Laba PTBA Melesat 68,6%
PT Bukti Asam Tbk mencatat pertumbuhan laba bersih PTBA sebesar 68,6% pada periode Januari-September 2009 menjadi Rp 2,228 triliun dari posisi tahun sebelumnya di 2008 yang sebesar Rp 1,321 triliun.
Kenaikan laba ini didorong oleh kenaikan pendapatan perseroan per 30 September 2009. Sampai akhir bulan lalu tercatat pendapatan sebesar Rp6,554 triliun atau naik 32% dari periode yang sama tahun lalu Rp 4,967 triliun.
Demikian disampaikan Corporate Secretary PT Bukti Asam (Persero) Tbk. Achamd Sudarto dalam keterbukaan informasi Kamis (29/10/2009) malam.
Laba Jasa Marga Naik 33%
PT Jasa Marga Tbk (JSMR) membukukan kenaikan laba bersih sebesar 33% pada kuartal III-2009 menjadi Rp 735,14 miliar, dari periode yang sama tahun lalu yang sebesar Rp 554,4 miliar.
Peningkatan laba bersih ini antara lain disebabkan karena adanya capital gain dari penyertaan Jasa Marga berupa simpang susun Penjaringan pada ruas JORR W1 yang setara dengan 23% kepemilikan saham di ruas tersebut. Diluar kontribusi tersebut laba bersih tetap tumbuh sebesar 10%.
JasaMarga juga membukukan peningkatan pendapatan sebesar 4,75% di kuartal III-2009 menjadi Rp 2,618 triliun dari periode yang sama tahun sebelumnya yang sebesar Rp 2,499 triliun.
Peningkatan pendapatan pada TW III tersebut antara lain disebabkan meningkatnya volume lalu lintas pada periode yang sama sebesar 3,76%. Konsistensi tersebut juga terlihat dari rasio dari EBITDA margin yang berada di tingkat 57% baik di TW III tahun 2008 maupun di TW III 2009.
Laba Lippo Karawaci Naik Tipis 6,13%
PT Lippo Karawaci Tbk (LPKR) mencatat kenaikan tipis laba bersih sampai triwulan III-2009 yaitu sebesar 6,13% menjadi Rp 307,66 miliar di banding periode yang sama tahun sebelumnya.
Kenaiknan laba bersih ini dipicu oleh pendapatan perseroan yang juga merangkak naik sebesar 154,317 miliar.
Jumat, 30 Oktober 2009
BUMI Resources
Pls read it carefully. Overall, 3Q09 operating performance is looking good and better than 2Q09.
Current share weakness provides buying opportunity as bumi has dropped sharply by 30% from highest level this year. We maintain BUY call with TP Rp3625/shr.,
The Maruwai coking coal asset is interesting and Bumi has expressed specific interest in it.
Bumi is conducting a limited audit review in Q309 and, hence, will publish its financials for Jan/Sep 09 by 30 Nov '09.
A preview, however, of the operating metrics for Q309, however, indicate :-
A) record breaking Q309 production (Jul/Sep 09) which annualises to a 70 m tpa rate - never ever achieved before.
B) matched by record Q309 sales. (Jul/Sep09)annualising to 62 m tpa rate.
C) average fob price (FY09 est) in early $60's/ton
D) comfortable inventory which augurs well for Q409 sales.
Current share weakness provides buying opportunity as bumi has dropped sharply by 30% from highest level this year. We maintain BUY call with TP Rp3625/shr.,
The Maruwai coking coal asset is interesting and Bumi has expressed specific interest in it.
Bumi is conducting a limited audit review in Q309 and, hence, will publish its financials for Jan/Sep 09 by 30 Nov '09.
A preview, however, of the operating metrics for Q309, however, indicate :-
A) record breaking Q309 production (Jul/Sep 09) which annualises to a 70 m tpa rate - never ever achieved before.
B) matched by record Q309 sales. (Jul/Sep09)annualising to 62 m tpa rate.
C) average fob price (FY09 est) in early $60's/ton
D) comfortable inventory which augurs well for Q409 sales.
Reuters US STOCKS-Wall St jumps as GDP growth spurs optimism
* GDP turns positive in Q3, fuels recovery hopes
* P&G and Colgate beat profit views, Exxon misses
* Dow up 2.1 pct; S&P 500 up 2.3 pct, Nasdaq up 1.8 pct
* For up-to-the-minute market news, click [STXNEWS/US] (Adds new paragraphs on VIX, volume and advance/decline figures)
By Ellis Mnyandu
NEW YORK, Oct 29 (Reuters) - U.S. stocks logged their best one-day percentage gain in three months on Thursday as investors saw data showing the U.S. economy returned to growth in the third quarter as brightening the outlook for profits.
The government's first estimate of U.S. gross domestic product showed the economy expanded at an annual rate of 3.5 percent in the third quarter, suggesting it was emerging from the worst recession in 70 years. The quarter of growth was the first after more than a year of contraction in GDP. For details, see [ID:nN29354547]
Equity gains were widespread, with big manufacturers, technology, financials, energy and the materials sectors all benefiting. The S&P 500 and the Nasdaq halted a four-day rout.
Sentiment was also boosted by stronger-than-expected quarterly results from consumer product heavyweights Procter & Gamble Co (PG.N) and Colgate-Palmolive Co (CL.N).
The GDP report served as more affirmation of investors' recent bets on the recovery, which fueled a sharp advance from the 12-year lows of early March.
"We see today that the optimism about corporate earnings reports is just being confirmed in the GDP report," said Kenneth Kamen, president of Mercadien Asset Management in Hamilton, New Jersey. "We are starting to see the economy really recover and GDP picking up." more...
* P&G and Colgate beat profit views, Exxon misses
* Dow up 2.1 pct; S&P 500 up 2.3 pct, Nasdaq up 1.8 pct
* For up-to-the-minute market news, click [STXNEWS/US] (Adds new paragraphs on VIX, volume and advance/decline figures)
By Ellis Mnyandu
NEW YORK, Oct 29 (Reuters) - U.S. stocks logged their best one-day percentage gain in three months on Thursday as investors saw data showing the U.S. economy returned to growth in the third quarter as brightening the outlook for profits.
