NIM tends to get pressure this year
We are not going to discuss much about 2008. However, we notice that the NIM in 4Q08 has fallen below 11%. The management shared that the declining NIM was due to high pricing of time deposit. We view that the NIM tends to get pressure this year, as the funding option through time deposit would the one that BDMN will utilize in the current lack of liquidity.
Conservative mode on in 2009
The bank has not changed its view for this year. The assumptions that the company shared last month is maintained. Being conservative and tightening underwriting process would the attitude to cope the gloomy economic outlook. Loan growth in 2009 will be driven by micro lending, while motor financing is expected to post flat growth. BDMN will reduce exposure on lending of corporate, commercial and long term loan. As a result, this year loan book is expected to expand by 8% only.
Things to be done in 2009
This year the bank is going to execute two important matters:
1. BDMN is going to call back the US$300million sub debt on March 2009. Cash has already in hand to buy back the sub debt. 2. The bank intends to exercise the option to buy the remaining 20% stake of ADIRA, so that BDMN’s ownership in the company would be 95%. High ROE earned by ADIRA is one of the attractiveness to exercise the option.
We adjust some of our assumption, especially lower the fee based income in 2009. Low loan growth and reducing derivative transaction would potentially reduce fee based income in this year. With Gordon Growth Model we get the fair value of BDMN at Rp 2250 for the next 12 months. For the ROE, we plug in 19%, as the sustainable ROE. For
2009 and 2010, we forecast BDMN to book 15.7% and 17.5% ROE. We maintain the HOLD recommendation.
Sabtu, 14 Februari 2009
Detikfinance Danamon dan Elnusa Capai Kesepakatan
Jakarta - Bank Danamon dan Elnusa akhirnya mencapai kesepakatan untuk penyelesaian kontrak US$ selling diantara keduanya. Bank Indonesia memediasi kesepakatan di luar pengadilan antara keduanya. Demikian disampaikan Dirut Elnusa Eteng A Salam usai rapat dengan Danamon dan BI di gedung BI, Jakarta, Jumat (13/2/2009).
"Bank Danamon dan Elnuas mencapai kesepakat bersama. Mediasi Bank Indonesia berhasil mencapai kesepakatan di luar pengadilan. Jadi Danamon dan Elnusa hari ini mencapai kesepakatan untuk selesaikan masalah sehubungan dengan kontrak US$ selling antara kedua perusahaan tersebut," katanya. Rapat tersebut juga dihadiri Deputi Gubernur BI Siti Fadjriah dan Wadirut Bank Danamon Jos Luhukay.
Sebelumnya Bank Danamon menyatakan pihaknya hingga kini masih negosiasikan masalah derivatif senilai US$ 9 juta yang diharapkan bisa selesai dalam waktu dekat. Dari 22 nasabah derivatif Bank Danamon, hanya 1 yang sedang bermasalah. "Nasabah derivatif kita ada 22, nilai kontraknya total US$ 220 juta. Dari 22 tersebut yang 21 lancar, hanya 1 yang sedang dinegosiasikan," jelas Direktur Keuangan Bank Danamon Vera Eve Lim dalam konferensi pers di Gran Melia, Jakarta, Kamis (12/2/2009).
Menurut penjelasan Vera, nilai kontrak awal itu memang US$ 220 juta tapi jika mengacu pada mark to market yaitu Notional amount beli dengan notional amount jual dari 22 nasabah hanya sebesar US$ 49 juta dolar. "Yang satu nasabah yang sedang nego ini nilainya US$ 9 juta, untuk 21 nasabah lainnya yang senilai US$ 40 juta itu lancar. Namun kita untuk mencegah kerugian derivatif, Danamon telah mencadangkan provisi sebesar Rp 800 miliar," katanya.
"Bank Danamon dan Elnuas mencapai kesepakat bersama. Mediasi Bank Indonesia berhasil mencapai kesepakatan di luar pengadilan. Jadi Danamon dan Elnusa hari ini mencapai kesepakatan untuk selesaikan masalah sehubungan dengan kontrak US$ selling antara kedua perusahaan tersebut," katanya. Rapat tersebut juga dihadiri Deputi Gubernur BI Siti Fadjriah dan Wadirut Bank Danamon Jos Luhukay.
Sebelumnya Bank Danamon menyatakan pihaknya hingga kini masih negosiasikan masalah derivatif senilai US$ 9 juta yang diharapkan bisa selesai dalam waktu dekat. Dari 22 nasabah derivatif Bank Danamon, hanya 1 yang sedang bermasalah. "Nasabah derivatif kita ada 22, nilai kontraknya total US$ 220 juta. Dari 22 tersebut yang 21 lancar, hanya 1 yang sedang dinegosiasikan," jelas Direktur Keuangan Bank Danamon Vera Eve Lim dalam konferensi pers di Gran Melia, Jakarta, Kamis (12/2/2009).
Menurut penjelasan Vera, nilai kontrak awal itu memang US$ 220 juta tapi jika mengacu pada mark to market yaitu Notional amount beli dengan notional amount jual dari 22 nasabah hanya sebesar US$ 49 juta dolar. "Yang satu nasabah yang sedang nego ini nilainya US$ 9 juta, untuk 21 nasabah lainnya yang senilai US$ 40 juta itu lancar. Namun kita untuk mencegah kerugian derivatif, Danamon telah mencadangkan provisi sebesar Rp 800 miliar," katanya.
GlobalCoal Newcastle Coal Index
NEWC Weekly Index
16-Jan-09 81.46
23-Jan-09 88.19
30-Jan-09 83.15
06-Feb-09 78.17
13-Feb-09 80.28
NEWC Monthly Index
Oct-2008 106.92
Nov-2008 91.36
Dec-2008 78.18
Jan-2009 82.69
16-Jan-09 81.46
23-Jan-09 88.19
30-Jan-09 83.15
06-Feb-09 78.17
13-Feb-09 80.28
NEWC Monthly Index
Oct-2008 106.92
Nov-2008 91.36
Dec-2008 78.18
Jan-2009 82.69
PalmoilHQ Crude palm oil futures up on stronger soyoil
February 14, 2009 0:01 GMT+8Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives closed firmer yesterday on the back of expectations that India would import more palm oil from Malaysia, dealers said.
India was Malaysia’s fifth largest export destination for palm oil last year, after China, the European Union, Pakistan and the United States. Malaysia’s export of palm oil and palm oil products to India was valued at RM2.89 billion in 2008. Malaysia’s CPO exports also rose steadily to 900,000 metric tonnes last year from 500,000 metric tonnes in 2007.
“The CPO market yesterday was also influenced by the strength of its rival, soyoil,” dealers said. At close, the contract month for February 2009 rose RM25 to settle at RM1,995 per tonne and March 2009 added RM72 to RM2,012 per tonne. The CPO futures for April 2009 increased RM67 to RM1,995 per tonne and May 2009 advanced RM79 to RM1,994 per tonne.
Yesterday’s volume went up to 15,176 lots compared with Thursday’s 10,276 lots while open interests fell to 82,465 contracts from 83,759 contracts previously. On the physical market, the CPO price for February South rose to RM2,020 per tonne from RM1,980 per tonne previously.
Associated Press Stocks fall as investors crave more details on rescue plans; Dow hits another '09 low
Friday February 13, 2009, 5:34 pm ESTNEW YORK (AP) -- Investors sent Washington a message this week: They won't commit to stocks until the government commits to a plan. Stocks ended lower Friday, pushing the Dow Jones industrial average to its lowest close since last November and leaving it with a weekly decline of 5.2 percent.
The gears are moving in Washington. On Friday, the White House said President Obama will outline steps to stem home foreclosures next Wednesday, and the House passed a $787 billion economic stimulus bill.
Wall Street is focused, though, on lingering uncertainties. The stimulus package -- too big for some, too small for others -- is far from proving itself effective in reviving the economy. Investors also hesitated to get too excited about the upcoming announcement on preventing home foreclosures, after their hopes got dashed earlier in the week. more...
Jumat, 13 Februari 2009
CIMB Petrosea
Petrosea's business line include EPC (oil and gas), Services, and Mining.
Coal contract mining is the biggest revenue contributor, accommodating around 70% from total revenue. Gunung Bayan Resources is Petrosea's biggest customer for coal contract mining. The company has signed a contract with Gunung Bayan for US$300m for five years early this year, for coal overburden removal of 36mn bcm per annum, which we estimated to contributes around 50% from its total revenue.
Petrosea also have a small coal concession East Kalimantan, with total reserve of 17mn tonne. The coal concession is a 50/50 joint venture between Petrosea and PT Harum Dana.
At this juncture, as concentration for Indika is to acquire coal mine assets, we view it is unlikely for the company to acquire Petrosea as its business mainly concentrated on coal contract mining. Further, it could raise an issue with Gunung Bayan Resources, Petrosea's biggest customer.
Indika denied to comment in this issue, however, they stated that they are open for any acquisition related with its coal assets that would enhance its value. Indika currently has net cash of Rp406bn as of 9M08.
Petrosea's market cap is currently Rp546bn.
Noteworthy:
1) PTRO has a shareholder, Clough of Australia, who's been said keen to dispose of PTRO for quite sometime. Interestingly, Clough added about 3% stake in PTRO to 80% presently in early 2008, based on Bloomberg;
2) A good fit for PTRO is heavy equipment distributor like HEXA given UNTR's business model of owning Pama has proven to be successful
Instead of INDY, BYAN might be better fit sine it would not run into potential conflict of interest on PTRO part
Put all this aside, buying contractor like PTRO is tricky business given main asset is the human resource
The M&A angle makes for good trades but beware of the liquidity trap
Coal contract mining is the biggest revenue contributor, accommodating around 70% from total revenue. Gunung Bayan Resources is Petrosea's biggest customer for coal contract mining. The company has signed a contract with Gunung Bayan for US$300m for five years early this year, for coal overburden removal of 36mn bcm per annum, which we estimated to contributes around 50% from its total revenue.
Petrosea also have a small coal concession East Kalimantan, with total reserve of 17mn tonne. The coal concession is a 50/50 joint venture between Petrosea and PT Harum Dana.
At this juncture, as concentration for Indika is to acquire coal mine assets, we view it is unlikely for the company to acquire Petrosea as its business mainly concentrated on coal contract mining. Further, it could raise an issue with Gunung Bayan Resources, Petrosea's biggest customer.
Indika denied to comment in this issue, however, they stated that they are open for any acquisition related with its coal assets that would enhance its value. Indika currently has net cash of Rp406bn as of 9M08.
Petrosea's market cap is currently Rp546bn.
Noteworthy:
1) PTRO has a shareholder, Clough of Australia, who's been said keen to dispose of PTRO for quite sometime. Interestingly, Clough added about 3% stake in PTRO to 80% presently in early 2008, based on Bloomberg;
2) A good fit for PTRO is heavy equipment distributor like HEXA given UNTR's business model of owning Pama has proven to be successful
Instead of INDY, BYAN might be better fit sine it would not run into potential conflict of interest on PTRO part
Put all this aside, buying contractor like PTRO is tricky business given main asset is the human resource
The M&A angle makes for good trades but beware of the liquidity trap
PalmoilHQ Indonesian government to allow peatland oil palm plantations
February 13, 2009 12:14 GMT+8
The Agriculture Ministry will issue a decree to allow businesses to dig up the country’s millions of hectares of peatland for oil palm plantations.
Gatot Irianto, the ministry’s head of research and development, said his office was currently drafting a ministerial decree that would explain in detail the mechanism to turn the peatland areas into oil palm plantations, a move that many say will further damage the country’s environment.
“We still need land for oil palm plantations. We must be honest: the sector has been the main driver for the people’s economy,” he said Thursday on the sidelines of a discussion about adaptation in agriculture, organized by the National Commission on Climate Change.
The draft decree is expected to go into force this year. more...
The Agriculture Ministry will issue a decree to allow businesses to dig up the country’s millions of hectares of peatland for oil palm plantations.
Gatot Irianto, the ministry’s head of research and development, said his office was currently drafting a ministerial decree that would explain in detail the mechanism to turn the peatland areas into oil palm plantations, a move that many say will further damage the country’s environment.
“We still need land for oil palm plantations. We must be honest: the sector has been the main driver for the people’s economy,” he said Thursday on the sidelines of a discussion about adaptation in agriculture, organized by the National Commission on Climate Change.
The draft decree is expected to go into force this year. more...
Bloomberg Asian Stocks Rise on Policy Optimism; ANZ Gains, Pioneer Slumps
Feb. 13 (Bloomberg) -- Asian stocks rose for the first time in five days, led by banks and electronics companies, on optimism governments will widen efforts to end the financial crisis and revive global growth.
Australia & New Zealand Banking Group Ltd., Australia’s third largest, jumped 9 percent in Sydney as the country’s senate passed a $28 billion stimulus package. Sichuan Changhong Electric Co., China’s second-biggest television maker, surged 10 percent in Shanghai after the 21st Century Business Herald said the government may help the electronics industry. Electronics maker Pioneer Corp. tumbled 19 percent in Tokyo after widening its full-year loss forecast to a record.
“Concerted government efforts to stimulate the economy do inject some confidence in the market,” said Nicole Sze, a Singapore-based investment analyst for Bank Julius Baer & Co, which manages $350 billion. “But it will take some time before we see positive results.” more...
Australia & New Zealand Banking Group Ltd., Australia’s third largest, jumped 9 percent in Sydney as the country’s senate passed a $28 billion stimulus package. Sichuan Changhong Electric Co., China’s second-biggest television maker, surged 10 percent in Shanghai after the 21st Century Business Herald said the government may help the electronics industry. Electronics maker Pioneer Corp. tumbled 19 percent in Tokyo after widening its full-year loss forecast to a record.
“Concerted government efforts to stimulate the economy do inject some confidence in the market,” said Nicole Sze, a Singapore-based investment analyst for Bank Julius Baer & Co, which manages $350 billion. “But it will take some time before we see positive results.” more...
IQP Harga Karet Menguat
IQP, (13/2) - Harga karet alam menguat untuk ketujuh harinya dalam
delapan hari perdagangan karena spekulasi china akan meningkatkan pembelian.
Harga karet untuk Juli naik 2,4 persen menjadi 143,9 yen per kilogram ($1579
per metric ton di Tokyo Commodity Exchange jam 11 waktu tokyo.
delapan hari perdagangan karena spekulasi china akan meningkatkan pembelian.
Harga karet untuk Juli naik 2,4 persen menjadi 143,9 yen per kilogram ($1579
per metric ton di Tokyo Commodity Exchange jam 11 waktu tokyo.
IQP Bakrie Telecom
IQp, (13/2) - PT Bakrie Telecom (Btel) tidak akan lagi disuntik dana oleh pemegang saham karena korporasi telah menyatakan diri mampu menutup kebutuhan modal selama tiga tahun hingga 2010. "Pemegang saham tidak akan injek (dana) lagi karena kami sudah mampu menutup kebutuhan modal untuk tiga tahun," kata Director Corporate Service Btel, Rakhmat Djunaedi, di Jakarta.
Ia mengatakan, secara pendanaan pihaknya sejak 2008 telah mampu menutup kebutuhan modal selama 3 tahun hingga 2010. Pihaknya bahkan menargetkan mampu menanamkan investasi hingga mencapai 600 juta dolar AS. "Capital Expenditur yang ditanamkan pada 2009 sebesar 200 juta dolar AS," katanya. Ia mengatakan, dari target investasi sebesar 600 juta dolar AS hingga 2010 itu, sebanyak 300 juta dolar AS di antaranya diperoleh dari aksi korporasi right issue. Sementara 150 juta dolar AS di antaranya berasal dari vendor (vendor financing) dan sisanya sebesar 150 juta dolar AS berasal dari kemampuan cash perusahaan.
Ia mengatakan, secara pendanaan pihaknya sejak 2008 telah mampu menutup kebutuhan modal selama 3 tahun hingga 2010. Pihaknya bahkan menargetkan mampu menanamkan investasi hingga mencapai 600 juta dolar AS. "Capital Expenditur yang ditanamkan pada 2009 sebesar 200 juta dolar AS," katanya. Ia mengatakan, dari target investasi sebesar 600 juta dolar AS hingga 2010 itu, sebanyak 300 juta dolar AS di antaranya diperoleh dari aksi korporasi right issue. Sementara 150 juta dolar AS di antaranya berasal dari vendor (vendor financing) dan sisanya sebesar 150 juta dolar AS berasal dari kemampuan cash perusahaan.
IQP Bumi Resources
IQP, (13/2) - Bumi Resources menghabiskan biaya eksplorasi sebesar $1.107.012,93 di bulan januari 2009 atau lebih kecil dari biaya yang dianggarkan $1.385.163. Keterangan Dleep Srivistava senior vice presiden jumat menyebutkan total anggaran eksplorasi tahun ini mencapai $14.891.562 dimana kegiatan eksplorasi dilakukan di daerah pelikan West South, kelelawar Kasuari dan Bendili Low Wall serta bendili South.
Detikfinance Danamon Segera Kuasai 95% Saham Adira
Jakarta - PT Bank Danamon Tbk (BDMN) memastikan akan menambah kepemilikan sahamnya di PT Adira Multi Dinamika Finance Tbk (ADMF) sebesar 20% menjadi sekitar 95%. Saat ini BDMN memiliki 75% saham ADMF."Kami akan menambah saham ADMF sebesar 20%," ujar Direktur Utama BDMN, Sebastian Paredes usai paparan di hotel Gran Melia, Jl Rasuna Said, Jakarta, Jumat (13/2/2009).
Saat ini BDMN menguasai 75% saham ADMF. Pada tahun 2004, BDMN mengakuisisi 75% saham ADMF dengan menggunakan dana hasil penerbitan obligasi subordinasi senilai US$ 300 juta. more...
CLSA BISI Reap a Harvest
The business Jakarta Comp @ 1,332.67 Indonesia
The business
Bisi International is Indonesia's largest and only publicly listed producer of hybrid seeds‚ producing corn‚ rice‚ fruit and vegetables. It has a strategic alliance with Monsanto‚ which provides the firm with high-quality breeder corn seeds. The company expects a continued shift towards hybrid corn‚ the adoption rate of which rose from 25% to 43% in 2006-07 and should reach 55-60% in 2008 and 90% by 2012. Hybrid rice‚ on the other hand‚ should see accelerating growth as the penetration level is below 10%. We expect faster adoption for hybrid rice as Bisi leverages its success in hybrid corn and believe the firm will progress on the back of these two products.
