y-y), translating into 69.4% of our full-year estimate of 9.0mn tons. In 9M14, SMCB grew its Sumatra market share to 21.1%; however, the Tuban plant commencement impact last June on sales in East Java remains to be seen (Exhibit 7).

Outlook: Lowering 2014-16F net profit by 15-25%
Higher operating costs due to SMCB’s inter-island strategy should continue to pressure margins; hence, we reduce our 2014-6F net profit by 15-25%. However, we expect distribution costs to ease in 2H15 due to the completion of the Tuban II plant and various distribution points.

Recommendation: Retain REDUCE and cut TP to IDR2,000
While we still forecast 7% sales growth in 2015, the high level of debt and margin pressures should continue to weigh on SMCB’s bottom line. Hence, we further cut our DCF-based 12-month TP from IDR2,150 to IDR2,000 (12.8% WACC), reflecting still expensive 2015 PE of 14.3x (sector: 15.3x at target). Risks to our call include higher sales and lower operating costs.

October 31, 2014

TLKM: Pricing Up Data

Telekomunikasi Indonesia’s (TLKM) results bore no surprises. The cluster-based pricing initiatives helped sustain Telkomsel’s double- digit revenue growth for the quarter, with average revenue per minute (RPM) rising 7% QoQ. We expect Telkomsel to stay focused on improving data yields to better monetise burgeoning data traffic. We maintain BUY, our IDR3,200 TP (WACC: 11%, TG: 1.5%, 15.9% upside) and forecasts. The stock remains our top Indonesian telco pick.

¨ No surprises. Telkom’s 9M14 core earnings made up 74-76% of our and street estimates. 3Q14 core earnings grew a robust 6.1% QoQ but slid 4.8% YoY, bringing YTD core earnings to IDR11.65trn (+3%).
¨ Seizing the robust ex-Java growth. Telkomsel’s revenue grew a commendable 10% YoY and 6.4% QoQ in 3Q14, supported by the cluster-based re-pricing initiatives against a relatively stable competitive environment during the quarter. In addition to maintaining its leadership in Java, we believe Telkomsel continues to execute well outside of Java (60% of revenue), which is also experiencing exponential data growth from rising smartphone adoption (<10% penetration). Smartphone penetration on its base rose 3ppts QoQ to 25%, driving the 31.8% YoY increase in mobile internet revenue.
¨ Flexi subs and spectrum transfer. Telkom is in the process of migrating Flexi subscribers over to Telkomsel with the cessation of the code division multiple access (CDMA) business by end-2014. We gather that the Government has granted Telkomsel the right to utilize 7.5MHz of the 800MHz spectrum previously occupied by Flexi.
¨ Biggest 3G BTS. 3G base transceiver stations (BTS) additions slowed to 2.8k from 3.7k in 2Q14 with about 40% of 3G sites fiberized.
¨ Forecasts & risks. We maintain our forecasts. Key earnings risks are: i) stronger-than-expected competition, and ii) higher-than-expected capex.
¨ BUY. Telkom’s dividend yield is the highest among the listed telcos on the JCI, and is rising. Key share price re-rating catalysts are: i) continued revenue market share gains, and ii) stronger-than-expected results.

October 31, 2014

KKGI Mengalami Penurunan Laba Menjadi US$7,9 Juta Dibandingkan Sebelumnya

PT Resources Alam Indonesia (KKGI) mengalami penurunan laba menjadi US$7,9 juta dibandingkan sebelumnya sebesar US$18 juta. Penjualan turun menjadi US$105,6 juta dari penjualan tahun sebelumnya yang sebesar US$152 juta. Beban pokok penjualan turun jadi US$87,6 juta dari sebelumnya US$107,3 juta.

October 31, 2014

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