The government's first estimate of U.S. gross domestic product showed the economy expanded at an annual rate of 3.5 percent in the third quarter, suggesting it was emerging from the worst recession in 70 years. The quarter of growth was the first after more than a year of contraction in GDP. For details, see [ID:nN29354547]
Equity gains were widespread, with big manufacturers, technology, financials, energy and the materials sectors all benefiting. The S&P 500 and the Nasdaq halted a four-day rout.
Sentiment was also boosted by stronger-than-expected quarterly results from consumer product heavyweights Procter & Gamble Co (PG.N) and Colgate-Palmolive Co (CL.N).
The GDP report served as more affirmation of investors' recent bets on the recovery, which fueled a sharp advance from the 12-year lows of early March.
"We see today that the optimism about corporate earnings reports is just being confirmed in the GDP report," said Kenneth Kamen, president of Mercadien Asset Management in Hamilton, New Jersey. "We are starting to see the economy really recover and GDP picking up." more...
Bloomberg U.S. Economy: Consumers, Government Propel Growth
Oct. 29 (Bloomberg) -- The U.S. economy returned to growth in the third quarter after a yearlong contraction as government incentives spurred consumers to spend more on homes and cars.
The world’s largest economy expanded at a 3.5 percent pace from July through September, figures from the Commerce Department showed today in Washington. Household purchases climbed 3.4 percent, the most in two years.
Policy makers will now focus on whether the recovery, supported by government spending and tax credits, can be sustained into 2010 and generate jobs. The record $1.4 trillion budget deficit means President Barack Obama has little room for maneuver as he tries to keep unemployment from rising above 10 percent, while Federal Reserve policy makers wind down emergency programs in a bid to prevent a surge in inflation.
“Consumers will feel that the news is getting better, but not good,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, and the top economic forecaster last year according to a survey by Bloomberg Markets magazine, said in an interview. Americans “are not going to see businesses out there hiring a whole lot of people and the unemployment rate is likely to continue to rise.”
Stocks jumped and Treasuries declined after the report. The Standard & Poor’s 500 Index was up 2.3 percent, the most since July 23, to 1,066.11 at 4:05 p.m. in New York. The yield on the 10-year Treasury note rose eight basis points to 3.49 percent. A basis point is 0.01 percentage point. more...
The world’s largest economy expanded at a 3.5 percent pace from July through September, figures from the Commerce Department showed today in Washington. Household purchases climbed 3.4 percent, the most in two years.
Policy makers will now focus on whether the recovery, supported by government spending and tax credits, can be sustained into 2010 and generate jobs. The record $1.4 trillion budget deficit means President Barack Obama has little room for maneuver as he tries to keep unemployment from rising above 10 percent, while Federal Reserve policy makers wind down emergency programs in a bid to prevent a surge in inflation.
“Consumers will feel that the news is getting better, but not good,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, and the top economic forecaster last year according to a survey by Bloomberg Markets magazine, said in an interview. Americans “are not going to see businesses out there hiring a whole lot of people and the unemployment rate is likely to continue to rise.”
Stocks jumped and Treasuries declined after the report. The Standard & Poor’s 500 Index was up 2.3 percent, the most since July 23, to 1,066.11 at 4:05 p.m. in New York. The yield on the 10-year Treasury note rose eight basis points to 3.49 percent. A basis point is 0.01 percentage point. more...
The Australian China may seek thermal coal elsewhere if Australian export costs rise, says report
CHINA is likely to turn to alternative markets for thermal coal if the cost and availability of Australia's exports are affected by carbon taxes and environmental concerns.
A study, released today by the University of Queensland and entitled “Coal and the Commonwealth”, said China, an increasing importer of thermal coal, would probably look to Indonesia and Russia for supply, if Australia’s exports were affected by carbon taxes and environmental concerns.
“However the ability of these countries to sustain supply to China is questionable,” the report found.
“In the event of volatility in supply China could revert to exploiting reserves of inferior quality coals located in its central and southern provinces.
“It is therefore in the world’s best interests to continue to make low emission Australian coal available at competitive world prices.”
The report also outlined the emerging new technologies for coal and the rise of the coal seam gas industry.
The report, edited by Professors Peter Knights and Michael Hood, said proven, probable and possible reserves of CSG now exceed 800 million tonnes -- larger than the LN G reserves off the north and west coasts of Australia.
“With over $18 billion of projects in the planning, the CSG industry has the potential to be the next great industry for Australia,” the report said.
The concept of a “cleaner coal” is shifting in Australia towards low emission coal technologies, the report said.
The Australian reported today that according to an audit by the Rudd government's own global carbon capture and storage institute, clean coal power stations were not viable until the carbon price reached a minimum of $60 a tonne -- a level the Australian government did not anticipate until almost 2030.
The new $100 million-a-year institute found the business case for clean coal technology could only work if governments helped build the first commercial-size carbon capture and storage power plants on a "field of dreams", or "build it and they will come", basis.
Resources Minister Martin Ferguson recently said as the world's largest exporter of coal and a nation which derives around 80 per cent of its electricity from coal, it was vital that Australia made technological progress on CCS -- and soon.
Today's report, commissioned by Peabody Energy, said Australia had sufficient CCS capacity to outlast its reserves of coal.
Twelve CCS demonstration programs worth in excess of $1 billion are currently underway in Australia.
“Australia, because of its vested interest in continuing to reap the economic benefits from its plentiful coal resources and its heavy reliance on coal as an energy resource, is among the world leaders in the development of these low emissions technologies,” the report said.
A study, released today by the University of Queensland and entitled “Coal and the Commonwealth”, said China, an increasing importer of thermal coal, would probably look to Indonesia and Russia for supply, if Australia’s exports were affected by carbon taxes and environmental concerns.
“However the ability of these countries to sustain supply to China is questionable,” the report found.