Competition & market franchise
Developing hybrid seeds is a lengthy and ongoing process of intensive research and development (R&D). The company has 12 R&D facilities across the country engaging in testing corn‚ rice and vegetable varieties. It also possesses 25 years of experience in specific breeding programmes to develop superior-quality hybrid seeds suited to Indonesia. Imported hybrids are often susceptible to pests and diseases. Bisi‚ with its long-standing relationships with contract farmers‚ local R&D conducted across the country‚ nationwide marketing‚ sales and distribution platform makes it difficult for new entrants to establish a foothold.
Current issues
Bisi's challenges include its inability to raise prices, lower volume and earnings as well as a tough business environment. Earnings will suffer from higher interest and selling and distribution expenses as well as from falling corn and rice prices that impair the firm’s ability to raise seed prices next year. A tougher environment this year will also make it difficult to convince farmers to try hybrid corn and rice as they require 25% more fertiliser than the conventional breeds, lowering Bisi's yields from contract farmers. As such, although we are more positive about its hybrid-corn business as the benefits are well demonstrated, management has cut its guidance on rice and corn volumes. On the bright side, pesticides, which accounted for 25% of the company's revenue in FY07, should experience sharp-price corrections.
The business
Bisi International is Indonesia's largest and only publicly listed producer of hybrid seeds‚ producing corn‚ rice‚ fruit and vegetables. It has a strategic alliance with Monsanto‚ which provides the firm with high-quality breeder corn seeds. The company expects a continued shift towards hybrid corn‚ the adoption rate of which rose from 25% to 43% in 2006-07 and should reach 55-60% in 2008 and 90% by 2012. Hybrid rice‚ on the other hand‚ should see accelerating growth as the penetration level is below 10%. We expect faster adoption for hybrid rice as Bisi leverages its success in hybrid corn and believe the firm will progress on the back of these two products.
Competition & market franchise
Developing hybrid seeds is a lengthy and ongoing process of intensive research and development (R&D). The company has 12 R&D facilities across the country engaging in testing corn‚ rice and vegetable varieties. It also possesses 25 years of experience in specific breeding programmes to develop superior-quality hybrid seeds suited to Indonesia. Imported hybrids are often susceptible to pests and diseases. Bisi‚ with its long-standing relationships with contract farmers‚ local R&D conducted across the country‚ nationwide marketing‚ sales and distribution platform makes it difficult for new entrants to establish a foothold.
Current issues
Bisi's challenges include its inability to raise prices, lower volume and earnings as well as a tough business environment. Earnings will suffer from higher interest and selling and distribution expenses as well as from falling corn and rice prices that impair the firm’s ability to raise seed prices next year. A tougher environment this year will also make it difficult to convince farmers to try hybrid corn and rice as they require 25% more fertiliser than the conventional breeds, lowering Bisi's yields from contract farmers. As such, although we are more positive about its hybrid-corn business as the benefits are well demonstrated, management has cut its guidance on rice and corn volumes. On the bright side, pesticides, which accounted for 25% of the company's revenue in FY07, should experience sharp-price corrections.
CLSA Adaro Energy (ADRO IJ)
The business Jakarta Comp @ 1,332.67 Indonesia 2 February 2009
Adaro Energy's main business is coal mining‚ which contributes 85% of consolidated earnings. The company bought its mine‚ Adaro Indonesia‚ in two stages - the first 40% in 2002 and the remainder through a leveraged buyout in 2005. The mine is currently the second-largest producer of thermal-coal in Indonesia and operates under a 30-year coal contract of work; commercial operation started in 1992. Adaro owns a mining-contracting unit that presently handles 21% of its own production‚ with plans to increase its portion to 50%. It also has strategic investments in coal-logistics companies and is in the process of acquiring a small coal mine.
The company's total reserves of 928m tonnes and resources of 2.8bn tonnes the third-largest in Indonesia - are key to its plan to double production to 80m tonnes in five years. The coal produced is of moderate calorific value with very low ash and sulphur content‚ which is suitable for blending to meet stricter global environmental requirements. Adaro Energy sells coal to more than 40 customers in 18 countries‚ most of which are major power plants and none accounts for more than 10% of Adaro's total revenue. Domestic sales represent some 30% of total top line and this portion could rise in tandem with increasing domestic power capacity.
There are several issues surrounding Adaro. First, the company has been in a legal battle with Indonesia's pulp and paper tycoon, Sukanto Tanoto, for the legal right of the coal mine. We believe Adaro has the legal right on the coal mine as supported by the Singapore High Court's decision on this case. The legal case, however, is dragging on in both Singapore Supreme Court and Indonesia State Administrative Court. Second, there is an ongoing renegotiation on the 30m tonnes contracted until 2011. Third, as net gearing is hovering at 90%, the company's expansion plan might be delayed, especially with the current global credit crunch. Fourth, valued-added-taxroyalty issue might have a near-term cashflow impact, as reimbursement might take a while.
Adaro Energy's main business is coal mining‚ which contributes 85% of consolidated earnings. The company bought its mine‚ Adaro Indonesia‚ in two stages - the first 40% in 2002 and the remainder through a leveraged buyout in 2005. The mine is currently the second-largest producer of thermal-coal in Indonesia and operates under a 30-year coal contract of work; commercial operation started in 1992. Adaro owns a mining-contracting unit that presently handles 21% of its own production‚ with plans to increase its portion to 50%. It also has strategic investments in coal-logistics companies and is in the process of acquiring a small coal mine.
The company's total reserves of 928m tonnes and resources of 2.8bn tonnes the third-largest in Indonesia - are key to its plan to double production to 80m tonnes in five years. The coal produced is of moderate calorific value with very low ash and sulphur content‚ which is suitable for blending to meet stricter global environmental requirements. Adaro Energy sells coal to more than 40 customers in 18 countries‚ most of which are major power plants and none accounts for more than 10% of Adaro's total revenue. Domestic sales represent some 30% of total top line and this portion could rise in tandem with increasing domestic power capacity.
There are several issues surrounding Adaro. First, the company has been in a legal battle with Indonesia's pulp and paper tycoon, Sukanto Tanoto, for the legal right of the coal mine. We believe Adaro has the legal right on the coal mine as supported by the Singapore High Court's decision on this case. The legal case, however, is dragging on in both Singapore Supreme Court and Indonesia State Administrative Court. Second, there is an ongoing renegotiation on the 30m tonnes contracted until 2011. Third, as net gearing is hovering at 90%, the company's expansion plan might be delayed, especially with the current global credit crunch. Fourth, valued-added-taxroyalty issue might have a near-term cashflow impact, as reimbursement might take a while.
CLSA Research Today: Telkom, Defensive Quality TP;idr8,000
Research Today: Telkom, defensive quality
Our analyst Wilianto went to Telkom Indonesia (TLKM IJ) analyst meeting yesterday. We believe that domestic demand is still the most defensive story in Indonesia. Mobile subsidiary Telkomsel believes that tariff has reached bottom in 4Q08. Competition will be focusing on promotion, advertisement, brand equity, network quality, and coverage. With the strongest balance sheet in the sector, we believe that TLKM will emerge stronger from the crisis.
Major points from the TLKM report:
TLKM believes tariffs bottomed in 4Q08 and that the price war is coming to an end
Telkomsel subscribers continue to grow
Telkom flexi gain strong traction
Broadband contribution continues to increase
Management acknowledged that they are looking into potential investment in Iran and fully aware of the political risk and potential backfire from its shareholders.
Market sentiment will remain fragile until management decides on Iran.
Our analyst Wilianto went to Telkom Indonesia (TLKM IJ) analyst meeting yesterday. We believe that domestic demand is still the most defensive story in Indonesia. Mobile subsidiary Telkomsel believes that tariff has reached bottom in 4Q08. Competition will be focusing on promotion, advertisement, brand equity, network quality, and coverage. With the strongest balance sheet in the sector, we believe that TLKM will emerge stronger from the crisis.
Major points from the TLKM report:
TLKM believes tariffs bottomed in 4Q08 and that the price war is coming to an end
Telkomsel subscribers continue to grow
Telkom flexi gain strong traction
Broadband contribution continues to increase
Management acknowledged that they are looking into potential investment in Iran and fully aware of the political risk and potential backfire from its shareholders.
Market sentiment will remain fragile until management decides on Iran.
Mandiri Sekuritas Macroscope
On Monday (Feb 16), the statistical bureau schedules to report the 4Q08 GDP growth figure. We expect economic growth to have slowed to 5.5% yoy in the 4Q08 vs. 6.1% in the previous quarters as impacts of global economic downturn started to take its tolls on domestic economy. In 2008 the economy likely grew by 6.1%.
Private consumption and investment eased on the back of weaker economic activities and tight liquidity triggered by risk aversion around the globe. We expect a sharp deceleration in export and import growth in 4Q08.
In light of waning global trade demand, tradable sector (i.e. manufacturing, agriculture, and mining) is likely to have slowed considerably in the 4Q08. Meanwhile, non-tradable sector, such as communications, trade, and construction may held up relatively well, backed by modest domestic demand.
We believe the 4Q08 would give confirmation on weaken domestic activities, which would provide more reason for the government to push forward fiscal stimulus and accelerate monetary policy loosening.
Private consumption and investment eased on the back of weaker economic activities and tight liquidity triggered by risk aversion around the globe. We expect a sharp deceleration in export and import growth in 4Q08.
In light of waning global trade demand, tradable sector (i.e. manufacturing, agriculture, and mining) is likely to have slowed considerably in the 4Q08. Meanwhile, non-tradable sector, such as communications, trade, and construction may held up relatively well, backed by modest domestic demand.
We believe the 4Q08 would give confirmation on weaken domestic activities, which would provide more reason for the government to push forward fiscal stimulus and accelerate monetary policy loosening.
Credit Suisse Indonesia Market Strategy Maintain UNDERWEIGHT
We believe that falling interest rates is one of the key themes for Indonesia in 2009. In this note, we have tried to analyse its impact on Indonesian companies with high net gearing levels (>70%), in a more detailed manner, by splitting the debts as domestic and foreign denominated and fixed, and floating interest rates.
œ Among the five companies, PGAS came out as the safest and the least sensitive to interest rates (especially toward the Indonesian rates), since most of its debts are fixed, USD-denominated and bear low rates. The coverage ratio is high.
œ Indofood’s earnings are sensitive to interest rates. Every 1% change would its impact its earnings by 8-10% for FY09-10E, but its coverage ratio is at a very comfortable level.
œ Holcim Indonesia’s actual risk is lower than it looks, in our view. Although the coverage is lower and its earnings are sensitive to US dollar interest rates, its debt is 60% supported by principal. Exceclcomindo’s case is similar to Indofood, but its operating performance is good. Mobile-8 is the riskiest.
œ Among the five companies, PGAS came out as the safest and the least sensitive to interest rates (especially toward the Indonesian rates), since most of its debts are fixed, USD-denominated and bear low rates. The coverage ratio is high.
œ Indofood’s earnings are sensitive to interest rates. Every 1% change would its impact its earnings by 8-10% for FY09-10E, but its coverage ratio is at a very comfortable level.
œ Holcim Indonesia’s actual risk is lower than it looks, in our view. Although the coverage is lower and its earnings are sensitive to US dollar interest rates, its debt is 60% supported by principal. Exceclcomindo’s case is similar to Indofood, but its operating performance is good. Mobile-8 is the riskiest.
Detikfinance Danamon Siapkan Rights Issue
Jakarta - PT Bank Danamon Indonesia Tbk (BDMN) berencana melakukan penawaran umum terbatas (rights issue) dengan hak memesan efek terlebih dahulu (HMETD). Perseroan akan meminta persetujuan pemegang saham dalam RUPS yang akan digelar 20 Maret 2009.
"Ya, agenda RUPS pada 20 Maret adalah melakukan rights issue," ujar Corporate Secretary BDMN, Dini Herdini saat dihubungi detikFinance, Jumat (13/2/2009). more...
"Ya, agenda RUPS pada 20 Maret adalah melakukan rights issue," ujar Corporate Secretary BDMN, Dini Herdini saat dihubungi detikFinance, Jumat (13/2/2009). more...
CIMB Bank Danamon
Bank Danamon
Result note - Bulk of unwinding expenses - by Mulya Chandra CFA
(BDMN IJ / BDMN.JK, UNDERPERFORM - Maintained, Rp2,175 - Tgt. Rp2,400, Financial Services)
Danamon's FY08 results were in line with our expectations, but below consensus. Unwinding its foreign-currency forward contracts, Danamon booked Rp804bn of losses in 4Q08. Its CAR dropped to 13.4% as the bank plans to retire its subordinated debt in Mar 09. Cost-to-income ratio rose to 57% from 48% for FY08, on business expansion. Provisioning coverage went down to 102% from 127%, to minimise the provisioning/unwinding impact on P/L. We maintain our Underperform rating, on anxieties of low loan growth and high possibilities of rising provisioning expenses in 2009. Our DDM target price has been maintained at Rp2,400.
Result note - Bulk of unwinding expenses - by Mulya Chandra CFA
(BDMN IJ / BDMN.JK, UNDERPERFORM - Maintained, Rp2,175 - Tgt. Rp2,400, Financial Services)
Danamon's FY08 results were in line with our expectations, but below consensus. Unwinding its foreign-currency forward contracts, Danamon booked Rp804bn of losses in 4Q08. Its CAR dropped to 13.4% as the bank plans to retire its subordinated debt in Mar 09. Cost-to-income ratio rose to 57% from 48% for FY08, on business expansion. Provisioning coverage went down to 102% from 127%, to minimise the provisioning/unwinding impact on P/L. We maintain our Underperform rating, on anxieties of low loan growth and high possibilities of rising provisioning expenses in 2009. Our DDM target price has been maintained at Rp2,400.
Bloomberg China Economy Shows Signs of Recovery as Stimulus Takes Effect
China Economy Shows Signs of Recovery as Stimulus Takes Effect
Feb. 13 (Bloomberg) -- China’s economy is showing signs that a 4 billion yuan ($585 billion) stimulus package is taking effect.
The world’s third-biggest economy may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimates of 14 economists surveyed by Bloomberg News.
China is trying to reverse an economic slide that has already cost 20 million jobs, raising the risk of social unrest as exports plunge and the property market sags. Spending on roads railways and housing has increased prices for iron ore, put a floor under industrial output and helped to drive a record $237 billion of new loans in January.
“China looks set to be the first major economy to recover from the current global meltdown,” said Lu Ting, an economist with Merrill Lynch & Co. in Hong Kong. “China is the only economy in the world to see significant growth in credit to corporate and household sectors after September 2008, when the financial crisis worsened to a near collapse.” more...
Feb. 13 (Bloomberg) -- China’s economy is showing signs that a 4 billion yuan ($585 billion) stimulus package is taking effect.
The world’s third-biggest economy may expand 6.6 percent in the second quarter after slowing to 6.3 percent in the three months to March 31, the weakest pace since 1999, according to the median estimates of 14 economists surveyed by Bloomberg News.
China is trying to reverse an economic slide that has already cost 20 million jobs, raising the risk of social unrest as exports plunge and the property market sags. Spending on roads railways and housing has increased prices for iron ore, put a floor under industrial output and helped to drive a record $237 billion of new loans in January.
“China looks set to be the first major economy to recover from the current global meltdown,” said Lu Ting, an economist with Merrill Lynch & Co. in Hong Kong. “China is the only economy in the world to see significant growth in credit to corporate and household sectors after September 2008, when the financial crisis worsened to a near collapse.” more...
Bloomberg U.S. Economy: Retail Sales Unexpectedly Halt Slide
Feb. 12 (Bloomberg) -- Sales at U.S. retailers unexpectedly halted a six-month slide in January, an advance that may not be sustained after the number of Americans collecting jobless benefits reached the highest on record.
The 1 percent gain in purchases reflected higher gasoline prices and more spending on clothing and food, the Commerce Department said today in Washington. Excluding cars, the gain was 0.9 percent. The Labor Department reported that 4.8 million people are now collecting unemployment insurance.
An accelerating decline in the job market, along with a record destruction of household wealth with the slide in home values and stocks mean consumers are likely to resume cutbacks. Stocks tumbled on concern that President Barack Obama’s stimulus package will be insufficient to assure a swift economic recovery. more...
The 1 percent gain in purchases reflected higher gasoline prices and more spending on clothing and food, the Commerce Department said today in Washington. Excluding cars, the gain was 0.9 percent. The Labor Department reported that 4.8 million people are now collecting unemployment insurance.
An accelerating decline in the job market, along with a record destruction of household wealth with the slide in home values and stocks mean consumers are likely to resume cutbacks. Stocks tumbled on concern that President Barack Obama’s stimulus package will be insufficient to assure a swift economic recovery. more...
Detikfinance Danamon Beli Balik Obligasi Subordinasi US$ 300 Juta
Jakarta - PT Bank Danamon Indonesia Tbk (BDMN) memastikan akan mengeksekusi opsi beli balik (call option) obligasi subordinasi perseroan tahun 2004 senilai US$ 300 juta. Call option jatuh tempo pada Maret 2009.
"Kami sudah mengirim surat hari ini untuk mengeksekusi call option subdebt US$ 300 juta di akhir Maret 2009," ujar Presiden Direktur BDMN, Sebastian Paredes dalam paparan di hotel Gran Melia, Jl Rasuna Said, Jakarta, Kamis (12/2/2009).
Menurut Sebastian, opsi beli balik obligasi penting dilakukan mengingat beberapa bank yang tidak mengeksekusi opsi beli balik obligasinya mengalami kejatuhan harga saham yang cukup dalam. more...
"Kami sudah mengirim surat hari ini untuk mengeksekusi call option subdebt US$ 300 juta di akhir Maret 2009," ujar Presiden Direktur BDMN, Sebastian Paredes dalam paparan di hotel Gran Melia, Jl Rasuna Said, Jakarta, Kamis (12/2/2009).
Menurut Sebastian, opsi beli balik obligasi penting dilakukan mengingat beberapa bank yang tidak mengeksekusi opsi beli balik obligasinya mengalami kejatuhan harga saham yang cukup dalam. more...
Bloomberg Wheat Declines as Precipitation Boosts Crop Prospects in China
Feb. 12 (Bloomberg) -- Wheat fell to the lowest price in almost three months, erasing earlier gains, on speculation that rain will improve prospects for drought-stressed crops in China, the world’s largest producer of the grain.
Rain is expected today and tomorrow and will fall for three days starting Feb. 15, alleviating the worst drought in five decades, the China Meteorological Administration said in an e- mailed report today. The area suffering from drought conditions has shrunk 25 percent since its peak, Wei Chaoan, vice minister of agriculture, said today.
“China did get a little rain in the past 24 hours,” said Jamey Kohake, a broker at Paragon Investments in Silver Lake, Kansas. “Probably enough to buy them some time, but not enough to give them a bumper crop.”
Wheat futures for March delivery fell 4.5 cents, or 0.8 percent, to $5.3875 a bushel on the Chicago Board of Trade, after earlier reaching $5.36, the lowest for a most-active contract since Dec. 16. The price has tumbled 60 percent from a record $13.495 on Feb. 27. Futures earlier gained as much as 1.7 percent after a government report showed increased U.S. export sales. more...
Rain is expected today and tomorrow and will fall for three days starting Feb. 15, alleviating the worst drought in five decades, the China Meteorological Administration said in an e- mailed report today. The area suffering from drought conditions has shrunk 25 percent since its peak, Wei Chaoan, vice minister of agriculture, said today.
“China did get a little rain in the past 24 hours,” said Jamey Kohake, a broker at Paragon Investments in Silver Lake, Kansas. “Probably enough to buy them some time, but not enough to give them a bumper crop.”
Wheat futures for March delivery fell 4.5 cents, or 0.8 percent, to $5.3875 a bushel on the Chicago Board of Trade, after earlier reaching $5.36, the lowest for a most-active contract since Dec. 16. The price has tumbled 60 percent from a record $13.495 on Feb. 27. Futures earlier gained as much as 1.7 percent after a government report showed increased U.S. export sales. more...
Bloomberg Nickel Drops for a Fourth Day on Speculation Demand Will Weaken
Feb. 12 (Bloomberg) -- Nickel declined for a fourth day in London on speculation demand will deteriorate as stainless-steel makers run down inventories of the metal until economic growth revives. Copper and aluminum also retreated.Nickel has dropped 12 percent this year, more than any other metal except steel on the London Metal Exchange. Demand for nickel will fall 15 percent this quarter from a year earlier and 10 percent in the next quarter, Barclays Capital forecast. Posco, Asia’s biggest stainless-steel maker, cut prices last week for the first time since August in an effort to spur demand.
“We are clearly anxious over the coming quarters, and the market is remaining quite weak,” said Philippe Smits, managing director of stainless-steel warehouse company Contisteel NV/SA in Belgium. “I’m not getting signs things are improving.”
Nickel for three-month delivery fell $105, or 1 percent, to $10,300 a metric ton at 5:03 p.m. on the LME, erasing a gain of as much as 1.1 percent. Prices have slid 10 percent this week. Inventories in Belgian and Dutch Contisteel warehouses that hold stainless steel are down 50 percent since last year, Smits said.
“Due to the present economic situation, we are not prepared to build up any” stockpiles, he said.
Metals also fell after the European Union’s statistics office said European industrial production slid 12 percent from a year earlier in December, speeding up from November’s 8.4 percent decline. The latest drop was the biggest since at least 1986.
‘Difficult’ Demand
“Very difficult” demand conditions for commodities will continue into next year, Tom Albanese, chief executive officer of mining company Rio Tinto Group, said today. Nickel demand will fall 25,000 tons short of production this year, Barclays forecast last week. Stainless steel accounts for 64 percent of use, according to Citigroup Inc.
Nickel inventories in LME-monitored warehouses jumped 576 tons to 88,728 tons, the most since June 27, 1995, the exchange said today. Some 75 percent of the total is held in warehouses in Rotterdam. LME warehouses are buyers of last resort. more...
Detikfinance Ekonomi RI Masuk 3 Terbaik di Asia
Jakarta - Perekonomian Indonesia di tahun 2009 masih termasuk yang lumayan di Asia. Di kawasan Asia, hanya 3 negara yang diperkirakan pertumbuhan ekonominya masih positif, dan satu diantaranya adalah Indonesia.
Hal ini dikatakan oleh Gubernur BI Boediono dalam rapat kerja dengan Panitia Anggaran DPR di Gedung DPR, Senayan, Jakarta, Kamis (12/2/2009).
"Indonesia sebenarnya sampai saat ini posisi kita relatif baik, di Asia hanya 3 negara yang pertumbuhannya positif yaitu Cina, India dan Indonesia. Sementara Malaysia 0% dan yang lainnya negatif," tuturnya.
Dalam rapat tersebut Boediono menceritakan hasil pertemuan bank sentral se-Asia Pasifik yang dihadirinya beberapa waktu lalu di Kuala Lumpur, Malaysia.
Untuk asumsi pertumbuhan ekonomi 2009 Indonesia menurut BI adalah 4-5%. "Dengan downside risk atau risiko ke bawah cukup besar," jelasnya.
Untuk inflasi 2009 diperkirakan 5-7%, suku bunga SBI 3 bulan adalah 7,5%, dan nilai tukar rupiah Rp 11.000/US$.
Hal ini dikatakan oleh Gubernur BI Boediono dalam rapat kerja dengan Panitia Anggaran DPR di Gedung DPR, Senayan, Jakarta, Kamis (12/2/2009).
"Indonesia sebenarnya sampai saat ini posisi kita relatif baik, di Asia hanya 3 negara yang pertumbuhannya positif yaitu Cina, India dan Indonesia. Sementara Malaysia 0% dan yang lainnya negatif," tuturnya.
Dalam rapat tersebut Boediono menceritakan hasil pertemuan bank sentral se-Asia Pasifik yang dihadirinya beberapa waktu lalu di Kuala Lumpur, Malaysia.
Untuk asumsi pertumbuhan ekonomi 2009 Indonesia menurut BI adalah 4-5%. "Dengan downside risk atau risiko ke bawah cukup besar," jelasnya.
Untuk inflasi 2009 diperkirakan 5-7%, suku bunga SBI 3 bulan adalah 7,5%, dan nilai tukar rupiah Rp 11.000/US$.
Associated Press Oil tumbles below $34 a barrel on economic fears
COLUMBUS, Ohio (AP) -- Oil prices slid to a new low for the year Thursday because of growing doubts that the $789 billion stimulus package will reinvigorate the U.S. economy and demand for energy.
Crude supplies in the U.S. reached an 82-week high last week, according to the Department of Energy, showing just how far demand has fallen.
Light, sweet crude for March delivery tumbled $1.96, more than 5 percent, to settle at $33.98 a barrel on the New York Mercantile Exchange.
Since Monday, the price for a barrel of oil has fallen nearly 20 percent. Crude last settled below $34 a barrel two months ago.
Dispiriting economic news continues to depress energy prices because traders see consumers and businesses cutting back spending even further in coming months. more...
Crude supplies in the U.S. reached an 82-week high last week, according to the Department of Energy, showing just how far demand has fallen.
Light, sweet crude for March delivery tumbled $1.96, more than 5 percent, to settle at $33.98 a barrel on the New York Mercantile Exchange.
Since Monday, the price for a barrel of oil has fallen nearly 20 percent. Crude last settled below $34 a barrel two months ago.
Dispiriting economic news continues to depress energy prices because traders see consumers and businesses cutting back spending even further in coming months. more...
Reuters Obama mortgage plan news spurs late market rally
NEW YORK (Reuters) - Stocks staged a late rally to close mostly higher on Thursday after Reuters reported the Obama administration was working on a program to subsidize mortgage payments for troubled homeowners.The S&P 500 and Nasdaq ended higher while the Dow industrials retraced losses to close slightly lower as investors starved for good news bet the government had taken a big step toward stabilizing the housing market.
Banks and homebuilders, which had helped drag the market lower throughout the session, more than halved their losses after Reuters reported the government was working on a program that would help homeowners most in need before they fall into arrears.
"It's being viewed as a positive both for the mortgage industry and home building industry as well," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio. more...
Palmoil HQ Crude palm oil mostly lower on liquidation
Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives Bhd ended mostly lower yesterday on long liquidation and profit-taking, dealers said.
This was largely due to losses in crude oil and soyoil as both moved in tandem and competed for similar export destinations, they said.
“Overall, the fundamentals are weak due to slowing demand, especially from China. The downward equity market also further stressed the market,” one of the dealers said.
In a news report, India has assured that it will import more palm oil from Malaysia, which is now a leading exporter to the sub-continent economy.
At the close of CPO futures trading, February 2009 fell RM31 to RM1,970 per tonne, March 2009 declined RM15 to RM1,940 per tonne, April 2009 rose RM3 to RM1,928 per tonne and May 2009 went down RM5 to RM1,915 per tonne.
Yesterday’s volume stood at 10,276 lots, down from Wednesday’s volume of 17,768 lots.
Open interest increased slightly to 83,759 contracts from 83,715 contracts previously.
On the physical market, February South was slightly lower at RM1,950 per tonne compared to RM1,980 per tonne Wednesday.
Bloomberg Most U.S. Stocks Gain as Market Erases Tumble in Final Hour
Feb. 12 (Bloomberg) -- Most U.S. stocks rose as speculation the White House will help struggling mortgage borrowers led a rebound in banks and better-than-estimated results at Coca-Cola Co. spurred gains in consumer shares.The Standard & Poor’s 500 Index recovered from a 3.1 percent tumble in the final hour of trading, with banks in the gauge recouping most of an 11 percent slide. Coca-Cola, the largest soft-drink company, jumped 7.6 percent after higher European income and lower costs helped earnings top analysts’ estimates. The market’s earlier slide was spurred by a jump in jobless claims to a record and concern that Congress’s stimulus package will fail to revive the economy.
About ten stocks advanced for every nine that fell on the New York Stock Exchange. The S&P 500 added 0.2 percent to 835.19. The Dow slipped 6.77 points, or 0.1 percent, to 7,932.76, recovering most of a 245.55-point drop. more...
Palmoil HQ Palm Oil Heads for Second Weekly Gain as Stockpiles Decline
Palm oil futures in Malaysia headed for a second week of gains as stockpiles in the world’s second- biggest producer of the commodity dropped to a nine-month low.
Output of the vegetable oil in the Southeast Asian country fell in January for a second month to 1.33 million metric tons, the nation’s palm oil board said yesterday. This cut stockpiles 8.3 percent to 1.83 million tons.
The drop in stockpiles “moves the industry one more step away from the over-supply situation,” said a research report by ECM Libra Capital Sdn. in Kuala Lumpur.
April-delivery palm oil gained 0.2 percent to 1,928 ringgit ($533) a metric ton on the Malaysia Derivatives Exchange. Earlier, futures gained as much as 1 percent to 1,945 ringgit.
Production of the tropical oil typically peaks in the second half of the year. Yesterday’s data shows output likely peaked in November, easing concerns about output exceeding demand during a global recession. Both Malaysia and Indonesia, which control 90 percent of world output, had record production in 2008.
Palm oil may average 2,000 ringgit this year on “improved supply-demand dynamics,” according to an AmResearch report from Kuala Lumpur. Prices have averaged 1,861 ringgit this year.
Futures climbed to a four-week high this week after drought damaged soybean crops in South America, the biggest exporters of the vegetable oil crushed from the oilseed. Palm and soybean oils are substitutes.
“There’s an upside to crude palm oil prices if the supply of competing oils tightens,” Citigroup Inc. analyst Penny Yaw said today.
Soybean oil futures for March delivery was unchanged at 33.2 cents a pound at 6:03 p.m. Singapore time in after-hours trading on the Chicago Board of Trade. That left the commodity 37 percent more expensive than palm, according to Bloomberg data.
Palm oil’s appeal lies in the substantial discount it trades at compared with soybean oil, said Alvin Tai, an analyst at OSK Research Sdn. in Kuala Lumpur today.
Output of the vegetable oil in the Southeast Asian country fell in January for a second month to 1.33 million metric tons, the nation’s palm oil board said yesterday. This cut stockpiles 8.3 percent to 1.83 million tons.
The drop in stockpiles “moves the industry one more step away from the over-supply situation,” said a research report by ECM Libra Capital Sdn. in Kuala Lumpur.
April-delivery palm oil gained 0.2 percent to 1,928 ringgit ($533) a metric ton on the Malaysia Derivatives Exchange. Earlier, futures gained as much as 1 percent to 1,945 ringgit.
Production of the tropical oil typically peaks in the second half of the year. Yesterday’s data shows output likely peaked in November, easing concerns about output exceeding demand during a global recession. Both Malaysia and Indonesia, which control 90 percent of world output, had record production in 2008.
Palm oil may average 2,000 ringgit this year on “improved supply-demand dynamics,” according to an AmResearch report from Kuala Lumpur. Prices have averaged 1,861 ringgit this year.
Futures climbed to a four-week high this week after drought damaged soybean crops in South America, the biggest exporters of the vegetable oil crushed from the oilseed. Palm and soybean oils are substitutes.
“There’s an upside to crude palm oil prices if the supply of competing oils tightens,” Citigroup Inc. analyst Penny Yaw said today.
Soybean oil futures for March delivery was unchanged at 33.2 cents a pound at 6:03 p.m. Singapore time in after-hours trading on the Chicago Board of Trade. That left the commodity 37 percent more expensive than palm, according to Bloomberg data.
Palm oil’s appeal lies in the substantial discount it trades at compared with soybean oil, said Alvin Tai, an analyst at OSK Research Sdn. in Kuala Lumpur today.
Kamis, 12 Februari 2009
Detikfinance Laba Bersih Danamon Turun 28%
Jakarta - PT Bank Danamon Tbk membukukan laba bersih setelah pajak di tahun 2008 sebesar Rp 1,53 triliun, turun 28% dibandingkan laba bersih tahun 2007 yang mencapai Rp 2,117 triliun.
Demikian disampaikan Direktur Keuangan Bank Danamon Vera Eve Lim dalam konferensi pers di Gran Melia, Jakarta, Kamis (12/2/2009).
Pendapatan bunga bersih Bank Danamon di tahun 2008 tercatat sebesar Rp 8,354 triliun, naik 17% dibandingkan tahun 2007 yang sebesar Rp 7,136 triliun. Pendapatan operasional di tahun 2008 tercatat sebesar Rp 10,35 triliun naik 17% dibandingkan tahun 2007 yang sebesar Rp 8,877 triliun.
Beban operasional Bank Danamon di tahun 2008 mencapai Rp 5,604 triliun, naik 32% dari tahun 2007 sebesar Rp 4,255 triliun. Total kredit yang diberikan tercatat sebesar Rp 66,898 triliun, naik 25% dibandingkan tahun 2007 yang sebesar Rp 53,33 triliun.
Dana Pihak Ketiga (DPK) tahun 2008 mencapai Rp 75,373 triliun naik 27% dari tahun 2007 sebesar Rp 59,528 triliun. Total aset sebesar Rp 107,268 triliun naik 20% dari tahun 2007 yang sebesar Rp 89,41 triliun.
Marjin bunga bersih 11,1% naik 0,7% dibandingkan tahun 2007 sebesar 10,4%. NPL gross 2,3% naik 0,1% dari tahun sebelumnya 2,2%.
(qom/lih)
Demikian disampaikan Direktur Keuangan Bank Danamon Vera Eve Lim dalam konferensi pers di Gran Melia, Jakarta, Kamis (12/2/2009).
Pendapatan bunga bersih Bank Danamon di tahun 2008 tercatat sebesar Rp 8,354 triliun, naik 17% dibandingkan tahun 2007 yang sebesar Rp 7,136 triliun. Pendapatan operasional di tahun 2008 tercatat sebesar Rp 10,35 triliun naik 17% dibandingkan tahun 2007 yang sebesar Rp 8,877 triliun.
Beban operasional Bank Danamon di tahun 2008 mencapai Rp 5,604 triliun, naik 32% dari tahun 2007 sebesar Rp 4,255 triliun. Total kredit yang diberikan tercatat sebesar Rp 66,898 triliun, naik 25% dibandingkan tahun 2007 yang sebesar Rp 53,33 triliun.
Dana Pihak Ketiga (DPK) tahun 2008 mencapai Rp 75,373 triliun naik 27% dari tahun 2007 sebesar Rp 59,528 triliun. Total aset sebesar Rp 107,268 triliun naik 20% dari tahun 2007 yang sebesar Rp 89,41 triliun.
Marjin bunga bersih 11,1% naik 0,7% dibandingkan tahun 2007 sebesar 10,4%. NPL gross 2,3% naik 0,1% dari tahun sebelumnya 2,2%.
(qom/lih)
Bloomberg Indonesia Raises Coal Miners’ Domestic Quota to Meet Demand
Indonesia Raises Coal Miners’ Domestic Quota to Meet Demand
> 2009-02-12 07:24:21.246 GMT By Bambang Dwi Djanuarto
Feb. 12 (Bloomberg) -- Indonesia, the world’s biggest exporter of power-station coal, raised the volume that producers must set aside for domestic users by 45 percent this year to meet the nation’s demand.
Coal miners have to sell 68.3 million metric tons of their combined output to local utilities, Bambang Setiawan, director general of minerals, coal and geothermal at the energy ministry, told reporters in Jakarta today. That’s an increase from a November estimate of 47 million tons.
For Related News and Information:
Top energy stories: ETOP
Most-read stories on Indonesia: MNI INDO
--Editor: Jane Lee.
> 2009-02-12 07:24:21.246 GMT By Bambang Dwi Djanuarto
Feb. 12 (Bloomberg) -- Indonesia, the world’s biggest exporter of power-station coal, raised the volume that producers must set aside for domestic users by 45 percent this year to meet the nation’s demand.
Coal miners have to sell 68.3 million metric tons of their combined output to local utilities, Bambang Setiawan, director general of minerals, coal and geothermal at the energy ministry, told reporters in Jakarta today. That’s an increase from a November estimate of 47 million tons.
For Related News and Information:
Top energy stories: ETOP
Most-read stories on Indonesia: MNI INDO
--Editor: Jane Lee.
Bloomberg Telkom Indonesia’s Mobile-Phone Subscribers Rose 36% Last Year
Telkom Indonesia’s Mobile-Phone Subscribers Rose 36% Last Year
2009-02-12 05:11:33.510 GMT By Widya Utami
Feb. 12 (Bloomberg) -- PT Telekomunikasi Indonesia’s mobile phone unit had 65.3 million subscribers as of Dec. 31, up 36 percent from 2007, the company said.