“In the event of volatility in supply China could revert to exploiting reserves of inferior quality coals located in its central and southern provinces.
“It is therefore in the world’s best interests to continue to make low emission Australian coal available at competitive world prices.”
The report also outlined the emerging new technologies for coal and the rise of the coal seam gas industry.
The report, edited by Professors Peter Knights and Michael Hood, said proven, probable and possible reserves of CSG now exceed 800 million tonnes -- larger than the LN G reserves off the north and west coasts of Australia.
“With over $18 billion of projects in the planning, the CSG industry has the potential to be the next great industry for Australia,” the report said.
The concept of a “cleaner coal” is shifting in Australia towards low emission coal technologies, the report said.
The Australian reported today that according to an audit by the Rudd government's own global carbon capture and storage institute, clean coal power stations were not viable until the carbon price reached a minimum of $60 a tonne -- a level the Australian government did not anticipate until almost 2030.
The new $100 million-a-year institute found the business case for clean coal technology could only work if governments helped build the first commercial-size carbon capture and storage power plants on a "field of dreams", or "build it and they will come", basis.
Resources Minister Martin Ferguson recently said as the world's largest exporter of coal and a nation which derives around 80 per cent of its electricity from coal, it was vital that Australia made technological progress on CCS -- and soon.
Today's report, commissioned by Peabody Energy, said Australia had sufficient CCS capacity to outlast its reserves of coal.
Twelve CCS demonstration programs worth in excess of $1 billion are currently underway in Australia.
“Australia, because of its vested interest in continuing to reap the economic benefits from its plentiful coal resources and its heavy reliance on coal as an energy resource, is among the world leaders in the development of these low emissions technologies,” the report said.
Palmoil HQ Crude Palm Oil Ends Up On Likely Recovery In Exports, Crude Oil
Crude palm oil futures on Malaysia's derivatives exchange rebounded Thursday, led by gains in commodities markets and due to projections of a marginal rise in export numbers, said trade participants.The benchmark January contract on the Bursa Malaysia Derivatives ended MYR37 or 1.7% higher at MYR2,189 a metric ton after moving in a MYR2,130-MYR2,195/ton range.
Traders and shipping executives said Malaysia's palm oil exports for October may rise 10%-14% on month.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. put September's exports at 1.23 million and 1.27 million tons, respectively.
Prices tumbled at the start of trading on overnight losses in crude and soyoil, but talk of a likely rise in exports trickled in, leading to a recovery in palm oil futures in the afternoon session.
Many investors also covered their shorts toward the end of trade on the BMD, taking their lead from a rise in commodity markets.
Light, sweet crude for December delivery on the New York Mercantile Exchange remained in positive territory in the afternoon, trading 32 cents higher at $77.78 a barrel at 1007 GMT.
December soyoil on the Chicago Board of Trade was 30 points higher at 37.16 cents a pound by the end of trading on the BMD.
The vessel line-up at East Malaysian ports has been fairly strong over the past few days, said a Kuala Lumpur-based shipping executive with operations in East Malaysia, indicating importers may have stepped up purchases when palm oil prices declined.
Cargo surveyors are expected to issue end-October export data Monday.
But even as exports may rise in October, gains on the BMD were capped by a likely rise in palm oil stocks, said traders.
"Even though market rumors of a rise in exports to 1.4 million tons are encouraging, the market is still fixated on ballooning stocks as (palm oil) production rises," said a senior executive from a Kuala Lumpur-based commodities brokerage.
Cash palm olein for January/February/March traded at $665/ton and $670/ton, free on board Malaysian ports, said a Singapore-based trading executive.
He added that the bid-offer gap was about $7.50 apart.
Cash CPO for prompt shipment was offered MYR20 higher at MYR2,180/ton.
A total of 14,429 lots of CPO were traded on the BMD versus 18,074 lots Wednesday.
Open interest stood at 84,210 lots Thursday, up from 82,330 lots. One lot is equivalent to 25 tons.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Nov 09 2,179 2,150 Up 29 2,179 2,129
Dec 09 2,170 2,150 Up 20 2,184 2,125
Jan 10 2,189 2,152 Up 37 2,195 2,130
Feb 10 2,199 2,157 Up 42 2,201 2,138
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
Palmoil HQ High port stocks damp Chinese demand for palm oil
China, the world’s second largest vegetable oil buyer, has slowed palm oil purchases by 20 to 25 percent this month amid swelling stocks at its ports, which may weaken exports and put pressure on prices.Traders say China’s palm oil stocks are up 25 percent to half a million tonnes, a marked contrast to its port soybean stocks, which have fallen by as much as half in the past three months to 2-3 million tonnes.
Soy imports are expected to surge as China’s food processors try to keep up with soyoil demand but on the palm oil front, China just bought 340,000 tonnes of mostly refined palm olein from Malaysia compared to the monthly 400,000-450,000 tonnes.
“Chinese buyers are not even price sensitive about palm oil these days,” said a Singapore-based trader who deals regularly with the China market.
“They usually run away when refined palm oil prices are $650 a tonne but now that equation does not work. They are just buying hand-to-mouth, very small cargoes, as stocks are large.”
Refined palm olein prices now stand at $670 a tonne and traders expect the cash market to weaken on the lack of strong demand. Malaysia’s exports, which had a strong performance in the first half of October, have started to soften.
INDIA BUYS
India has been buying more. Cargo surveyor data for Malaysia’s Oct. 1-25 showed that the world’s top buyer of vegetable oils snapped up 38 percent more palm oil at 86,010 tonnes compared to the same period a month ago.
This week, India bought 20,000 tonnes of crude palm oil from Malaysia and Indonesia at $650 and $680 a tonne based on cost, insurance and freight (CIF), traders said. There may be new orders if crude palm oil prices fall to $625-$630 a tonne.
Cargoes would be smaller though, due to the incoming soybean harvest in India, traders say. Prices of the oilseed have fallen to 21,500 rupees ($452) a ton this week compared to 22,500 rupees a week ago as more soybeans entered the market.
“The new crushing season started this month and soybean arrivals have been gaining pace. Soyoil imports from the U.S. are non-existent for now,” said a leading trader from the Indian port city of Mumbai.
But India is on the lookout for soyoil cargoes for Dec. and Jan. delivery once the soybean crop gets processed, other dealers say.
They say orders will be directed mostly at Brazil and Argentina, which are expected to produce a bumper soybean crop after suffering from drought this year.
Palmoil HQ Malaysia’s IOI eyes $292 mln refinery expansion-paper
IOI Corp, Malaysia’s second-largest palm oil producer, will invest one billion ringgit ($292.4 million) to boost its refineries to meet strong global demand for palm oil, the New Straits Times reported, citing its chairman.
IOI shareholders yesterday approved the company’s 1.2 billion ringgit rights offer, the bulk of which will be used to expand and upgrade its refineries and specialty fats plants in Malaysia and the Netherlands.
“About 1 billion ringgit will go to expanding our refineries in Pasir Gudang (in the southern Malaysian state of Johor) and Rotterdam,” said IOI’s Executive Chairman Lee Shin Cheng.
IOI, which owns palm oil estates in Malaysia and Indonesia, is hopeful that palm oil prices will rise to between 2,200 ringgit and 2,500 ringgit per tonne in the next few months, he said.
Palm oil prices on Malaysia’s derivatives market have been trading at about 2,000 ringgit to 2,200 ringgit in the past two months.
“Palm oil, being a very affordable vegetable oil, continues to see strong demand. That’s why we’re expanding capacity,” said Lee.
Malaysia is the world’s second-largest palm oil producer after Indonesia.
IOI shareholders yesterday approved the company’s 1.2 billion ringgit rights offer, the bulk of which will be used to expand and upgrade its refineries and specialty fats plants in Malaysia and the Netherlands.
“About 1 billion ringgit will go to expanding our refineries in Pasir Gudang (in the southern Malaysian state of Johor) and Rotterdam,” said IOI’s Executive Chairman Lee Shin Cheng.
IOI, which owns palm oil estates in Malaysia and Indonesia, is hopeful that palm oil prices will rise to between 2,200 ringgit and 2,500 ringgit per tonne in the next few months, he said.
Palm oil prices on Malaysia’s derivatives market have been trading at about 2,000 ringgit to 2,200 ringgit in the past two months.
“Palm oil, being a very affordable vegetable oil, continues to see strong demand. That’s why we’re expanding capacity,” said Lee.
Malaysia is the world’s second-largest palm oil producer after Indonesia.
NISP Flash Note on Semen Gresik - Excellent 9M09 Result
• Semen Gresik has released its un-audited 9M09 result which came in slightly higher than our numbers on both financial and operational estimates. However, the company’s 9M09 profit was way above consensus estimate thus we believe there shall be an upgrade on consensus numbers in the future.
• During 9M09, Semen Gresik booked Rp10.4tn revenue, up by 18.3% YoY (+2.7% QoQ) compared to the same period last year of just Rp8.8tn and appeared to be in-line with consensus, accounting for 76.6% estimates, but above our expectation at 79.2% of our full year forecast. The increase in revenue was mainly due to 20.1% YoY increase in company’s average selling price despite 1.5% YoY decline in sales volume.
• The company’s 9M09 bottom line grew by 34.4% YoY (+5.9% QoQ) to reach Rp2.4tn compared to previous year achievement of Rp1.8tn. The figure beat consensus and our estimate, accounting for 82.8% of consensus and 79.2% of our full year estimates. We believe there should be an upgrade in consensus numbers in near future especially as we believe the company’s 4Q09 performance should be better than previous quarters on the back of increasing cement demand toward year end.
• Margins improved across the board as company’s gross, operating and net margins reached 45.7%, 29.4% and 23.1% as compared to previous years achievement of just 43.0%, 27.2% and 20.4%, respectively. This was mainly due to the 20.1% YoY hike in average selling price that outpaced the production cost increase of +14.4% YoY.
• Meanwhile on the operational side, Semen Gresik’s sales volume in 9M09 reached 12.9mn tons or down by 1.5% YoY, comprising a 12.4mn tons domestic sales (+0.2% YoY) and a 0.6mn tons export sales (-28.5% YoY). The company’s achievement during 9M09 outperformed the cement sector as the sector still experienced a 6.1% YoY decrease in total output and a 4.9% YoY decrease in domestic consumptions.
• Supported by strong growth from Eastern Indonesia market, SMGR’s domestic market share in 9M09 improved to 45.5% from 43.3% in 9M08. Meawhile, INTP and SMCB’s shares shrank to 29.7% and 13.2% from 32.5% and 14.2% in the same period last year.
• On a quarterly basis, Semen Gresik posted a relatively flat performance mainly impeded by the festive seasons during Sept ’09. The company booked a 3.9% QoQ increase in sales volume to 4.6mn tons, resulting in 2.7% QoQ growth in revenue to Rp3.6tn from Rp3.5tn in 2Q09. Nevertheless, the company booked higher net profit growth of 5.9% QoQ to Rp1.2tn on the back of decreasing production cost that translates into margin improvements.
• Going forward, we expect the company to post better performance during 4Q09 as we believe domestic cement consumption may pick up in 4Q09 on the back of lower mortgage rates, prolonged dry season and late disbursement of government infrastructure budget. In the mean time, we are still waiting for the Oct ’09 cement consumption data before re-visiting our assumptions.
• At current price, the company is trading at 2010F PER of 11.2x and EV/EBITDA of 6.6x. We maintain our Buy recommendation on the counter.
• During 9M09, Semen Gresik booked Rp10.4tn revenue, up by 18.3% YoY (+2.7% QoQ) compared to the same period last year of just Rp8.8tn and appeared to be in-line with consensus, accounting for 76.6% estimates, but above our expectation at 79.2% of our full year forecast. The increase in revenue was mainly due to 20.1% YoY increase in company’s average selling price despite 1.5% YoY decline in sales volume.