Telekomunikasi’s cheaper mobile-phone service, known as “Flexi,” had 12.7 million subscribers as of last year compared with 6.4 millions in 2007, the company said in a presentation to analysts in Jakarta today.
For Related News and Information:
Most read Indonesian stories: MNI INDO 1W Search for Indonesian
stories: NSE INDONESIA
2009-02-12 05:11:33.510 GMT By Widya Utami
Feb. 12 (Bloomberg) -- PT Telekomunikasi Indonesia’s mobile phone unit had 65.3 million subscribers as of Dec. 31, up 36 percent from 2007, the company said.
Telekomunikasi’s cheaper mobile-phone service, known as “Flexi,” had 12.7 million subscribers as of last year compared with 6.4 millions in 2007, the company said in a presentation to analysts in Jakarta today.
For Related News and Information:
Most read Indonesian stories: MNI INDO 1W
stories: NSE INDONESIA
Mansek Hexindo
Securing a piece of the whole KPC pie
Hexindo Adiperkasa (HEXA) confirmed that a US$130mn deal with Kaltim Prima Coal (KPC) has been signed. We revised our FY09F earnings estimates by 33.0% to Rp205bn (-7.2% yoy), taking account the KPC deal. We believe that risk of low unit sales, expectation on poor earnings, and limited liquidity have been reflected in current price, which is now trading at a low PER09F of 2.5x. Thus, we upgrade our recommendation to Buy from erstwhile Sell with new target price to Rp760/share, providing an attractive upside of 26.7%.
Hexindo Adiperkasa (HEXA) confirmed that a US$130mn deal with Kaltim Prima Coal (KPC) has been signed. We revised our FY09F earnings estimates by 33.0% to Rp205bn (-7.2% yoy), taking account the KPC deal. We believe that risk of low unit sales, expectation on poor earnings, and limited liquidity have been reflected in current price, which is now trading at a low PER09F of 2.5x. Thus, we upgrade our recommendation to Buy from erstwhile Sell with new target price to Rp760/share, providing an attractive upside of 26.7%.
CLSA UNTR vs HEXA
United Tractors (UNTR IJ) Coal mines do not stop expansion..
Hexindo (HEXA IJ) has received US$130m purchasing order from Kaltim Prima Coal for excavator and dump truck to be delivered in 2009. This is compared to Hexindo revenues of US$220m in 9m08.
It clearly shows that demand for heavy equipments are not completely dead as feared by many. Large and good coal mines are still keen to expand. This also reflected in recent contract renewal for United Tractors's contract mining unit (Pama) which called for volume ramp up from 8m tons per annum in 2008 to 12m tons per annum over the next few fears.
Our conservative forecast assumed UT's heavy equipment sales to fall from 4,348 units in 2008 to 2,500 units in 2009.
BUY United Tractors (US$1.6bn mkt cap, decent liquidity) and Hexindo (US$50m mkt cap, relatively illiquid).
Hexindo (HEXA IJ) has received US$130m purchasing order from Kaltim Prima Coal for excavator and dump truck to be delivered in 2009. This is compared to Hexindo revenues of US$220m in 9m08.
It clearly shows that demand for heavy equipments are not completely dead as feared by many. Large and good coal mines are still keen to expand. This also reflected in recent contract renewal for United Tractors's contract mining unit (Pama) which called for volume ramp up from 8m tons per annum in 2008 to 12m tons per annum over the next few fears.
Our conservative forecast assumed UT's heavy equipment sales to fall from 4,348 units in 2008 to 2,500 units in 2009.
BUY United Tractors (US$1.6bn mkt cap, decent liquidity) and Hexindo (US$50m mkt cap, relatively illiquid).
Danareksa Malaysia’s Jan 09 CPO industry results
Good news: Malaysia’s Jan 09 inventory is down 8% mom
Malaysia’s Jan 09 CPO inventory dropped 8% mom to 1.83mn tons. Inventory declined even though demand was lower as indicated by the 17% drop in exports to 1.35mn tons. As a result, inventory is now at a 9-month low and way below its all-time high of 2.27mn tons in Nov 08. Note that Malaysia is the world’s second largest CPO producer and is expected by Oilworld to produce about 17.9mn tons of CPO this year. Malaysia’s share of the world market for CPO is about 40%.
Bad news 1: the low production is due to cyclical factors
The decline in inventory has been helped by the drop in production. CPO production in Jan 09 declined 10% mom to 1.33mn tons. However, we believe the decline in inventory is not because of Malaysia’s replanting program or the country’s ability to increase domestic demand but because of the cyclical nature of the business since CPO production is usually lower in the first half of the year.
Bad news 2: lower demand is here to stay
We also believe that demand for CPO will remain at low levels. The collapse in crude oil prices and slower global economic growth are the main reasons. This prognosis is supported by the latest findings of the cargo surveyors Intertek and SGS which reported that Malaysia’s CPO exports were down by 15% and 3% mom, respectively, in the period of 1-10 Feb 09.
Maintain UNDERWEIGHT
Overall, we maintain our negative stance on the industry. We take this view because: (1) replanting and higher domestic demand in Malaysia and Indonesia has not kicked in yet, (2) global demand is expected to remain weak, and (3) Indonesia’s numbers, especially its production and inventory, are unknown (note that Indonesia is the biggest CPO producer). The main risks to our recommendation are bad weather and lower soybean supply.
Malaysia’s Jan 09 CPO inventory dropped 8% mom to 1.83mn tons. Inventory declined even though demand was lower as indicated by the 17% drop in exports to 1.35mn tons. As a result, inventory is now at a 9-month low and way below its all-time high of 2.27mn tons in Nov 08. Note that Malaysia is the world’s second largest CPO producer and is expected by Oilworld to produce about 17.9mn tons of CPO this year. Malaysia’s share of the world market for CPO is about 40%.
Bad news 1: the low production is due to cyclical factors
The decline in inventory has been helped by the drop in production. CPO production in Jan 09 declined 10% mom to 1.33mn tons. However, we believe the decline in inventory is not because of Malaysia’s replanting program or the country’s ability to increase domestic demand but because of the cyclical nature of the business since CPO production is usually lower in the first half of the year.
Bad news 2: lower demand is here to stay
We also believe that demand for CPO will remain at low levels. The collapse in crude oil prices and slower global economic growth are the main reasons. This prognosis is supported by the latest findings of the cargo surveyors Intertek and SGS which reported that Malaysia’s CPO exports were down by 15% and 3% mom, respectively, in the period of 1-10 Feb 09.
Maintain UNDERWEIGHT
Overall, we maintain our negative stance on the industry. We take this view because: (1) replanting and higher domestic demand in Malaysia and Indonesia has not kicked in yet, (2) global demand is expected to remain weak, and (3) Indonesia’s numbers, especially its production and inventory, are unknown (note that Indonesia is the biggest CPO producer). The main risks to our recommendation are bad weather and lower soybean supply.
Bloomberg Palm Oil Rises as Inventory Falls Amid Seasonal Production Low
Feb. 12 (Bloomberg) -- Palm oil futures in Malaysia gained after stockpiles in the world’s second-biggest producer of the commodity dropped to a nine-month low.
Output of the vegetable oil in the Southeast Asian country fell in January for a second month to 1.33 million metric tons, the nation’s palm oil board said yesterday. This cut stockpiles 8.3 percent to 1.83 million tons.
“Short-term fundamentals have improved,” according to a report by Maybank Investment Bank today. Production dropped as rain in the eastern states of Sabah and Sarawak reduced yields.
Palm oil for April delivery gained as much as 1 percent to 1,945 ringgit ($418) a metric ton on the Malaysia Derivatives Exchange. It was little changed at 1,925 ringgit at the midday break in trading. more...
Output of the vegetable oil in the Southeast Asian country fell in January for a second month to 1.33 million metric tons, the nation’s palm oil board said yesterday. This cut stockpiles 8.3 percent to 1.83 million tons.
“Short-term fundamentals have improved,” according to a report by Maybank Investment Bank today. Production dropped as rain in the eastern states of Sabah and Sarawak reduced yields.
Palm oil for April delivery gained as much as 1 percent to 1,945 ringgit ($418) a metric ton on the Malaysia Derivatives Exchange. It was little changed at 1,925 ringgit at the midday break in trading. more...
Detikfinance BRI Targetkan Kredit untuk BUMN di 2009 Capai Rp 30 Triliun
Jakarta - PT Bank Rakyat Indonesia Tbk (BRI) mentargetkan pengucuran kredit untuk nasabah Badan Usaha Milik Negara (BUMN) bisa mencapai Rp 30 triliun tahun ini.
Demikian hal itu dikemukakan oleh Direktur Bisnis Kelembagaan BRI Aswandi Syam usai melakukan penandatanganan kerjasama dengan PT Jiwasraya dan PT Jasindo di Kantor Pusat BRI, Jalan Jenderal Sudirman, Jakarta, Kamis (12/2/2009). "Untuk tahun ini kita berharap bisa mengucurkan kredit untuk BUMN hingga Rp 27-30 triliun tahun ini," ujarnya. Menurutnya, hingga akhir 2008, kucuran kredit BUMN sudah mencapai Rp 16,5 triliun dengan NPL sebesar 0 persen. Jumlah ini masih di bawah plafon yang disediakan sebanyak Rp 22 triliun pada tahun lalu. Maka dari itu, perseroan mencoba menggenjot lebih banyak kucuran kredit kepada BUMN.
Ia menambahkan, suku bunga yang diberikan kepada BUMN tersebut berbeda-beda tergantung dari risiko proyek yang dilakukan BUMN yang bersangkutan. Kisaran suku bunganya sendiri sebesar 14 persen.Ia mengatakan, perusahaan plat merah yang saat ini sudah berkomitmen mengambil pinjaman dari BRI mencapai 47 perusahaan. "Sebagian dari jumlah itu ada yang melakukan kerjasama juga dengan kita, jadi total ada 90 BUMN," ujarnya. more...
Demikian hal itu dikemukakan oleh Direktur Bisnis Kelembagaan BRI Aswandi Syam usai melakukan penandatanganan kerjasama dengan PT Jiwasraya dan PT Jasindo di Kantor Pusat BRI, Jalan Jenderal Sudirman, Jakarta, Kamis (12/2/2009). "Untuk tahun ini kita berharap bisa mengucurkan kredit untuk BUMN hingga Rp 27-30 triliun tahun ini," ujarnya. Menurutnya, hingga akhir 2008, kucuran kredit BUMN sudah mencapai Rp 16,5 triliun dengan NPL sebesar 0 persen. Jumlah ini masih di bawah plafon yang disediakan sebanyak Rp 22 triliun pada tahun lalu. Maka dari itu, perseroan mencoba menggenjot lebih banyak kucuran kredit kepada BUMN.
Ia menambahkan, suku bunga yang diberikan kepada BUMN tersebut berbeda-beda tergantung dari risiko proyek yang dilakukan BUMN yang bersangkutan. Kisaran suku bunganya sendiri sebesar 14 persen.Ia mengatakan, perusahaan plat merah yang saat ini sudah berkomitmen mengambil pinjaman dari BRI mencapai 47 perusahaan. "Sebagian dari jumlah itu ada yang melakukan kerjasama juga dengan kita, jadi total ada 90 BUMN," ujarnya. more...
Associated Press Congress, Obama clear way for huge stimulus
WASHINGTON (AP) -- Moving with lightning speed, the Democratic-controlled Congress and White House agreed Wednesday on a compromise $790 billion economic stimulus bill designed to create millions of jobs in a nation reeling from recession. President Barack Obama could sign the measure within days."More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers," said Senate Majority Leader Harry Reid at a Capitol news conference where he was joined by moderates from both parties whose support is essential for the legislation's final passage.
House Speaker Nancy Pelosi, D-Calif., Reid's partner in negotiations over more than 24 intense hours, initially withheld her approval in a lingering disagreement over federal funding for school construction. "We had to make sure the investment in education" was in the bill, she said.
Obama, who has campaigned energetically for legislation, welcomed the agreement in a written statement that said it would "save or create more than 3.5 million jobs and get our economy back on track." more...
Detikfinance Bakrie Minta Waktu Bayar Repo PNM Hingga Mei 2009
Jakarta - PT Bakrie & Brothers Tbk (BNBR) meminta perpanjangan waktu penyelesaian repurchase agreement (repo/gadai efek/surat berharga) ke PNM Investment Management paling lambat Mei 2009 setelah gagal membayar pada saat jatuh tempo.
Jumlah sisa repo Bakre ke PNM Investment Management sebesar Rp 203,484 miliar yang terdiri dari dua fasilitas repo. Kedua fasilitas repo tersebut jatuh tempo pada 19 Januari dan 9 Februari 2009.
Demikian dikatakan Direktur dan Corporate Secretary Bakrie & Brothers, RA Sri Dharmayanti dalam keterbukaan informasi ke Bursa Efek Indonesia, Kamis (12/2/2009).
"Belum dibayarkannya repo itu karena perseroan sedang mengupayakan refinancing atau nasionalisasi aset yang ternyata penyelesaiannya tidak secepat yang diharapkan," kata Sri.
Untuk membayar utang ke anak perusahaan pelat merah PT Permodalan Nasional Madani (PNM) itu, Bakrie mengaku sedang mengupayakan proses refinancing atau rasionalisasi aset yang hasilnya akan dialokasikan untuk penyelesaian kewajiban perseroan termasuk repo lokal.(ir/ir)
Jumlah sisa repo Bakre ke PNM Investment Management sebesar Rp 203,484 miliar yang terdiri dari dua fasilitas repo. Kedua fasilitas repo tersebut jatuh tempo pada 19 Januari dan 9 Februari 2009.
Demikian dikatakan Direktur dan Corporate Secretary Bakrie & Brothers, RA Sri Dharmayanti dalam keterbukaan informasi ke Bursa Efek Indonesia, Kamis (12/2/2009).
"Belum dibayarkannya repo itu karena perseroan sedang mengupayakan refinancing atau nasionalisasi aset yang ternyata penyelesaiannya tidak secepat yang diharapkan," kata Sri.
Untuk membayar utang ke anak perusahaan pelat merah PT Permodalan Nasional Madani (PNM) itu, Bakrie mengaku sedang mengupayakan proses refinancing atau rasionalisasi aset yang hasilnya akan dialokasikan untuk penyelesaian kewajiban perseroan termasuk repo lokal.(ir/ir)
Kim Eng Ramayana Target Price is Rp650 (43% potential upside)
Ramayana reported sales were up 0.4% YoY to Rp336.5b in Jan 09. Same-store growth was in negative territory of -2.1%, the first negative SSG since July 2007. This was worse than the company’s guideline of 0.3% and our assumption of 0%. Although we assume a zero SSG, we still expect sales to grow by 4.1% this year, on the back of four new stores opening, fewer than management guideline of six new stores. Other drivers for sales growth this year is the election, government economy stimulus and wage increase which we believe could help purchasing power especially middle-low consumers. Maintain BUY, target price is Rp650 (43% potential upside).
Sales volume of 4W in January 09 fell by 22% YoY to 32,167 units. Toyota is reported gaining market share to around 40% compared to 33% in January 08. Sales volume drop in January 09 is lower than industry expectation of 32%. We see that slower economic growth, lower commodity prices as well as tight liquidity in banking sector discourage buyers to purchase big ticket items. We maintain HOLD recommendation on
Sales volume of 4W in January 09 fell by 22% YoY to 32,167 units. Toyota is reported gaining market share to around 40% compared to 33% in January 08. Sales volume drop in January 09 is lower than industry expectation of 32%. We see that slower economic growth, lower commodity prices as well as tight liquidity in banking sector discourage buyers to purchase big ticket items. We maintain HOLD recommendation on
Bahana ITMG HOLD (Changed from Reduce) TP: IDR8,900 (From IDR8,500)
Greater operating efficiencies in the cards
In 2009, Indo Tambang Raya (ITMG) is set to enjoy greater cost savings and operating efficiencies as the company’s new coal-fired power plant will be operational by April 2009. This will be used to replace current generators that are running with diesel oil to supply electricity for conveyor belts in IMM port and crushing plant at East block. Total cost savings should be around USD2m per annum.
Lower than expected 2008 volume could continue into 2009
On a more negative note, ITMG did not reached its 19.5m tons sales target in 2008. However, with the actual number still undisclosed, we maintain our volume estimate at 18.6m tons. The lower sales realization than initial estimate was caused by weakening demand. Because slower demand is
likely to persist into 2009, we expect ITMG’s volume to remain stagnant at 18.6m tons, compared to the company’s 2009 target of 20.5m tons.
HOLD with TP of IDR8,900
We remain negative on the coal sector as we believe coal price will further come off, supported by recent news that South Korean utilities have drawn contracts with Australian coal producers at USD70/ton including freight costs. This coupled with possible disappointment on weaker than expected volumes, we rate ITMG a HOLD. Our DCF-based TP of IDR8,900 is derived using 17.7% WACC, 3% long-term growth rate and 8% risk premium.
In 2009, Indo Tambang Raya (ITMG) is set to enjoy greater cost savings and operating efficiencies as the company’s new coal-fired power plant will be operational by April 2009. This will be used to replace current generators that are running with diesel oil to supply electricity for conveyor belts in IMM port and crushing plant at East block. Total cost savings should be around USD2m per annum.
Lower than expected 2008 volume could continue into 2009
On a more negative note, ITMG did not reached its 19.5m tons sales target in 2008. However, with the actual number still undisclosed, we maintain our volume estimate at 18.6m tons. The lower sales realization than initial estimate was caused by weakening demand. Because slower demand is
likely to persist into 2009, we expect ITMG’s volume to remain stagnant at 18.6m tons, compared to the company’s 2009 target of 20.5m tons.
HOLD with TP of IDR8,900
We remain negative on the coal sector as we believe coal price will further come off, supported by recent news that South Korean utilities have drawn contracts with Australian coal producers at USD70/ton including freight costs. This coupled with possible disappointment on weaker than expected volumes, we rate ITMG a HOLD. Our DCF-based TP of IDR8,900 is derived using 17.7% WACC, 3% long-term growth rate and 8% risk premium.
Mansek BTEL: To raise tower price by ±20%
BTEL: To raise tower price by ±20% and plans to announce tender winner by end of Feb09 (BTEL,Rp50,Buy, TP:Rp75)
BTEL increase the sales price for their towers by as much as 20% without any additional cost. The company is still in the stage of negotiations between management and the buyers. Initially, the expected sales proceeds was Rp380bn, but with higher sales price, BTEL may get as much funding of Rp456bn from the sale of these towers. BTEL will leaseback the towers.