• The company’s 9M09 bottom line grew by 34.4% YoY (+5.9% QoQ) to reach Rp2.4tn compared to previous year achievement of Rp1.8tn. The figure beat consensus and our estimate, accounting for 82.8% of consensus and 79.2% of our full year estimates. We believe there should be an upgrade in consensus numbers in near future especially as we believe the company’s 4Q09 performance should be better than previous quarters on the back of increasing cement demand toward year end.
• Margins improved across the board as company’s gross, operating and net margins reached 45.7%, 29.4% and 23.1% as compared to previous years achievement of just 43.0%, 27.2% and 20.4%, respectively. This was mainly due to the 20.1% YoY hike in average selling price that outpaced the production cost increase of +14.4% YoY.
• Meanwhile on the operational side, Semen Gresik’s sales volume in 9M09 reached 12.9mn tons or down by 1.5% YoY, comprising a 12.4mn tons domestic sales (+0.2% YoY) and a 0.6mn tons export sales (-28.5% YoY). The company’s achievement during 9M09 outperformed the cement sector as the sector still experienced a 6.1% YoY decrease in total output and a 4.9% YoY decrease in domestic consumptions.
• Supported by strong growth from Eastern Indonesia market, SMGR’s domestic market share in 9M09 improved to 45.5% from 43.3% in 9M08. Meawhile, INTP and SMCB’s shares shrank to 29.7% and 13.2% from 32.5% and 14.2% in the same period last year.
• On a quarterly basis, Semen Gresik posted a relatively flat performance mainly impeded by the festive seasons during Sept ’09. The company booked a 3.9% QoQ increase in sales volume to 4.6mn tons, resulting in 2.7% QoQ growth in revenue to Rp3.6tn from Rp3.5tn in 2Q09. Nevertheless, the company booked higher net profit growth of 5.9% QoQ to Rp1.2tn on the back of decreasing production cost that translates into margin improvements.
• Going forward, we expect the company to post better performance during 4Q09 as we believe domestic cement consumption may pick up in 4Q09 on the back of lower mortgage rates, prolonged dry season and late disbursement of government infrastructure budget. In the mean time, we are still waiting for the Oct ’09 cement consumption data before re-visiting our assumptions.
• At current price, the company is trading at 2010F PER of 11.2x and EV/EBITDA of 6.6x. We maintain our Buy recommendation on the counter.
J.P.Morgan Securities Hands-on China Series; China's coal imports reaccelerate, reaching highest quarterly level in 3Q09
China’s imports of coal reached 12.55 million tons in September, rising 6.6% from August’s level and resuming an uptrend that has seen the volume of net imports surge 2200% YoY in Q1-Q309 (see Figure 1). China is on course to become a net importer of coal for the first time this year in the face of production constraints resulting from the rationalization of small-scale mines.
After inflows dipped in August, Chinese buyers again took advantage of a decline in international thermal coal prices from mid-August. Since the end of September, domestic spot prices have gained ~11% to RMB645/ton; we expect prices to trend higher in the fourth quarter as domestic demand – particularly from the power sector – picks up at a faster pace. Coal inventory at Qinhuangdao Port (which represents about half of China’s total seaborne coal volumes) is hovering at about 4 million tons, down substantially from a 1H09 average level of 5.4 million tons. The supply-demand dynamics and pricing trends are favorable for leading Chinese producers such as China Shenhua
Energy and China Coal.
Separately, China’s sovereign wealth fund CIC is investing $500 million in SouthGobi Energy Resources, a Canadian company developing coal reserves in southern Mongolia, through a convertible debenture financing arrangement. This follows recent coal-related investments involving Indonesia’s PT Bumi Resources and Canada’s Teck resources.
We see several factors that point to support for domestic prices in the near-term and higher reliance on imports in the long-term: i) recovery in power demand, ii) supply-side constraints, iii) lower port inventories, iv) low bulk freight rates, v) a structural shortage of coking coal, and vi) railway bottlenecks.
After inflows dipped in August, Chinese buyers again took advantage of a decline in international thermal coal prices from mid-August. Since the end of September, domestic spot prices have gained ~11% to RMB645/ton; we expect prices to trend higher in the fourth quarter as domestic demand – particularly from the power sector – picks up at a faster pace. Coal inventory at Qinhuangdao Port (which represents about half of China’s total seaborne coal volumes) is hovering at about 4 million tons, down substantially from a 1H09 average level of 5.4 million tons. The supply-demand dynamics and pricing trends are favorable for leading Chinese producers such as China Shenhua
Energy and China Coal.
Separately, China’s sovereign wealth fund CIC is investing $500 million in SouthGobi Energy Resources, a Canadian company developing coal reserves in southern Mongolia, through a convertible debenture financing arrangement. This follows recent coal-related investments involving Indonesia’s PT Bumi Resources and Canada’s Teck resources.
We see several factors that point to support for domestic prices in the near-term and higher reliance on imports in the long-term: i) recovery in power demand, ii) supply-side constraints, iii) lower port inventories, iv) low bulk freight rates, v) a structural shortage of coking coal, and vi) railway bottlenecks.
CIMB Indofood Sukses Makmur Quick takes - Change of heart?
(INDF IJ / INDF.JK, NEUTRAL - Maintained, Rp2,850 - Tgt. Rp3,600, Consumer)
Maintain Neutral on Indofood with an unchanged Rp3,600 target price, based on sum-of-the-parts valuation. Barely two months after the company announced a spin-off of its noodles and food ingredient businesses into Indofood CBP, it has tweaked the structure to include virtually all branded consumer products, including its recently acquired dairy division. Whether this was by design or marked a change of heart was the first question in our mind. Regardless, the impact will not be much given noodles' dominance in the CBP business, despite the addition of a dairy business in 2009. The new structure is certainly simpler for investors to understand and probably easier for management to manage. No change in our earnings forecasts. Our unchanged target price implies 17.5x and 13x for CY10-11 P/Es respectively.
Maintain Neutral on Indofood with an unchanged Rp3,600 target price, based on sum-of-the-parts valuation. Barely two months after the company announced a spin-off of its noodles and food ingredient businesses into Indofood CBP, it has tweaked the structure to include virtually all branded consumer products, including its recently acquired dairy division. Whether this was by design or marked a change of heart was the first question in our mind. Regardless, the impact will not be much given noodles' dominance in the CBP business, despite the addition of a dairy business in 2009. The new structure is certainly simpler for investors to understand and probably easier for management to manage. No change in our earnings forecasts. Our unchanged target price implies 17.5x and 13x for CY10-11 P/Es respectively.
CIMB Astra Internasional Company update - Premium auto
(ASII IJ / ASII.JK, NEUTRAL - Maintained, Rp31,950 - Tgt. Rp36,800, Automobiles and Parts)
Maintain Neutral on Astra while introducing our end-CY10 target price of Rp36,800, still based on sum-of-the-parts valuation. Our new target implies 16x and 14x CY10-11 earnings, implicitly suggesting a slight discount to our P/E target for the market. Our target price for end-CY09 remains Rp29,500. While we agree that Astra should be re-rated on the back of the strong fundamentals of Astra Agro and UNTR, we believe it should still be valued at a discount to the market as its auto division: 1) is a thin-margin business; 2) relies on credit and third-party financing; and 3) the emergence of Yamaha could be a credible threat to its profitable motorcycle business.
Maintain Neutral on Astra while introducing our end-CY10 target price of Rp36,800, still based on sum-of-the-parts valuation. Our new target implies 16x and 14x CY10-11 earnings, implicitly suggesting a slight discount to our P/E target for the market. Our target price for end-CY09 remains Rp29,500. While we agree that Astra should be re-rated on the back of the strong fundamentals of Astra Agro and UNTR, we believe it should still be valued at a discount to the market as its auto division: 1) is a thin-margin business; 2) relies on credit and third-party financing; and 3) the emergence of Yamaha could be a credible threat to its profitable motorcycle business.
Mandiri Sekuritas Mayora Indah: Key takeaways from company visit (MYOR, Rp2,950, Under review)
We visited Mayora (MYOR) yesterday and were informed that 9M09 result still in line with company’s expectations. MYOR therefore still believe to reach Rp4.7tn sales in FY09F (+20% yoy) with gross margin stand at 23%.
The company also highlighted that the operation of its new factory has started in Aug09 and therefore possibly increase its production capacity substantially in 2010. Coupled with better demand next year, MYOR expects to book Rp5.8tn sales in FY10F, up by around 20% yoy.
Currently, Mayora is trading at PER09F of 12.5x.
The company also highlighted that the operation of its new factory has started in Aug09 and therefore possibly increase its production capacity substantially in 2010. Coupled with better demand next year, MYOR expects to book Rp5.8tn sales in FY10F, up by around 20% yoy.
Currently, Mayora is trading at PER09F of 12.5x.
Mandiri Sekuritas Astra Agro Lestari: 9M09 earnings in line with ours, but below market consensus (AALI, Rp21,600, Neutral, TP: Rp17,500)
AALI booked 9M09 earnings of Rp1.2tn (-41.4% yoy), as average selling price for CPO in the 9M09 was 20.8% lower than in the same period a year ago (Rp6,336/kg in 9M09 vs Rp7,995/kg in 9M08). This result represents around 71% of ours and 66% of market consensus.
However, on quarterly basis, the company booked substantial earnings growth (+26% qoq) but with lower margin (net margin of 20.9% in 3Q09 vs 25.9% in 2Q09). The company is aiming to boost its CPO production by building new processing mill with total capacity of 45tons FFB/hr in Jambi. As of current, AALI has 20 processing mill with total capacity of 940tons FFB/hr.
Currently, AALI is trading at PER09F of 19.4x and PER10F of 15.1x.
However, on quarterly basis, the company booked substantial earnings growth (+26% qoq) but with lower margin (net margin of 20.9% in 3Q09 vs 25.9% in 2Q09). The company is aiming to boost its CPO production by building new processing mill with total capacity of 45tons FFB/hr in Jambi. As of current, AALI has 20 processing mill with total capacity of 940tons FFB/hr.
Currently, AALI is trading at PER09F of 19.4x and PER10F of 15.1x.
Credit Suisse Emerging Markets Strategy - ISM stays above 50 - stay long GEM and GEM cyclicals
■ Stay long GEM. With an 87% correlation between the Empire State Manufacturing Index and the widely watched ISM due on 2 November, history suggests staying long GEM and GEM cyclicals. The Empire State rose in October, and this suggests the ISM staying above the 50 expansion threshold. As discussed in our 24 August GEM Strategy report, previous episodes when the ISM rose above 50 on a sustained basis were associated with a 41% rally in GEM in the 12 months after and a 65% rally in GEM cyclicals over that time period. With GEM up 14% since the ISM rose above 50, this suggests 25% further upside (MSCI EM target of 1,200 versus 967 currently).
■ We highlight nine indicators of improving fundamentals. We believe the 70% YTD rally in GEM is driven by improving fundamentals ranging from “V”-shaped recoveries in the OECD Leading Indicator, German IFO business expectations, US corporate cash flows and China PMI to emerging market bond and TED spreads. GEM’s historical P/E, dividend yield and price-to-book are just above historical averages, and are not at extremes.
■ Stay long GEM cyclicals, particularly energy. We highlight energy as our favoured cyclical (our biggest Overweight). It is the most undervalued of the four cyclical sectors and is the only cyclical sector where historical P/E is below its historical average.
■ We highlight nine indicators of improving fundamentals. We believe the 70% YTD rally in GEM is driven by improving fundamentals ranging from “V”-shaped recoveries in the OECD Leading Indicator, German IFO business expectations, US corporate cash flows and China PMI to emerging market bond and TED spreads. GEM’s historical P/E, dividend yield and price-to-book are just above historical averages, and are not at extremes.
■ Stay long GEM cyclicals, particularly energy. We highlight energy as our favoured cyclical (our biggest Overweight). It is the most undervalued of the four cyclical sectors and is the only cyclical sector where historical P/E is below its historical average.