There are six companies interested in buying the BTEL towers. They are PT Tunas Solusi Pratama, PT Tower Bersama, PT Profesional Telekomunikasi Indonesia (Protelindo), PT Retower, Rice Marketel PT, and PT Power Telecom (Powertel). BTEL intends announces winners of tender end of Feb09.
Currently, BTEL is operating with a base of 2,490 towers of 30% (747 towers) are only owed by BTEL rest is under collocation. Hence, out of the 747 tower BTEL owns, it plans to sell around 72% of it (543 units).
Funds expected from sale is around Rp456bn. Net increase in opex would by Rp14bn but if we offset it by notional interest cost (around Rp68.4bn) assuming debt was raised to the amount of Rp456bn to fund capex, there will be net cost saving of Rp54.4bn. If we fine tune our FY09F to factor in the effect of tower sales (i.e taking a gain of Rp202bn as we assume a book value of the tower at Rp254bn) we arrive at net profit of Rp344bn (+73.3% from our current forecast). EPS would rise from Rp7.0/share to Rp12.1/share and hence PER09F falls from 7.6x to 4.1x.
BTEL increase the sales price for their towers by as much as 20% without any additional cost. The company is still in the stage of negotiations between management and the buyers. Initially, the expected sales proceeds was Rp380bn, but with higher sales price, BTEL may get as much funding of Rp456bn from the sale of these towers. BTEL will leaseback the towers.
There are six companies interested in buying the BTEL towers. They are PT Tunas Solusi Pratama, PT Tower Bersama, PT Profesional Telekomunikasi Indonesia (Protelindo), PT Retower, Rice Marketel PT, and PT Power Telecom (Powertel). BTEL intends announces winners of tender end of Feb09.
Currently, BTEL is operating with a base of 2,490 towers of 30% (747 towers) are only owed by BTEL rest is under collocation. Hence, out of the 747 tower BTEL owns, it plans to sell around 72% of it (543 units).
Funds expected from sale is around Rp456bn. Net increase in opex would by Rp14bn but if we offset it by notional interest cost (around Rp68.4bn) assuming debt was raised to the amount of Rp456bn to fund capex, there will be net cost saving of Rp54.4bn. If we fine tune our FY09F to factor in the effect of tower sales (i.e taking a gain of Rp202bn as we assume a book value of the tower at Rp254bn) we arrive at net profit of Rp344bn (+73.3% from our current forecast). EPS would rise from Rp7.0/share to Rp12.1/share and hence PER09F falls from 7.6x to 4.1x.
Mansek Bakrieland
Bakrieland: January sales start slow but toll project running ahead of scheduled completion (ELTY, Rp79, Buy, TP: Rp200)
Bakrieland is off to a modest start in 09 with Bogor unit sales of about 40units (vs ave monthly sales in 08 of 70 units but still higher to 07 ave of 33 units).
On its CBD projects Bakrie Tower and the Lifesytle Center is expected to be turned over to buyers by 2Q09, within the scheduled time-frame, sales backlog from this two projects is about Rp360bn (about 30% of ELTY’s sales backlog as of end 08). Full cash infusion of Limitless is imminent (about 30% of the US$100mn is in the books as of end08, while the balance is expected to come on stream soon), thus bringing in fresh funds to secure progress of on-going projects.
While housing sales have slowed down in January, the 35km Kanci-Pejagan toll road project is running ahead of scheduled completion by two months and could start commercial operation by late 2Q09. Thus, revenue contribution from this can start coming on stream by late 3Q09, the earliest. Once operation normalizes, we expect some 10-13% contribution to revenues coming from this segment annually. Talks are still on-going on three other toll road concessions covering some Rp185km in road length. Based on our computations, each kilometre built adds about Rp2.1/share to our NAV which currently stands Rp504/share, including Kanci Pejagan but without the additional 3 toll roads.
At current prices, the stock trades at 84.3% discount (the steepest among our property counters) to our stripped down FY09F NAV, while showing a 153% upside to our TP of Rp200/share. Maintain Buy.
Bakrieland is off to a modest start in 09 with Bogor unit sales of about 40units (vs ave monthly sales in 08 of 70 units but still higher to 07 ave of 33 units).
On its CBD projects Bakrie Tower and the Lifesytle Center is expected to be turned over to buyers by 2Q09, within the scheduled time-frame, sales backlog from this two projects is about Rp360bn (about 30% of ELTY’s sales backlog as of end 08). Full cash infusion of Limitless is imminent (about 30% of the US$100mn is in the books as of end08, while the balance is expected to come on stream soon), thus bringing in fresh funds to secure progress of on-going projects.
While housing sales have slowed down in January, the 35km Kanci-Pejagan toll road project is running ahead of scheduled completion by two months and could start commercial operation by late 2Q09. Thus, revenue contribution from this can start coming on stream by late 3Q09, the earliest. Once operation normalizes, we expect some 10-13% contribution to revenues coming from this segment annually. Talks are still on-going on three other toll road concessions covering some Rp185km in road length. Based on our computations, each kilometre built adds about Rp2.1/share to our NAV which currently stands Rp504/share, including Kanci Pejagan but without the additional 3 toll roads.
At current prices, the stock trades at 84.3% discount (the steepest among our property counters) to our stripped down FY09F NAV, while showing a 153% upside to our TP of Rp200/share. Maintain Buy.
Mansek Ciputra Development
Ciputra Development: Marketing sales off to a poor start in Jan09 (CTRA, Rp300, Buy, TP: Rp390)
Amidst the difficult environment, CTRA posted January marketing sales of Rp56.7bn (-49%yoy and -25%mom). Lower sales from both CTRA and CTRS contributed to the lower sales level. Again, its new CBD properties via CTRP failed to book any sales in January, thus marking the 3rd consecutive month of zero sales.
The company has targeted a total of Rp1.6tn in marketing sales for FY09, 14% higher from FY08 marketing sales. With BI rates easing, the pressure lower mortgage is more than heightened, which will hopefully stir up renewed demand.
Note that the impact of FY09 marketing sales will only partially reflect in the books by 2010. Chunk of projected revenues in 2009 will come from the Rp1.4tn marketing sales of 2008. Thus, we maintain our revenue and net income growth of 11% and 12% respectively. Buy for CTRA as the stock still shows a 30.0% upside to our TP while trading at a 69% discount to our stripped down NAV09F.
Amidst the difficult environment, CTRA posted January marketing sales of Rp56.7bn (-49%yoy and -25%mom). Lower sales from both CTRA and CTRS contributed to the lower sales level. Again, its new CBD properties via CTRP failed to book any sales in January, thus marking the 3rd consecutive month of zero sales.
The company has targeted a total of Rp1.6tn in marketing sales for FY09, 14% higher from FY08 marketing sales. With BI rates easing, the pressure lower mortgage is more than heightened, which will hopefully stir up renewed demand.
Note that the impact of FY09 marketing sales will only partially reflect in the books by 2010. Chunk of projected revenues in 2009 will come from the Rp1.4tn marketing sales of 2008. Thus, we maintain our revenue and net income growth of 11% and 12% respectively. Buy for CTRA as the stock still shows a 30.0% upside to our TP while trading at a 69% discount to our stripped down NAV09F.
Mansek Cement sector: Domestic January Sales Volume Drop 3.8% yoy
Cement sector: Domestic January sales volume drop 3.8% yoy
ASI data shows that January’s domestic sales volume is slightly lower than previous year, by approximately 3.8% yoy. Area which posted the highest drop is Nusa Tenggara, and followed by Java of around 6.0% yoy. As export fell significantly, by 56.1% yoy, total production showed a decline of 10.5% yoy.
Nonetheless, price increase was reported, of around 23.1% yoy or 8.9% mom. Therefore, it could offset declining volume in January. Assuming selling prices remains the same throughout the year, average price growth may exceed 15.0% yoy. It would be an upside from our forecast as we only expect a 6.0% yoy growth.
Among the 3 biggest cement producers in the country, Indocement (INTP, Rp4,500, Neutral, TP Rp4,500) posted the biggest volume drop of 15.7% yoy, followed by Holcim Indonesia (SMCB, Rp540, Neutral, TP Rp675) of 12.0% yoy. While Semen Gresik (SMGR, Rp3,535, Sell, TP Rp3,000) only booked a moderate volume drop by 1.2% yoy. A significant fall in Java was the main reason behind it, as the area contributes more
than 70% of total production.
In the past 10 years, average January-to-full year sales is at 7.2%, with highest and lowest figures of 8.35% and 5.27%, respectively. By applying that number, FY09F domestic sales may reach 41.2 mn tons, or 8.3% yoy higher compared with FY08. If realized, it may give an upside to our forecast, as we only apply a 3.0% yoy growth this year. However, if we use the 5-years average figure, FY09F growth may come at 3.1% yoy, which is inline with ours. We maintain Neutral on the sector.
ASI data shows that January’s domestic sales volume is slightly lower than previous year, by approximately 3.8% yoy. Area which posted the highest drop is Nusa Tenggara, and followed by Java of around 6.0% yoy. As export fell significantly, by 56.1% yoy, total production showed a decline of 10.5% yoy.
Nonetheless, price increase was reported, of around 23.1% yoy or 8.9% mom. Therefore, it could offset declining volume in January. Assuming selling prices remains the same throughout the year, average price growth may exceed 15.0% yoy. It would be an upside from our forecast as we only expect a 6.0% yoy growth.
Among the 3 biggest cement producers in the country, Indocement (INTP, Rp4,500, Neutral, TP Rp4,500) posted the biggest volume drop of 15.7% yoy, followed by Holcim Indonesia (SMCB, Rp540, Neutral, TP Rp675) of 12.0% yoy. While Semen Gresik (SMGR, Rp3,535, Sell, TP Rp3,000) only booked a moderate volume drop by 1.2% yoy. A significant fall in Java was the main reason behind it, as the area contributes more
than 70% of total production.
In the past 10 years, average January-to-full year sales is at 7.2%, with highest and lowest figures of 8.35% and 5.27%, respectively. By applying that number, FY09F domestic sales may reach 41.2 mn tons, or 8.3% yoy higher compared with FY08. If realized, it may give an upside to our forecast, as we only apply a 3.0% yoy growth this year. However, if we use the 5-years average figure, FY09F growth may come at 3.1% yoy, which is inline with ours. We maintain Neutral on the sector.
CIMB What's on the table "Jasa Marga"
Quick Takes – Jasa Marga – Unhurt by slowing economy
JSMR's traffic volume in 4Q08 was flat qoq, despite a qoq contraction in GDP. Traffic volume in Indonesia is likely to be recession-proof as toll roads are mainly used for in-town travel and are regarded as necessities. JSMR’s credit-worthiness should also not be affected by the CMNP default as it has a solid credit history. In spite of its resilience, we remain Neutral as we see a lack of near-term catalysts. Maintain DCF-based target price of Rp1,050.
JSMR's traffic volume in 4Q08 was flat qoq, despite a qoq contraction in GDP. Traffic volume in Indonesia is likely to be recession-proof as toll roads are mainly used for in-town travel and are regarded as necessities. JSMR’s credit-worthiness should also not be affected by the CMNP default as it has a solid credit history. In spite of its resilience, we remain Neutral as we see a lack of near-term catalysts. Maintain DCF-based target price of Rp1,050.
CLSA Bank Mandiri (BMRI IJ)
Bank Mandiri (BMRI IJ)
Our analyst Nico has prepared a note on Bank Mandiri (BMRI IJ) which presented at our Vegas forum yesterday (note attached).
Having seen its nonperforming loans carved-out during a post-Asia Crisis recapitalisation in 1999‚ the bank's balance sheet remains underutilised with a loan/deposit ratio (LDR) of 63%‚ while government bonds account for 29% of total assets. Recent loan restructuring and recovery efforts have also helped reduce Mandiri's gross non-performing loan ratio to below 5% from a peak of 25% in 2005. Improving asset utilisation‚ coupled with declining nonperforming loans‚ should continue to improve the bank's profitability over the next few years.
Feedback from the Forum
The focus was on what they've achieved since the merger with 3 other banks, and their business goals out to 2012.
Market share is now an impressive 25% in corp lending and corp deposits.
Corp loans made up nearly all of the asset mix just after the merger but now Retail lending makes up 25% of the total.
They now have the highest asset quality as measured by the lowest NPLs in the industry, the highest NIMs, and the lowest cost structure.
Loan growth in 2008 was impressively high (Corp +38%, Commercial +57%, International lending +32%, Consumer +35%.)
For the future they see Indonesia GDP growing 6-7% normalized and +4 or 5% GDP growth this year. Targeted annual loan growth figures for 2007-2012 are: (Corp +9%, Commercial +17%, Consumer +18%).
Our analyst Nico has prepared a note on Bank Mandiri (BMRI IJ) which presented at our Vegas forum yesterday (note attached).
Having seen its nonperforming loans carved-out during a post-Asia Crisis recapitalisation in 1999‚ the bank's balance sheet remains underutilised with a loan/deposit ratio (LDR) of 63%‚ while government bonds account for 29% of total assets. Recent loan restructuring and recovery efforts have also helped reduce Mandiri's gross non-performing loan ratio to below 5% from a peak of 25% in 2005. Improving asset utilisation‚ coupled with declining nonperforming loans‚ should continue to improve the bank's profitability over the next few years.
Feedback from the Forum
The focus was on what they've achieved since the merger with 3 other banks, and their business goals out to 2012.
Market share is now an impressive 25% in corp lending and corp deposits.
Corp loans made up nearly all of the asset mix just after the merger but now Retail lending makes up 25% of the total.
They now have the highest asset quality as measured by the lowest NPLs in the industry, the highest NIMs, and the lowest cost structure.
Loan growth in 2008 was impressively high (Corp +38%, Commercial +57%, International lending +32%, Consumer +35%.)
For the future they see Indonesia GDP growing 6-7% normalized and +4 or 5% GDP growth this year. Targeted annual loan growth figures for 2007-2012 are: (Corp +9%, Commercial +17%, Consumer +18%).
CLSA Perusahaan Gas Negara (PGAS IJ)
Perusahaan Gas Negara (PGAS IJ)
Our analyst Swati has prepared a note on Perusahaan Gas Negara (PGAS IJ) which presented at our Vegas forum yesterday (note attached). We believe that PGAS is poised for significant earnings and cashflow-generation growth over the next few years.
Feedback from the Forum
PGAS said a large part of its growth in 2009 will be from utilities switching from diesel to natural gas.
When asked to forecast volume of sales three years out, PGAS commented that it will depend on how much they can beef up their supply line -- its LNG plan should help.
PGAS doesn't foresee any major capex plans over the next five years. It will focus more on medium to low scale projects, and plan on US$50-60mn per year in maintenance capex.
PGAS has been accumulating cash aggressively since last year. Their dividend payout ratio has historically been 50%, though that may increase.
There has been speculation of the government selling down its stake, PGAS simply commented that similar rumors in the past have gone unfounded.
Our analyst Swati has prepared a note on Perusahaan Gas Negara (PGAS IJ) which presented at our Vegas forum yesterday (note attached). We believe that PGAS is poised for significant earnings and cashflow-generation growth over the next few years.
Feedback from the Forum
PGAS said a large part of its growth in 2009 will be from utilities switching from diesel to natural gas.
When asked to forecast volume of sales three years out, PGAS commented that it will depend on how much they can beef up their supply line -- its LNG plan should help.
PGAS doesn't foresee any major capex plans over the next five years. It will focus more on medium to low scale projects, and plan on US$50-60mn per year in maintenance capex.
PGAS has been accumulating cash aggressively since last year. Their dividend payout ratio has historically been 50%, though that may increase.
There has been speculation of the government selling down its stake, PGAS simply commented that similar rumors in the past have gone unfounded.
CLSA Jasa Marga (JSMR IJ)
Jasa Marga (JSMR IJ)
Our analyst Hadi has prepared a note on Jasa Marga (JSMR IJ) which presented at our Vegas forum yesterday (note attached). We believe Jasa Marga is still on track with its operational targets for 2009-10 (see below).
Feedback from the Forum
JSMR is planning to build 5 new toll roads, linked to their existing ones (existing =500km), totalling 140km over the next 4 years (increasing total length by 28%)
In addition it may buy out some existing toll roads owned by private operators that could add another 40 plus km.
JSMR believes they have no competition in winning new projects because of the experience derived from their 30 year track record.
Long term business prospects are indeed bright as the government has no money thus they rely heavily on toll road operators for new road building.
JSMR's debt is rated AA minus by Pefindo (Indonesia's credit rating agency) thus it has strong access to the domestic bond market. It has no need to refinance until 2011.
Our analyst Hadi has prepared a note on Jasa Marga (JSMR IJ) which presented at our Vegas forum yesterday (note attached). We believe Jasa Marga is still on track with its operational targets for 2009-10 (see below).
Feedback from the Forum
JSMR is planning to build 5 new toll roads, linked to their existing ones (existing =500km), totalling 140km over the next 4 years (increasing total length by 28%)
In addition it may buy out some existing toll roads owned by private operators that could add another 40 plus km.
JSMR believes they have no competition in winning new projects because of the experience derived from their 30 year track record.
Long term business prospects are indeed bright as the government has no money thus they rely heavily on toll road operators for new road building.
JSMR's debt is rated AA minus by Pefindo (Indonesia's credit rating agency) thus it has strong access to the domestic bond market. It has no need to refinance until 2011.
DBS KLBF’s Prospects are Still Emerging
Our recent meeting with Kalbe Farma (KLBF) management indicated that KLBF’s prospects are still emerging, despite the worsening economic outlook. Sustainable revenue growth will come from its decent product portfolio and solid market share, being the leader in the Indonesian pharmaceutical market. Note also that its healthy balance sheet will be the key to surviving and expanding in the current tight credit market.
Amidst the current crisis, KLBF management still expects revenue to grow at about 12% y-o-y, of which sales volume will contribute c. 62.5% to the growth, as we understand that the room for price increase should be limited this year. The management expects ethical drugs segment to deliver the largest segmental growth at around 13-14% y-o-y due to its large opportunities in product creations targeting more disease coverage vis-à-vis to the limited variations in OTC drugs. Continuous negative growth in energy drink segment is also expected to ease this year due to the recent launching of Joss Fit and Fatigon Hydro+ to counter competition in the isotonic drinks segment.