Citigroup Astra Agro Lestari - Alert:9M09 and 3Q09 Results in a Snapshot
9M09 top line in line – AALI's 9M09 CPO sales volume increased by 8.8% YoY to 767.9k tons (80.6% of Citi's FY09E of 953.3k tons) and helped cushion the negative impact of the 20.8% YoY drop in its average CPO price to Rp6,336/kg. Overall revenues decreased by 18.4% YoY to Rp5,463bn but is still more or less in line with expectations (73.2% of Citi FY09E and 75.4% consensus).
Higher CPO sales volume also helped minimize declines in 3Q09 revenues – The 2.2% QoQ and 19.5% YoY increase in CPO sales volume to 273.9k tons helped prevent a substantial deterioration in revenues as a result of the 12.5% QoQ and 15.1% YoY decline in average CPO prices to Rp6,247/kg. AALI's overall 3Q09 revenues only declined 9.6% QoQ and 6.2% YoY.
Lackluster 9M09 margins performance – The impact of lower CPO prices YoY was also reflected in margins. Gross margin in 9M09 was down to 41.3% from 50.9% in 9M08. Gross profit was 33.8% lower YoY at Rp2,255.3bn. 9M09 OPEX was 14.5% higher YoY at Rp342.5bn, primarily due to higher tax expenses and salaries and employee benefits. This led to a 38.5% YoY decline in operating profit to Rp1,912.9bn. Operating margin at 35% dropped from 46.4% last year.
But lower fertilizer costs provide support to 3Q09 margins – Back in 1H09, AALI's fertilizer costs were still high since prices were still blended with 2008 prices (AALI still had excess fertilizer inventory from 2H08 to early 2009 when it scaled down its expansion plans back in 2008). In 2H09, we anticipate lower fertilizer costs. The 7.4% QoQ and 11.3% YoY lower COGS in 3Q09 support our view (Fertilizer costs typically accounts for 30%-40% of COGS). Margins saw only slight declines (3Q09 Gross Margin, Operating Margin, Net Profit Margin of 45.5%, 39.3% and 24.8% vs. 2Q09's 46.8%, 41.2% and 25.9% respectively).
Bottom line dragged down by forex loss – AALI still has US$87.5m sitting in its B/S, the bulk of which is mainly from the US$60m paid to AALI by Adaro as part of the settlement agreement to the hectarage overlapping issue. Meanwhile, the rupiah has strengthened from Rp10,900 (Dec 31, 2008) to Rp9,663 (Sept 30, 2009). Consequently, AALI reported a forex loss of Rp85.6bn. Overall net profit in 9M09 dropped 41.4% to Rp1,248.1bn (60% Citi FY09E; 64% consensus).
Higher CPO sales volume also helped minimize declines in 3Q09 revenues – The 2.2% QoQ and 19.5% YoY increase in CPO sales volume to 273.9k tons helped prevent a substantial deterioration in revenues as a result of the 12.5% QoQ and 15.1% YoY decline in average CPO prices to Rp6,247/kg. AALI's overall 3Q09 revenues only declined 9.6% QoQ and 6.2% YoY.
Lackluster 9M09 margins performance – The impact of lower CPO prices YoY was also reflected in margins. Gross margin in 9M09 was down to 41.3% from 50.9% in 9M08. Gross profit was 33.8% lower YoY at Rp2,255.3bn. 9M09 OPEX was 14.5% higher YoY at Rp342.5bn, primarily due to higher tax expenses and salaries and employee benefits. This led to a 38.5% YoY decline in operating profit to Rp1,912.9bn. Operating margin at 35% dropped from 46.4% last year.
But lower fertilizer costs provide support to 3Q09 margins – Back in 1H09, AALI's fertilizer costs were still high since prices were still blended with 2008 prices (AALI still had excess fertilizer inventory from 2H08 to early 2009 when it scaled down its expansion plans back in 2008). In 2H09, we anticipate lower fertilizer costs. The 7.4% QoQ and 11.3% YoY lower COGS in 3Q09 support our view (Fertilizer costs typically accounts for 30%-40% of COGS). Margins saw only slight declines (3Q09 Gross Margin, Operating Margin, Net Profit Margin of 45.5%, 39.3% and 24.8% vs. 2Q09's 46.8%, 41.2% and 25.9% respectively).
Bottom line dragged down by forex loss – AALI still has US$87.5m sitting in its B/S, the bulk of which is mainly from the US$60m paid to AALI by Adaro as part of the settlement agreement to the hectarage overlapping issue. Meanwhile, the rupiah has strengthened from Rp10,900 (Dec 31, 2008) to Rp9,663 (Sept 30, 2009). Consequently, AALI reported a forex loss of Rp85.6bn. Overall net profit in 9M09 dropped 41.4% to Rp1,248.1bn (60% Citi FY09E; 64% consensus).
Rabu, 28 Oktober 2009
Reuters Australia's Newcastle coal exports steady, queues up
PERTH, Oct 27 (Reuters) - Coal exports at Australia's
Newcastle port, the world's largest coal export terminal, were
little changed in the latest week, while ship queues rose from
a one-year low.
Exports from the eastern coast port, which ships mostly
thermal coal used in power generation, slipped 0.3 percent to
1.92 million tonnes in the week to Oct. 26, port data showed on
Tuesday.
The number of coal ships queuing off the port rose to 19,
after having fallen to a one-year low of 16 last week, while
the average waiting time for ships to load coal fell to 6.1
days.
Producer sources said the recent low queue numbers were
largely a result of fluctuation in the vessel arrival pattern
and less to do with any drop in demand.
The number of coal vessels arriving at the port, a key
indicator of demand, rose by three to 25.
For more on the port statistics, click on.
About 80 percent of the coal shipped through Newcastle is
thermal coal used mainly by power stations. Companies exporting
through the port include Xstrata Plc (XTA.L), Rio Tinto Group
(RIO.AX) (RIO.L) and Centennial Coal Ltd (CEY.AX).