KLBF indicated that the 17% y-o-y drop in 9M08 net profit (despite the 11% y-o-y revenue growth) was due to the upward pressures in commodity prices, as the main component of raw and packaging materials, and accounted for 23.7% of 9M08 revenues. Starting from 4Q08, the drop in commodity prices had eased cost pressures but another setback came from the weakening Rupiah exchange rate that led to high conversion rates in purchases of raw and packaging materials which are almost 100% imported. In the mean time, the management has indicated that the drop in commodity prices has been able to offset the loss in currency conversion, leading to a neutral impact on production costs.
In regards to the US$19.2m JP Morgan lawsuit claim, KLBF management indicated that it has never signed the derivative transactions agreement and it has responded by filing back a US$20m lawsuit claim against the bank. KLBF has also pointed that no contingency reserves has been allocated and that the balance sheet condition will be sufficient to buffer the US$19.2m loss, which only represent c. 23.1% of total 9M08 cash balance (at Rp11,000/US$ exchange rate). From the company’s 3M08 financial statement notes, we found that the company had some derivatives contract with the bank which amounted to US$7m in total.
KLBF has recently completed the construction of its 11th production facilities “Orange Kalbe Ltd” in Nigeria , which is 30-70 joint-venture with Orange Drugs Co. Ltd. With the establishment of this OTC production factory, KLBF looks forward to strengthening its market share in the African market, although we understand that contribution from total exports sales are still insignificant with only c. 3.3% of sales in 9M08.
Amidst the current crisis, KLBF management still expects revenue to grow at about 12% y-o-y, of which sales volume will contribute c. 62.5% to the growth, as we understand that the room for price increase should be limited this year. The management expects ethical drugs segment to deliver the largest segmental growth at around 13-14% y-o-y due to its large opportunities in product creations targeting more disease coverage vis-à-vis to the limited variations in OTC drugs. Continuous negative growth in energy drink segment is also expected to ease this year due to the recent launching of Joss Fit and Fatigon Hydro+ to counter competition in the isotonic drinks segment.
KLBF indicated that the 17% y-o-y drop in 9M08 net profit (despite the 11% y-o-y revenue growth) was due to the upward pressures in commodity prices, as the main component of raw and packaging materials, and accounted for 23.7% of 9M08 revenues. Starting from 4Q08, the drop in commodity prices had eased cost pressures but another setback came from the weakening Rupiah exchange rate that led to high conversion rates in purchases of raw and packaging materials which are almost 100% imported. In the mean time, the management has indicated that the drop in commodity prices has been able to offset the loss in currency conversion, leading to a neutral impact on production costs.
In regards to the US$19.2m JP Morgan lawsuit claim, KLBF management indicated that it has never signed the derivative transactions agreement and it has responded by filing back a US$20m lawsuit claim against the bank. KLBF has also pointed that no contingency reserves has been allocated and that the balance sheet condition will be sufficient to buffer the US$19.2m loss, which only represent c. 23.1% of total 9M08 cash balance (at Rp11,000/US$ exchange rate). From the company’s 3M08 financial statement notes, we found that the company had some derivatives contract with the bank which amounted to US$7m in total.
KLBF has recently completed the construction of its 11th production facilities “Orange Kalbe Ltd” in Nigeria , which is 30-70 joint-venture with Orange Drugs Co. Ltd. With the establishment of this OTC production factory, KLBF looks forward to strengthening its market share in the African market, although we understand that contribution from total exports sales are still insignificant with only c. 3.3% of sales in 9M08.
BASML ANTM: Another Gold Asset Acquisition
ANTM: another gold asset acquisition
Daisy fails to get excited over ANTM's acquisition of gold asset. The U$8mn purchase px for 95% stake in Cibaliung gold mine is attractive, but the project was colored by delays and mining difficulty (underground cut-and-fill stopping with decline access). Cibaliung has 412,000 oz reserves (US$20.4/oz). The project is at “wait and see” stage with commissioning delayed for ~2yrs due to capex overrun, financing difficulty and development phase delays. ANTM to spend US$35-40mn to bring it into operation in 2H10. We see Cibaliung as a replacement for ANTM’s Pongkor gold mine rather than a significant addition. As of Dec '07, Pongkor has 742,750 oz reserve, which we est' can last for 3-4 yrs. Post acquisition, ANTM is still mainly a nickel producer, with nickel contributing ~70% of revenue. Daisy remains cautious on nickel near term given no sign of nickel px rebound with LME inventory still rising and the global economy yet to recover. ANTM has also warned of a potential derivative loss. Maintain Underperform PxT Rp900.
Daisy fails to get excited over ANTM's acquisition of gold asset. The U$8mn purchase px for 95% stake in Cibaliung gold mine is attractive, but the project was colored by delays and mining difficulty (underground cut-and-fill stopping with decline access). Cibaliung has 412,000 oz reserves (US$20.4/oz). The project is at “wait and see” stage with commissioning delayed for ~2yrs due to capex overrun, financing difficulty and development phase delays. ANTM to spend US$35-40mn to bring it into operation in 2H10. We see Cibaliung as a replacement for ANTM’s Pongkor gold mine rather than a significant addition. As of Dec '07, Pongkor has 742,750 oz reserve, which we est' can last for 3-4 yrs. Post acquisition, ANTM is still mainly a nickel producer, with nickel contributing ~70% of revenue. Daisy remains cautious on nickel near term given no sign of nickel px rebound with LME inventory still rising and the global economy yet to recover. ANTM has also warned of a potential derivative loss. Maintain Underperform PxT Rp900.
MacQ Stocks to focus on – United Tractors and Adaro Energy
Stocks to focus on – United Tractors & Adaro Energy.
Why United Tractors?
On recent company visit Albert Saputro/Adam Worthington learn that United Tractors(UNTR) will likely beat Macquarie’s 2008 EBITDA forecast by some margin. MacQ 2008 EBITDA forecast stands 4% above consensus. The company will likely beat 2008 consensus at the net profit line as well, despite intention to record an inventory write-down in 4Q08. Albert/Adam think the surprise is coming from: (1) retroactive price increase in mining contracting, (2) better mix on heavy equipment sales.
Looking forward into 2009, the meeting also reveals the scope for an upside surprise to Macquarie’s estimate, where Albert/Adam are already above consensus by 17% on EBITDA and by 22% on EPS. One reason is the carry-forward surprise on mining contracting fee and revenue. The other reason is heavy equipment sales mix. It appears that when the Street analysts brought down unit sales forecast for 2009, they all assume the sales mix between the smaller and bigger units will remain constant. The fact is, based on United Tractor’s pre-order log, the company will sell significantly bigger proportion of big equipment that costs up to 3x the smaller ones.
Why Adaro?
I believe institutional investors are underweight Indo coal space at the moment given the fall-out on Bumi Res. Adaro’s IPO in July 2008 was taken-up mostly by retail investors, as allocation to institutional investors was tightly limited. Quitely, Adaro has crept up to become the #9 biggest stock in the ISX index (and #1 biggest coal stock) with 2.5% weight. Coal sector accounts for roughly 10% of the ISX index, while broader commodities about 20%. For index trackers, the risk now is being too short of coal and commodities when global de-stocking cycle is coming to an end. Adam’s cautious approach on corporate governance is appropriate and natural given the scar from the Bakrie group. But I think the Astra group founders are no Bakrie.
Why United Tractors?
On recent company visit Albert Saputro/Adam Worthington learn that United Tractors(UNTR) will likely beat Macquarie’s 2008 EBITDA forecast by some margin. MacQ 2008 EBITDA forecast stands 4% above consensus. The company will likely beat 2008 consensus at the net profit line as well, despite intention to record an inventory write-down in 4Q08. Albert/Adam think the surprise is coming from: (1) retroactive price increase in mining contracting, (2) better mix on heavy equipment sales.
Looking forward into 2009, the meeting also reveals the scope for an upside surprise to Macquarie’s estimate, where Albert/Adam are already above consensus by 17% on EBITDA and by 22% on EPS. One reason is the carry-forward surprise on mining contracting fee and revenue. The other reason is heavy equipment sales mix. It appears that when the Street analysts brought down unit sales forecast for 2009, they all assume the sales mix between the smaller and bigger units will remain constant. The fact is, based on United Tractor’s pre-order log, the company will sell significantly bigger proportion of big equipment that costs up to 3x the smaller ones.
Why Adaro?
I believe institutional investors are underweight Indo coal space at the moment given the fall-out on Bumi Res. Adaro’s IPO in July 2008 was taken-up mostly by retail investors, as allocation to institutional investors was tightly limited. Quitely, Adaro has crept up to become the #9 biggest stock in the ISX index (and #1 biggest coal stock) with 2.5% weight. Coal sector accounts for roughly 10% of the ISX index, while broader commodities about 20%. For index trackers, the risk now is being too short of coal and commodities when global de-stocking cycle is coming to an end. Adam’s cautious approach on corporate governance is appropriate and natural given the scar from the Bakrie group. But I think the Astra group founders are no Bakrie.
MacQ China coal sector
Edging closer to agreement
Event
Domestic press reports in China suggest that subsidiary power plants of the Huadian and Guodian Group (unlisted) have signed 2009 coal purchase contracts at Rmb530/t vs Rmb470/t at the start of 2008.
Impact
Don’t forget the VAT. Coal prices in China are typically quoted inclusive of
value-added tax (VAT). The VAT for coal was raised from 13% to 17% from 1
January 2009. For both the coal producers and IPPs, revenues and costs are
reported net of VAT, so the net realised price is the number to focus on (see
page 2 for an example).
Deals being signed with a 9% rise in realised prices. According to press
reports, Shandong Zi Kuang Group (unlisted coal supplier) signed contracts
with the Huadian and Guodian Group’s power plants for 1m tonnes (one-fifth
of the 2008 volume), at Rmb530/t (incl. VAT) from Rmb470/t at the start of
2008. This represents a 13% rise in the headline price but a 9% increase in
realised prices after adjusting for VAT differences.
NDRC recommends a 5–8% rise in contract prices? Other local press
reports have suggested that the NDRC, which has previously refrained from
intervening, is now guiding for a 5–8% price rise. Presumably this is inclusive
of VAT, which translates to a net rise of 1–4% YoY. A senior official from the
NDRC Energy Commission was also recently quoted as saying: “an Rmb50/t
(~11%) price rise is reasonable”.
Spot prices could see further weakness. Chinese spot prices have been
surprisingly strong so far this year and the average price YTD is only down
~20% vs 2008. But spot prices have shown signs of weakness since the
Chinese New Year – the latest Qinhuangdao 5,500kcal/kg coal spot price was
Rmb578, down 3% WoW, and Qinhuangdao port inventories rose by 30% in
the past two weeks. We have already factored in a ~30% YoY decrease in
spot prices in our numbers.
Outlook
China Coal Energy most leveraged to higher contract prices. We forecast
flat realised contract prices in 2009 and we remain comfortable with this
outlook. Assuming a 5% YoY rise in realised contract prices, China Coal
Energy’s 2009 EPS would rise by 9%. For Shenhua, the EPS impact is 5%,
since earnings are less sensitive to coal prices.
We retain Outperforms on China Coal Energy and China Shenhua based on
their stable earnings prospects and strong balance sheet positions. Yanzhou
Coal is most levered to spot prices, however we think weaker spot price
expectations are largely priced in and we see potential share buybacks and/or
special dividends as positive share price catalysts.
Event
Domestic press reports in China suggest that subsidiary power plants of the Huadian and Guodian Group (unlisted) have signed 2009 coal purchase contracts at Rmb530/t vs Rmb470/t at the start of 2008.
Impact
Don’t forget the VAT. Coal prices in China are typically quoted inclusive of
value-added tax (VAT). The VAT for coal was raised from 13% to 17% from 1
January 2009. For both the coal producers and IPPs, revenues and costs are
reported net of VAT, so the net realised price is the number to focus on (see
page 2 for an example).
Deals being signed with a 9% rise in realised prices. According to press
reports, Shandong Zi Kuang Group (unlisted coal supplier) signed contracts
with the Huadian and Guodian Group’s power plants for 1m tonnes (one-fifth
of the 2008 volume), at Rmb530/t (incl. VAT) from Rmb470/t at the start of
2008. This represents a 13% rise in the headline price but a 9% increase in
realised prices after adjusting for VAT differences.
NDRC recommends a 5–8% rise in contract prices? Other local press
reports have suggested that the NDRC, which has previously refrained from
intervening, is now guiding for a 5–8% price rise. Presumably this is inclusive
of VAT, which translates to a net rise of 1–4% YoY. A senior official from the
NDRC Energy Commission was also recently quoted as saying: “an Rmb50/t
(~11%) price rise is reasonable”.
Spot prices could see further weakness. Chinese spot prices have been
surprisingly strong so far this year and the average price YTD is only down
~20% vs 2008. But spot prices have shown signs of weakness since the
Chinese New Year – the latest Qinhuangdao 5,500kcal/kg coal spot price was
Rmb578, down 3% WoW, and Qinhuangdao port inventories rose by 30% in
the past two weeks. We have already factored in a ~30% YoY decrease in
spot prices in our numbers.
Outlook
China Coal Energy most leveraged to higher contract prices. We forecast
flat realised contract prices in 2009 and we remain comfortable with this
outlook. Assuming a 5% YoY rise in realised contract prices, China Coal
Energy’s 2009 EPS would rise by 9%. For Shenhua, the EPS impact is 5%,
since earnings are less sensitive to coal prices.
We retain Outperforms on China Coal Energy and China Shenhua based on
their stable earnings prospects and strong balance sheet positions. Yanzhou
Coal is most levered to spot prices, however we think weaker spot price
expectations are largely priced in and we see potential share buybacks and/or
special dividends as positive share price catalysts.
Credit Suisse Indonesia Cement Sector
Indonesia’ January cement demand started with a weaker tone (-4% YoY and -5% MoM), rather than a drop. Although it is still too early, we believe that this is due to the resiliency of the demand structure (given the low per capita consumption).
The positive news (the key reasons why we are positive on the sector) is pricing power. January data recorded a 7% MoM increase, which in reality, was around three months lag. This would mean that the increase took place during the soft month.
We look for flat YoY growth, with a recovery expected in 2H09,and therefore January data look satisfactory.
Demand softened across the board, but as expected, the Java areas underperformed the region given the nature of the demand gearing more towards infrastructure-related projects.
Due to its capacity, Semen Gresik’ market share slightly declined while Indocement’ rose slightly in January 2009. Maintain OUTPERFORM on both INTP and SMGR.
The positive news (the key reasons why we are positive on the sector) is pricing power. January data recorded a 7% MoM increase, which in reality, was around three months lag. This would mean that the increase took place during the soft month.
We look for flat YoY growth, with a recovery expected in 2H09,and therefore January data look satisfactory.
Demand softened across the board, but as expected, the Java areas underperformed the region given the nature of the demand gearing more towards infrastructure-related projects.
Due to its capacity, Semen Gresik’ market share slightly declined while Indocement’ rose slightly in January 2009. Maintain OUTPERFORM on both INTP and SMGR.
Bloomberg U.S. Lawmakers Agree on $789 Billion Stimulus Plan
Feb. 11 (Bloomberg) -- U.S. lawmakers agreed on a $789 billion economic stimulus plan that President Barack Obama said is urgently needed to keep the country from sliding into a deeper recession.
Following weeks of debate and negotiations in Washington, Senate Majority Leader Harry Reid told reporters today that negotiators reached “middle ground” and Congress may vote on the plan within days. Reid said the package would create 3.5 million jobs. The Dow Jones Industrial Average rose 50.65 points, 0.6 percent, to 7,939.53.
“It is a jobs bill,” said Democratic Senator Ben Nelson of Nebraska, an architect of the compromise. “And today you might call us the jobs squad.” Nelson and other senators had insisted that the stimulus plan be less than $800 billion.
“The votes are there for passage, that is clear,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
The new plan is smaller than the $838 billion bill approved by the Senate yesterday and the $819 billion package passed by the House last month. Obama had said he wanted a bill on his desk by the Feb. 16 Presidents’ Day holiday. more...
Following weeks of debate and negotiations in Washington, Senate Majority Leader Harry Reid told reporters today that negotiators reached “middle ground” and Congress may vote on the plan within days. Reid said the package would create 3.5 million jobs. The Dow Jones Industrial Average rose 50.65 points, 0.6 percent, to 7,939.53.
“It is a jobs bill,” said Democratic Senator Ben Nelson of Nebraska, an architect of the compromise. “And today you might call us the jobs squad.” Nelson and other senators had insisted that the stimulus plan be less than $800 billion.
“The votes are there for passage, that is clear,” said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.
The new plan is smaller than the $838 billion bill approved by the Senate yesterday and the $819 billion package passed by the House last month. Obama had said he wanted a bill on his desk by the Feb. 16 Presidents’ Day holiday. more...
GlobalCoal Reuters Indonesia says January coal exports seen down 35 pct
Indonesia says January coal exports seen down 35 pct
Indonesia exported an estimated 8.82 million tonnes of coal in January, down 35 percent from 13.51 million tonnes in December 2008, trade ministry data showed on Wednesday.
Reuters - 11-Feb-09
Indonesia exported an estimated 8.82 million tonnes of coal in January, down 35 percent from 13.51 million tonnes in December 2008, trade ministry data showed on Wednesday.
Reuters - 11-Feb-09
Associated Press Oil prices tumble below $36 on bulging inventories
Oil prices plunge below $36 per barrel on report of building US stockpiles of crude
Dirk Lammers, AP Energy Writer,Wednesday February 11, 2009, 3:43 pm EST
SIOUX FALLS, South Dakota (AP) -- Oil prices plummeted below $36 Wednesday on more evidence that U.S. storage facilities are bulging with unused crude.
Light, sweet crude for March delivery fell $1.99 to settle at $35.94 a barrel on the New York Mercantile Exchange. Oil closed under $40 Monday for the first time in several weeks, and has closed lower every day since.
A weekly report from the Energy Information Administration showed that crude inventories jumped by 4.7 million barrels for the week ended Feb. 6. That easily surpassed the expectations of analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., who expected a boost of 3.4 million barrels. Including last week's build up, crude inventories have increased by more than 30 million barrels in the past five weeks.
But gasoline futures soared on Nymex when the same report showed that U.S. inventories had declined by 2.6 million barrels, surprising trader who expected stockpiles to grow by 900,000 barrels.
"Demand went positive for the first time in recent memory, over a year ago, so that's given us a little bit of support," said Phil Flynn, an analyst at Alaron Trading Corp. more...
Dirk Lammers, AP Energy Writer,Wednesday February 11, 2009, 3:43 pm EST
SIOUX FALLS, South Dakota (AP) -- Oil prices plummeted below $36 Wednesday on more evidence that U.S. storage facilities are bulging with unused crude.
Light, sweet crude for March delivery fell $1.99 to settle at $35.94 a barrel on the New York Mercantile Exchange. Oil closed under $40 Monday for the first time in several weeks, and has closed lower every day since.
A weekly report from the Energy Information Administration showed that crude inventories jumped by 4.7 million barrels for the week ended Feb. 6. That easily surpassed the expectations of analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., who expected a boost of 3.4 million barrels. Including last week's build up, crude inventories have increased by more than 30 million barrels in the past five weeks.
But gasoline futures soared on Nymex when the same report showed that U.S. inventories had declined by 2.6 million barrels, surprising trader who expected stockpiles to grow by 900,000 barrels.
"Demand went positive for the first time in recent memory, over a year ago, so that's given us a little bit of support," said Phil Flynn, an analyst at Alaron Trading Corp. more...
Palmoil HQ Crude palm oil futures lower on profit-taking
February 12, 2009 3:00 GMT+8
Crude palm oil futures prices on Bursa Malaysia Derivatives closed lower yesterday on profit-taking after Tuesday’s rally, a dealer said.The benchmark third month April 2009 slipped RM44 to settle at RM1,925 per tonne.
“The CPO market yesterday was influenced by the weaker crude oil and soyoil market,” the dealer said. As for the CPO contracts, February 2009 lost RM45 to RM2,001 per tonne, March 2009 fell RM44 to RM1,955 per tonne and May 2009 declined RM42 to RM1,920 per tonne.
The day’s volume stood at 17,768 lots compared with 16,291 lots Tuesday. Open interests decreased to 83,715 contracts from 86,134 contracts previously. On the physical market, February South was unchanged at RM1,980 per tonne from Tuesday’s closing.
Crude palm oil futures prices on Bursa Malaysia Derivatives closed lower yesterday on profit-taking after Tuesday’s rally, a dealer said.The benchmark third month April 2009 slipped RM44 to settle at RM1,925 per tonne.
“The CPO market yesterday was influenced by the weaker crude oil and soyoil market,” the dealer said. As for the CPO contracts, February 2009 lost RM45 to RM2,001 per tonne, March 2009 fell RM44 to RM1,955 per tonne and May 2009 declined RM42 to RM1,920 per tonne.
The day’s volume stood at 17,768 lots compared with 16,291 lots Tuesday. Open interests decreased to 83,715 contracts from 86,134 contracts previously. On the physical market, February South was unchanged at RM1,980 per tonne from Tuesday’s closing.
Associated Press Stocks end higher on agreement on stimulus bill
Stocks end moderately higher as lawmakers announce deal on $789 bln economic stimulus bill
Tim Paradis, AP Business Writers, Wednesday February 11, 2009, 4:44 pm EST
NEW YORK (AP) -- Investors shuttled between optimism and pessimism Wednesday, finally betting that the government might help the economy out of recession after all. News in late afternoon that key lawmakers agreed on a $789 billion economic stimulus plan sent stocks moderately higher. The advance, which came in a back-and-forth session, came a day after stocks plunged on worries about the government's financial industry bailout plan.
The stimulus measure includes provisions for unemployment benefits, food stamps, health coverage and more. It also includes billions for states facing yawning budget gaps.
Investors have been eager for any signals that the economy could begin to recover. Supporters hope the bill's mix of spending and tax cuts will increase consumer spending, which accounts for more than two-thirds of U.S. economic activity. Spending has stalled since the mid-September bankruptcy of Lehman Brothers Holdings Inc. froze credit markets and deepened the recession. more...
Tim Paradis, AP Business Writers, Wednesday February 11, 2009, 4:44 pm EST
NEW YORK (AP) -- Investors shuttled between optimism and pessimism Wednesday, finally betting that the government might help the economy out of recession after all. News in late afternoon that key lawmakers agreed on a $789 billion economic stimulus plan sent stocks moderately higher. The advance, which came in a back-and-forth session, came a day after stocks plunged on worries about the government's financial industry bailout plan.
The stimulus measure includes provisions for unemployment benefits, food stamps, health coverage and more. It also includes billions for states facing yawning budget gaps.
Investors have been eager for any signals that the economy could begin to recover. Supporters hope the bill's mix of spending and tax cuts will increase consumer spending, which accounts for more than two-thirds of U.S. economic activity. Spending has stalled since the mid-September bankruptcy of Lehman Brothers Holdings Inc. froze credit markets and deepened the recession. more...
Rabu, 11 Februari 2009
Bloomberg Crude Oil Rises on Speculation OPEC Cuts Are Curbing Oversupply
Feb. 11 (Bloomberg) -- Oil rose on speculation that OPEC production cuts are starting to reduce the oversupply of crude caused by weakening demand.
The industry-funded American Petroleum Institute yesterday said U.S. crude supplies unexpectedly declined 2 million barrels to 344.3 million last week. OPEC has complied with about 80 percent of production cuts announced through to December, the group’s secretary general said this week. An Energy Department report today is expected to show the smallest increase in stocks in four weeks, a Bloomberg survey showed. more...
The industry-funded American Petroleum Institute yesterday said U.S. crude supplies unexpectedly declined 2 million barrels to 344.3 million last week. OPEC has complied with about 80 percent of production cuts announced through to December, the group’s secretary general said this week. An Energy Department report today is expected to show the smallest increase in stocks in four weeks, a Bloomberg survey showed. more...
Bloomberg Stocks in Europe, Asia Decline; Credit Suisse, Peugeot Fall
Feb. 11 (Bloomberg) -- Stocks in Europe and Asia fell as Credit Suisse Group AG and PSA Peugeot Citroen posted losses and speculation grew that the proposed U.S. bank rescue won’t revive credit markets and the global economy.
Credit Suisse, Switzerland’s second-largest bank, and Peugeot, France’s biggest carmaker, sank more than 3 percent. HSBC Holdings Plc, which gets a quarter of its revenue in the U.S., dropped 4.8 percent in Hong Kong after Treasury Secretary Timothy Geithner said he’s still “exploring a range of different structures” to bail out banks.
The MSCI World Index declined for a second day, losing 0.5 percent to 842.33 at 9:24 a.m. in London. The gauge of 23 developed countries had posted a 5.8 percent rally in the previous five days on optimism that measures by U.S. President Barack Obama and interest-rate cuts would help lift economies in the U.S., Europe and Japan out of recession. more...
Credit Suisse, Switzerland’s second-largest bank, and Peugeot, France’s biggest carmaker, sank more than 3 percent. HSBC Holdings Plc, which gets a quarter of its revenue in the U.S., dropped 4.8 percent in Hong Kong after Treasury Secretary Timothy Geithner said he’s still “exploring a range of different structures” to bail out banks.
The MSCI World Index declined for a second day, losing 0.5 percent to 842.33 at 9:24 a.m. in London. The gauge of 23 developed countries had posted a 5.8 percent rally in the previous five days on optimism that measures by U.S. President Barack Obama and interest-rate cuts would help lift economies in the U.S., Europe and Japan out of recession. more...
PalmoilHQ Malaysian Palm Oil Stockpiles and Output Drop to Nine-Month Low
February 11, 2009 13:12 GMT+8Palm oil stockpiles in Malaysia, the world’s second-largest producer, dropped in January to the lowest in nine months.
Inventory of the edible oil, used mainly in food, dropped 8.3 percent from December to 1.83 million tons, the Malaysian Palm Oil Board said today. It hasn’t been lower since April 2008 when it reached 1.79 million tons.
Output fell 10 percent to 1.33 million tons, also a nine- month low. Exports had the biggest drop since January last year, falling 17 percent from December’s record to 1.35 million tons, the board said.
Palm oil for April delivery dropped 1.1 percent to 1,948 ringgit ($418) a metric ton on the Malaysia Derivatives Exchange at the 12:30 p.m. trading halt. The board’s data was announced after the halt.
Danareksa Gudang Garam TP; idr7,000
Shift to the right
Changing focus
On a positive note, the management appears to recognise the importance of adapting to meet changes in consumer tastes. In this respect, they are focusing more on boosting the sales of hand rolled and mild cigarettes, while, at the same time, still maintaining the brand equity of its machine rolled cigarettes. Although the company still has some way to go, we believe that Gudang Garam is nonetheless on the right path to sustain or even increase its market share in the long run.
Improving its distribution
Starting last year, Gudang Garam has taken measures to improve its distribution system by consolidating it under its fully owned subsidiary, Surya Madistrindo. This was done by acquiring its main distribution arms consisting of three affiliated companies that exclusively distribute Gudang Garam cigarettes. As such, Gudang Garam hopes to attain higher sales by having better market reach as well as providing a better service to its distributors, particularly the smaller retailers. By having greater control over distribution, the company should be better placed to adapt toward changing market dynamics.
Reiterate BUY, TP of Rp 7,000
The new excise tax regulation has started to be applied early this month. We therefore adjust our numbers accordingly and apply new assumptions on specific excise tax increases of around 5%-10% per annum. At the same time, we have also toned down our raw materials cost assumption as the outlook for commodity prices looks stable. As a result, our earnings forecast is adjusted slightly higher by 2.5-2.8% in 09-10F. Our share target price remains at Rp7,000, implying an attractive valuation of 7.1-6.9x PE09-10F. BUY.
Changing focus
On a positive note, the management appears to recognise the importance of adapting to meet changes in consumer tastes. In this respect, they are focusing more on boosting the sales of hand rolled and mild cigarettes, while, at the same time, still maintaining the brand equity of its machine rolled cigarettes. Although the company still has some way to go, we believe that Gudang Garam is nonetheless on the right path to sustain or even increase its market share in the long run.
Improving its distribution
Starting last year, Gudang Garam has taken measures to improve its distribution system by consolidating it under its fully owned subsidiary, Surya Madistrindo. This was done by acquiring its main distribution arms consisting of three affiliated companies that exclusively distribute Gudang Garam cigarettes. As such, Gudang Garam hopes to attain higher sales by having better market reach as well as providing a better service to its distributors, particularly the smaller retailers. By having greater control over distribution, the company should be better placed to adapt toward changing market dynamics.
Reiterate BUY, TP of Rp 7,000
The new excise tax regulation has started to be applied early this month. We therefore adjust our numbers accordingly and apply new assumptions on specific excise tax increases of around 5%-10% per annum. At the same time, we have also toned down our raw materials cost assumption as the outlook for commodity prices looks stable. As a result, our earnings forecast is adjusted slightly higher by 2.5-2.8% in 09-10F. Our share target price remains at Rp7,000, implying an attractive valuation of 7.1-6.9x PE09-10F. BUY.
Morgan Stanley BMRI Overweight TP; idr2,200
Maintain Overweight: We think significant downside risks have been discounted in Mandiri’s stock price, which is at 5.8x 2009E EPS, 1.0x NTA, with ROE forecast at 18-20%. This is the cheapest Indonesian bank within our coverage, reflecting market perceptions of its quality. Furthermore, we note that consensus estimates for its F09 and F10 EPS have been cut by ~20% over the past year – expectations are not high.
Asset quality stable: Asset quality has been admirably maintained through a tumultuous quarter when interest rates and exchange rate spiked, whilst liquidity, commodity and asset prices plummeted. Furthermore,Mandiri has had to deal with well-publicized exposures to some high-profile customers, who have run into cash flow difficulties. Gross NPL ratio at 4.7% in 4Q is up from 4.44% in 3Q, but well-below our expectations and down significantly from 7.2% at end-2007.
While we expect asset quality to deteriorate with a lag, the bank has beefed up its provision reserves to more than 120% of NPLs – and is better prepared this time, in our view.
Risk-focused: Over the past quarter (and 12 months), Mandiri has focused efforts on improving its liquidity,managing down FX lending (down 17% QoQ to US$3.3bn by encouraging customers to either repay or switch into rupiah loans), running stress tests, closely monitoring higher risk customers and intensifying restructurings. Management affirmed that they had not been involved in speculative derivative positions.
Asset quality stable: Asset quality has been admirably maintained through a tumultuous quarter when interest rates and exchange rate spiked, whilst liquidity, commodity and asset prices plummeted. Furthermore,Mandiri has had to deal with well-publicized exposures to some high-profile customers, who have run into cash flow difficulties. Gross NPL ratio at 4.7% in 4Q is up from 4.44% in 3Q, but well-below our expectations and down significantly from 7.2% at end-2007.
While we expect asset quality to deteriorate with a lag, the bank has beefed up its provision reserves to more than 120% of NPLs – and is better prepared this time, in our view.
Risk-focused: Over the past quarter (and 12 months), Mandiri has focused efforts on improving its liquidity,managing down FX lending (down 17% QoQ to US$3.3bn by encouraging customers to either repay or switch into rupiah loans), running stress tests, closely monitoring higher risk customers and intensifying restructurings. Management affirmed that they had not been involved in speculative derivative positions.
CIMB PGAS Volume Growth Remains Intact
Company update - Volume growth remains intact - by Itphong Saengtubtim (PGAS IJ / PGAS.JK, OUTPERFORM - Maintained, Rp2,050 - Tgt. Rp2,550, Utilities)
We are now less concerned about PGAS's ability to maintain its gas selling prices following a recent statement from Indonesia's Minister of Energy and Mineral Resources. PGAS's volume growth has become more of a concern under current economic conditions. We are downgrading our sales volume forecasts due to a drop in sales volume to industrial customers and slower-than-expected offtake by PLN. As a result, we have cut our EPS forecasts by 5-20% for FY08-10.
However, we are still optimistic on PGAS's long-term outlook and maintain our OUTPERFORM rating, albeit with a lower DCF target price of Rp2,550 (from Rp2,650).
We are now less concerned about PGAS's ability to maintain its gas selling prices following a recent statement from Indonesia's Minister of Energy and Mineral Resources. PGAS's volume growth has become more of a concern under current economic conditions. We are downgrading our sales volume forecasts due to a drop in sales volume to industrial customers and slower-than-expected offtake by PLN. As a result, we have cut our EPS forecasts by 5-20% for FY08-10.
However, we are still optimistic on PGAS's long-term outlook and maintain our OUTPERFORM rating, albeit with a lower DCF target price of Rp2,550 (from Rp2,650).
CLSA Antam (ANTM IJ) – Cibaliung acquisition looks good at first, but…
Antam (ANTM IJ), comment from Olie – Cibaliung acquisition looks good at first, but…
The plan to acquire Cibaliung. ANTM announced the plan to acquire Cibaliung gold project from ARC exploration (ARC). Note that ANTM has been a minority partner, with 5% stake in the project. Should the deal is completed, expected within 4-6 months, this would be the first successful acquisition for ANTM. *needs various approval to finalise deal
What about Cibaliung. Key parameters:life of mine of 6 years, with ore production rate of 220,000 tonnes per annum. Annual gold production could reach around 2.2t(70,000oz), and average life of mine cash operating costs of about US$US320/oz. Therefore, once Cibaliung is in production, it could boost Antam gold production by 80% to around 5t per annum.
At first, it looks like a good deal. We believe the sale was forced by the creditor, ANZ, after ARC was unable to secure enough funding to continue developing. Antam would therefore takeover the loan, amounting US$65m, and would pay virtually nothing for the equity. EV/reserves would be valued at around US$150/oz, quite reasonable.
There are some caveats though. 1) There is no production and Antam would need to spend additional capex. 2) We understand that ARC has been trying to sell Cibaliung project for quite some time without much success. As also stated in Antam press release, Cibaliung has had significant cost over runs for years. 3) In fact, Antam had little confidence on Cibaliung in the past, as the company decided to dilute its equity portion in Cibaliung, down from 25% to currently only 5%.
Not sure if it is a gold play. Antam is considered by some as the only so-called gold play in Indonesia, with 30% of revenue comes from gold. We disagree:
1) Gold contribution to revenue has increased over time simply because nickel price collapsed. 2) The rising gold contribution to revenue does not come from production. Antam has been doing some gold trading, as its total gold production has been flat at around 2.8m tonnes for quite some time while sales volume doubled YoY to 9.8t in 2008. Note that there is very thin margin in gold trading. 3) Operating costs have doubled in the past 3 years. Therefore the spike in gold price would not be able to help much and the company is at risk of booking operating loss. Still a SELL
The plan to acquire Cibaliung. ANTM announced the plan to acquire Cibaliung gold project from ARC exploration (ARC). Note that ANTM has been a minority partner, with 5% stake in the project. Should the deal is completed, expected within 4-6 months, this would be the first successful acquisition for ANTM. *needs various approval to finalise deal
What about Cibaliung. Key parameters:life of mine of 6 years, with ore production rate of 220,000 tonnes per annum. Annual gold production could reach around 2.2t(70,000oz), and average life of mine cash operating costs of about US$US320/oz. Therefore, once Cibaliung is in production, it could boost Antam gold production by 80% to around 5t per annum.
At first, it looks like a good deal. We believe the sale was forced by the creditor, ANZ, after ARC was unable to secure enough funding to continue developing. Antam would therefore takeover the loan, amounting US$65m, and would pay virtually nothing for the equity. EV/reserves would be valued at around US$150/oz, quite reasonable.
There are some caveats though. 1) There is no production and Antam would need to spend additional capex. 2) We understand that ARC has been trying to sell Cibaliung project for quite some time without much success. As also stated in Antam press release, Cibaliung has had significant cost over runs for years. 3) In fact, Antam had little confidence on Cibaliung in the past, as the company decided to dilute its equity portion in Cibaliung, down from 25% to currently only 5%.
Not sure if it is a gold play. Antam is considered by some as the only so-called gold play in Indonesia, with 30% of revenue comes from gold. We disagree:
1) Gold contribution to revenue has increased over time simply because nickel price collapsed. 2) The rising gold contribution to revenue does not come from production. Antam has been doing some gold trading, as its total gold production has been flat at around 2.8m tonnes for quite some time while sales volume doubled YoY to 9.8t in 2008. Note that there is very thin margin in gold trading. 3) Operating costs have doubled in the past 3 years. Therefore the spike in gold price would not be able to help much and the company is at risk of booking operating loss. Still a SELL
CLSA Research Today: Bakrie Sumatra (UNSP IJ)
Research Today: Bakrie Sumatra (UNSP IJ)
Our analyst Wilianto has prepared a note on Bakrie Plantations (UNSP IJ). Using our US$300/t CPO price (current price US$550) and US$1,500/t rubber price (current spot price is US$1,500) assumptions, UNSP is going to lose money this year.
This is mainly due to high leverage structure at UNSP’s balance sheet. EBIT and EBITDA are still positive. Total consolidated gross debt is Rp1.6tn (US$135mn) in 9M08, out of which the company has US$ debt of US$110mn, paying 10.75% p.a. interest rate. And there is another Rp1.6tn debt in its unconsolidated 51% owned Agri Resources. Market cap is currently US$98mn.
There are good interest in CPO names lately. We believe that the stocks to play on a CPO price rebound in Indonesia would be Astro Agro (AALI IJ) and London Sumatra (LSIP IJ).
UNSP sensitivity to palm oil and rubber prices is is high:
Every US$50/tonne change in CPO price moves earnings by Rp64bn
Every US$100/tonne change in rubber price moves earnings by Rp17bn.
Rubber accounts 37% of profit in 9M08‚ with the remainder coming from palm oil.
UNSP’s view is that pricing for Palm Oil has bottomed. Why? (1) Palm Oil is trading at a discount to soybean oil (2) they are entering the seasonal lows in terms of production.
UNSP’s view on rubber is more negative as the auto world is the biggest customer and rubber pricing is correlated to crude oil. Obviously neither is good right now for rubber.
Our analyst Wilianto has prepared a note on Bakrie Plantations (UNSP IJ). Using our US$300/t CPO price (current price US$550) and US$1,500/t rubber price (current spot price is US$1,500) assumptions, UNSP is going to lose money this year.
This is mainly due to high leverage structure at UNSP’s balance sheet. EBIT and EBITDA are still positive. Total consolidated gross debt is Rp1.6tn (US$135mn) in 9M08, out of which the company has US$ debt of US$110mn, paying 10.75% p.a. interest rate. And there is another Rp1.6tn debt in its unconsolidated 51% owned Agri Resources. Market cap is currently US$98mn.
There are good interest in CPO names lately. We believe that the stocks to play on a CPO price rebound in Indonesia would be Astro Agro (AALI IJ) and London Sumatra (LSIP IJ).
UNSP sensitivity to palm oil and rubber prices is is high:
Every US$50/tonne change in CPO price moves earnings by Rp64bn
Every US$100/tonne change in rubber price moves earnings by Rp17bn.
Rubber accounts 37% of profit in 9M08‚ with the remainder coming from palm oil.
UNSP’s view is that pricing for Palm Oil has bottomed. Why? (1) Palm Oil is trading at a discount to soybean oil (2) they are entering the seasonal lows in terms of production.
UNSP’s view on rubber is more negative as the auto world is the biggest customer and rubber pricing is correlated to crude oil. Obviously neither is good right now for rubber.
Morgan Stanley ANTM Gold Mine Acquisition Sends Positive Signal
Golden Opportunity for Cash
Up B/S
*Gold Mine Acquisition Sends Positive Signal: *We reiterate our OW recommendation following Antam’s announcement today that it is buying an Indonesian gold project. We see this as attractive for two reasons:
1) Antam is putting its cashed-up balance sheet to work,and
2) the acquisition looks attractively-priced with an average cost (M&A + development cost) of just $120/oz,significantly lower than average EV/oz of most gold companies. On annualized basis, we estimate that the Cibaliuang gold mine could add Rp20-30/sh or 15-20% to our EPS from 2011e onwards. We may adjust earnings after year-end results are released at the end of this month.
*Acquisition Details: *The Cibaliuang gold project is acquired from Arc Exploration (ARX) and ANZ Bank for just US$8m. ARX was the original owner, which ran into difficulties due to cost over-runs and financing difficulties, but listed on the ASX it used to have a market cap of A$30mn in 1H08. The mine requires an additional US$40mn to develop and is estimated to have reserves of 412,000 oz of pure gold with annual production of 70,700 oz. The mine should be commissioned by 2011 and we estimate that it should have similar margins to Antam’s existing gold mine. The transaction is expected to close in 4-6 months.
While we have not adjusted our numbers, we believe this gold acquisition is a step in the right direction and that Antam will continue to its M&A strategy and move toward our Bull Case PT of Rp2,000.
Up B/S
*Gold Mine Acquisition Sends Positive Signal: *We reiterate our OW recommendation following Antam’s announcement today that it is buying an Indonesian gold project. We see this as attractive for two reasons:
1) Antam is putting its cashed-up balance sheet to work,and
2) the acquisition looks attractively-priced with an average cost (M&A + development cost) of just $120/oz,significantly lower than average EV/oz of most gold companies. On annualized basis, we estimate that the Cibaliuang gold mine could add Rp20-30/sh or 15-20% to our EPS from 2011e onwards. We may adjust earnings after year-end results are released at the end of this month.
*Acquisition Details: *The Cibaliuang gold project is acquired from Arc Exploration (ARX) and ANZ Bank for just US$8m. ARX was the original owner, which ran into difficulties due to cost over-runs and financing difficulties, but listed on the ASX it used to have a market cap of A$30mn in 1H08. The mine requires an additional US$40mn to develop and is estimated to have reserves of 412,000 oz of pure gold with annual production of 70,700 oz. The mine should be commissioned by 2011 and we estimate that it should have similar margins to Antam’s existing gold mine. The transaction is expected to close in 4-6 months.
While we have not adjusted our numbers, we believe this gold acquisition is a step in the right direction and that Antam will continue to its M&A strategy and move toward our Bull Case PT of Rp2,000.
CIMB What's on The Table
Quick Takes – Telekomunikasi Indonesia – A rebound in 4Q08
SingTel's 3QFY09 results revealed some of Telkomsel's financial results and operating indicators that suggest a fairly strong turnaround in 4Q08. Revenue, ARPU
and subscriber base rose 12% qoq, 10% and 8% respectively. EBITDA margins rebounded to 60% in 4Q08 from 55% in 3Q, driving PBT up 17% qoq, excluding a fair-value loss. We reiterate that with stable tariffs and no significant differences among telco offerings, consumers would gravitate towards the market leader in terms of coverage and brand, which is Telkomsel.
Maintain OUTPERFORM and DCF-based target price of Rp7,300. Price catalysts could include a results turnaround, and higher market share.
SingTel's 3QFY09 results revealed some of Telkomsel's financial results and operating indicators that suggest a fairly strong turnaround in 4Q08. Revenue, ARPU
and subscriber base rose 12% qoq, 10% and 8% respectively. EBITDA margins rebounded to 60% in 4Q08 from 55% in 3Q, driving PBT up 17% qoq, excluding a fair-value loss. We reiterate that with stable tariffs and no significant differences among telco offerings, consumers would gravitate towards the market leader in terms of coverage and brand, which is Telkomsel.
Maintain OUTPERFORM and DCF-based target price of Rp7,300. Price catalysts could include a results turnaround, and higher market share.
CITI INCO Sell: Structurally Attractive, but Positive Expectations Priced In
Sell: Structurally Attractive, but Positive Expectations Priced In
v Maintain Sell — While structurally attractive production costs mean the company should survive long term, the stock’s current valuation suggests some positive expectations on nickel prices have already been priced in.Furthermore, we expect rising capex and funding needs to add to challenges for PT Inco. We cut our estimates; trim target to Rp1,975; maintain Sell (3L).
v 20% production cut — PT Inco is moving ahead with production cuts through shutting down diesel generators, hence relying solely on hydro power. This has started since end Oct-08, and we expect will continue until 2010.
v Commodity price revisions, earnings impact — Citi's commodities team recently slashed its '09-'10E Ni price forecast to US$4.5 and US$5.0/lb (from US$6/lb). Combined, the production cut and commodity price downgrades result in 14-61% reductions in our earnings estimates.
v Attractive cost structure — Along with the production cut, we expect production costs to fall to ~US$3.2/lb, made possible by the cheap operating cost of the hydro generators (hence the low cost should be sustainable).
v Unattractive valuation — PT Inco trades on 24x 12-months forward PE, slightly off the 25x, but a big jump from the low of 9x on trough earnings. This suggests downside risk if nickel price movements prove to be short-lived.
v Some near-term challenges — 1) Fund raising to plug major capex program. 2)Uncertainties surrounding the possible impact from the new mining law.
v Maintain Sell — While structurally attractive production costs mean the company should survive long term, the stock’s current valuation suggests some positive expectations on nickel prices have already been priced in.Furthermore, we expect rising capex and funding needs to add to challenges for PT Inco. We cut our estimates; trim target to Rp1,975; maintain Sell (3L).
v 20% production cut — PT Inco is moving ahead with production cuts through shutting down diesel generators, hence relying solely on hydro power. This has started since end Oct-08, and we expect will continue until 2010.
v Commodity price revisions, earnings impact — Citi's commodities team recently slashed its '09-'10E Ni price forecast to US$4.5 and US$5.0/lb (from US$6/lb). Combined, the production cut and commodity price downgrades result in 14-61% reductions in our earnings estimates.
v Attractive cost structure — Along with the production cut, we expect production costs to fall to ~US$3.2/lb, made possible by the cheap operating cost of the hydro generators (hence the low cost should be sustainable).
v Unattractive valuation — PT Inco trades on 24x 12-months forward PE, slightly off the 25x, but a big jump from the low of 9x on trough earnings. This suggests downside risk if nickel price movements prove to be short-lived.
v Some near-term challenges — 1) Fund raising to plug major capex program. 2)Uncertainties surrounding the possible impact from the new mining law.
Dow Jones Newswire Indonesia Shares Likely Lower
0200 GMT [Dow Jones] Indonesia shares likely lower, weighed by DJIA's fall as Treasury Department's latest plan to bail out banks, revive lending, stimulate economic growth failed to restore investor confidence. Traders say weak IDR, absence of fresh leads from domestic economy should also inspire selling. Main index likely in 1300-1340 range vs yesterday's close at 1332.129, down 0.8%. "The main index could fall more than 1.5%," says analyst. Heavyweight Telkom (TLKM.JK), rival Indosat (ISAT.JK) may lead falls after ADRs in NY each down about 4%.
Siaran Pers PT Toyota Astra Motor
Siaran Pers Jakarta, 10 Februari 2009
No. 011/MKT-PR/I/09
Pasar Otomotif Nasional 2009
Toyota Kuasai 39,7% Penjualan Ritel Otomotif Nasional Bulan Januari
Jakarta – Di bulan Januari 2009 ini, PT Toyota-Astra Motor berhasil menguasai pasar otomotif nasional dengan memperoleh market share sebesar 39,7% untuk penjualan ritel dari total penjualan ritel pasar yang diperkirakan sebesar 34.167 unit. Pencapaian bulan Januari ini meningkat dibandingkan dengan penjualan ritel Januari tahun sebelumnya yang mencapai 32,3%.
Produk-produk yang tetap menjadi andalan Toyota dan sangat diminati di pasar Indonesia, yaitu Avanza, berhasil mencapai penjualan ritel di bulan Januari ini dengan angka penjualan sebesar 7.235 unit atau meningkat 31% dari bulan yang sama tahun sebelumnya yang sebesar 5.521 unit. Toyota Avanza memang merupakan produk yang fenomenal, bagaimana pun kondisi ekonomi yang terjadi di Indonesia, permintaan Avanza selalu mencapai hasil yang optimal.
Di kelas sedan, Corolla Altis mencapai hasil yang memuaskan dengan memperoleh penjualan ritel sebesar 152 unit atau meningkat 145% dibandingkan dengan penjualan pada bulan yang sama tahun sebelumnya. Sedan yang menjadi The Best Small Sedan pada penyelenggaraan Indonesian Car of The Year 2008 versi Majalah Mobil Motor memang menjadi pilihan yang tepat untuk para eksekutif yang berkualitas, performa yang tinggi serta didukung oleh pelayanan aftersales yang luar biasa di seluruh cabang Toyota di Indonesia.
Di kelas SUV, Fortuner juga mencatat hasil yang membanggakan dengan meraih penjualan sebesar 498 unit, meningkat 33,2% dari bulan yang sama tahun sebelumnya (374 unit). Sedangkan di kelas passenger car , Toyota Hi-Lux Single Cabin dan Toyota Dyna semakin menunjukan grafik peningkatan yang sangat baik. Di bulan Januari ini, penjualan Hi-Lux Single Cabin mencatatkan penjualan sebesar 452 unit atau meningkat 37% dari bulan yang sama pada tahun sebelumnya (330 unit). Untuk Toyota Dyna, penjualan di bulan ini mencapai angka 531 unit.
“Pencapaian di awal tahun ini cukup menggembirakan, di tengah kondisi ekonomi yang masih belum stabil ini Toyota berhasil menguasai pasar penjualan ritel sebesar 39,7%. Kami pun akan selalu berkomitmen untuk memberikan produk dan layanan yang terbaik untuk para pelanggan setia Toyota,” ucap Johnny Darmawan Presiden Direktur PT Toyota-Astra Motor.
-selesai-
Untuk informasi lebih lanjut :
Rouli/Irene /Zahra/Awan
Marketing Public Relations
Ph : (021) 651-5551 ext. 2266
Fax : (021) 651-5231
No. 011/MKT-PR/I/09
Pasar Otomotif Nasional 2009
Toyota Kuasai 39,7% Penjualan Ritel Otomotif Nasional Bulan Januari
Jakarta – Di bulan Januari 2009 ini, PT Toyota-Astra Motor berhasil menguasai pasar otomotif nasional dengan memperoleh market share sebesar 39,7% untuk penjualan ritel dari total penjualan ritel pasar yang diperkirakan sebesar 34.167 unit. Pencapaian bulan Januari ini meningkat dibandingkan dengan penjualan ritel Januari tahun sebelumnya yang mencapai 32,3%.
Produk-produk yang tetap menjadi andalan Toyota dan sangat diminati di pasar Indonesia, yaitu Avanza, berhasil mencapai penjualan ritel di bulan Januari ini dengan angka penjualan sebesar 7.235 unit atau meningkat 31% dari bulan yang sama tahun sebelumnya yang sebesar 5.521 unit. Toyota Avanza memang merupakan produk yang fenomenal, bagaimana pun kondisi ekonomi yang terjadi di Indonesia, permintaan Avanza selalu mencapai hasil yang optimal.
Di kelas sedan, Corolla Altis mencapai hasil yang memuaskan dengan memperoleh penjualan ritel sebesar 152 unit atau meningkat 145% dibandingkan dengan penjualan pada bulan yang sama tahun sebelumnya. Sedan yang menjadi The Best Small Sedan pada penyelenggaraan Indonesian Car of The Year 2008 versi Majalah Mobil Motor memang menjadi pilihan yang tepat untuk para eksekutif yang berkualitas, performa yang tinggi serta didukung oleh pelayanan aftersales yang luar biasa di seluruh cabang Toyota di Indonesia.
Di kelas SUV, Fortuner juga mencatat hasil yang membanggakan dengan meraih penjualan sebesar 498 unit, meningkat 33,2% dari bulan yang sama tahun sebelumnya (374 unit). Sedangkan di kelas passenger car , Toyota Hi-Lux Single Cabin dan Toyota Dyna semakin menunjukan grafik peningkatan yang sangat baik. Di bulan Januari ini, penjualan Hi-Lux Single Cabin mencatatkan penjualan sebesar 452 unit atau meningkat 37% dari bulan yang sama pada tahun sebelumnya (330 unit). Untuk Toyota Dyna, penjualan di bulan ini mencapai angka 531 unit.
“Pencapaian di awal tahun ini cukup menggembirakan, di tengah kondisi ekonomi yang masih belum stabil ini Toyota berhasil menguasai pasar penjualan ritel sebesar 39,7%. Kami pun akan selalu berkomitmen untuk memberikan produk dan layanan yang terbaik untuk para pelanggan setia Toyota,” ucap Johnny Darmawan Presiden Direktur PT Toyota-Astra Motor.
-selesai-
Untuk informasi lebih lanjut :
Rouli/Irene /Zahra/Awan
Marketing Public Relations
Ph : (021) 651-5551 ext. 2266
Fax : (021) 651-5231
Dow Jones Car manufacturer PT Toyota-Astra Motor
JAKARTA (Dow Jones)--Car manufacturer PT Toyota-Astra Motor Wednesday said its new car sales in January fell 1.1% on year to 13,551 units from 13,712 in the same month a year earlier.
TAM didn't say what drove the decline, but analysts attributed it to the high interest rate environment and weaker people's purchasing power.
TAM, a joint venture between Toyota Motor (7203.TO) and car distributor PT Astra International (ASII.JK) - Indonesia's largest automotive company by assets and sales - said it had a 39.7% domestic market share in January, up from 32.3% in January last year.
Domestic car sales in January in Indonesia fell 20% to 34,167 units from 42,489 units a year earlier, TAM said, without citing a source for the data.
·
-By Edhi Pranasidhi; Dow Jones Newswires; 62
TAM didn't say what drove the decline, but analysts attributed it to the high interest rate environment and weaker people's purchasing power.
TAM, a joint venture between Toyota Motor (7203.TO) and car distributor PT Astra International (ASII.JK) - Indonesia's largest automotive company by assets and sales - said it had a 39.7% domestic market share in January, up from 32.3% in January last year.
Domestic car sales in January in Indonesia fell 20% to 34,167 units from 42,489 units a year earlier, TAM said, without citing a source for the data.
·
-By Edhi Pranasidhi; Dow Jones Newswires; 62
PalmoilHQ China’s buying interest boosts crude palm oil futures
February 11, 2009 3:00 GMT+8 CRUDE palm oil (CPO) futures prices on Bursa Malaysia Derivatives ended higher yesterday due to buying interest from China and despite grim export data released by cargo surveyors, a dealer said.
He noted that China’s intention to place an order after the long holiday, helped lift the CPO market. “The market was generally steadier as players were in a buying mood amid the current supply shortage,” he said.
Meanwhile, cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products from February 1-10 dropped 3.1 per cent to 372,782 tonnes from 384,842 tonnes shipped between the same period in January.
Another cargo surveyor, Intertek Testing Services reported a 15 per cent fall to 332,081 tonnes from 392,067 previously.
At close, the contract month for February 2009 surged RM120 to settle at RM2,045 per tonne, March 2009 climbed RM100 to RM1,999 per tonne, April 2009 rose RM89 to RM1,969 per tonne and May 2009 increased RM75 to RM1,962 per tonne.
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