Prices of power-station coal at Newcastle port, a benchmark
for Asia, gained 1.5 percent to $73.13 a tonne in the latest
week, according to the globalCOAL NEWC Index.
Newcastle port, the world's largest coal export terminal, were
little changed in the latest week, while ship queues rose from
a one-year low.
Exports from the eastern coast port, which ships mostly
thermal coal used in power generation, slipped 0.3 percent to
1.92 million tonnes in the week to Oct. 26, port data showed on
Tuesday.
The number of coal ships queuing off the port rose to 19,
after having fallen to a one-year low of 16 last week, while
the average waiting time for ships to load coal fell to 6.1
days.
Producer sources said the recent low queue numbers were
largely a result of fluctuation in the vessel arrival pattern
and less to do with any drop in demand.
The number of coal vessels arriving at the port, a key
indicator of demand, rose by three to 25.
For more on the port statistics, click on
About 80 percent of the coal shipped through Newcastle is
thermal coal used mainly by power stations. Companies exporting
through the port include Xstrata Plc (XTA.L), Rio Tinto Group
(RIO.AX) (RIO.L) and Centennial Coal Ltd (CEY.AX).
Prices of power-station coal at Newcastle port, a benchmark
for Asia, gained 1.5 percent to $73.13 a tonne in the latest
week, according to the globalCOAL NEWC Index.
Bloomberg U.S. New-Home Sales Fall as Credit Nears Expiration
Oct. 28 (Bloomberg) -- Sales of new U.S. homes unexpectedly fell in September, a sign the housing recovery may lose momentum after a government tax credit expires. Sales decreased 3.6 percent to a 402,000 annual pace, lower than the median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today in Washington. The median price of a new home dropped 9.1 percent from September 2008.
Contracts signed last month will probably not be able to close before an $8,000 first-time homebuyer tax credit expires at the end of November, raising concern the market will retrench in coming months as unemployment and foreclosures climb. Economists view stabilization in housing as key to any rebound from the worst recession in seven decades. more...
Bloomberg Oil Extends Decline After Unexpected Gasoline Supply Increase
Oct. 28 (Bloomberg) -- Crude oil futures extended declines after a U.S. government report showed an unexpected increase in supplies of gasoline.
Gasoline inventories climbed 1.62 million barrels to 208.6 million in the week ended Oct. 23, the Energy Department said today in a weekly report. Stockpiles were forecast to decline by 1 million barrels, according to the median of 17 analyst estimates in a Bloomberg News survey.
Inventories of crude oil rose 778,000 barrels to 339.9 million, the department said. Supplies were forecast to increase by 1.91 million barrels.
Crude oil for December delivery fell $1.44, or 1.8 percent, to $78.11 a barrel at 10:35 a.m. on the New York Mercantile Exchange.
Oil traded at $78.61 a barrel before the release of the report at 10:30 a.m. in Washington.
Oil also dropped as the MSCI World Index fell for a seventh straight day, the longest losing streak since January.
“The stock market appears to have hit a ceiling and that raises questions about whether the oil market has as well,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “If the stock market drops, oil is vulnerable because it’s risen more than is justified by the fundamentals.”
The Organization of Petroleum Exporting Countries will raise oil output if there’s a “real” shortage of supply, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said yesterday in Ras Laffan, Qatar. The 12-member group is scheduled to meet Dec. 22 in Luanda, Angola, to review production targets.
To contact the reporter on this story: Mark Shenk in New York at
Gasoline inventories climbed 1.62 million barrels to 208.6 million in the week ended Oct. 23, the Energy Department said today in a weekly report. Stockpiles were forecast to decline by 1 million barrels, according to the median of 17 analyst estimates in a Bloomberg News survey.
Inventories of crude oil rose 778,000 barrels to 339.9 million, the department said. Supplies were forecast to increase by 1.91 million barrels.
Crude oil for December delivery fell $1.44, or 1.8 percent, to $78.11 a barrel at 10:35 a.m. on the New York Mercantile Exchange.
Oil traded at $78.61 a barrel before the release of the report at 10:30 a.m. in Washington.
Oil also dropped as the MSCI World Index fell for a seventh straight day, the longest losing streak since January.
“The stock market appears to have hit a ceiling and that raises questions about whether the oil market has as well,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “If the stock market drops, oil is vulnerable because it’s risen more than is justified by the fundamentals.”
The Organization of Petroleum Exporting Countries will raise oil output if there’s a “real” shortage of supply, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said yesterday in Ras Laffan, Qatar. The 12-member group is scheduled to meet Dec. 22 in Luanda, Angola, to review production targets.
To contact the reporter on this story: Mark Shenk in New York at
Palmoil HQ Crude palm oil down for 3rd day on selling pressure
Crude palm oil futures on Malaysia’s derivatives exchange fell for the third day Wednesday, tumbling as much as 1.3% on selling pressure amid weakness across commodity markets, including soyoil and crude, said trade participants.The benchmark January contract on the Bursa Malaysia Derivatives ended down MYR18 at MYR2,152 a metric ton, after moving in MYR2,140-MYR2,186/ton range.
Palm oil prices started the day higher but slipped into negative territory at midmorning as a rebound in the dollar halted a rally in commodity markets, including palm oil, trade participants said.
Prices eased further in afternoon trade as investors continued to liquidate positions to take profit.
Indopremier PGAS (BUY TP Rp 4000)
Strong In-line 9M09 Results
PGAS delivered strong 9M09 results in-line with our estimates, with revenues increasing 50% YoY and realizing 78% of our FY09F estimate. On the back of SSWJ completion and higher demand from industrial customers, distribution volume rose 37% YoY to 776 mmscfd, slightly exceeding our FY09F figure of 755 mmscfd. Lower than expected G&A expenses (operating expenses at 68% of FY09F) led to 81% realization of our FY09F operating income. The strengthening of IDR against USD and JPY resulted in a forex gain of Rp911bn, lifting net profit by 145% YoY to Rp4,401bn. For 4Q09, we expect distribution volume to remain flat as many industries will close during December holidays and the delivery of 40 mmscfd of gas to PLTU Cilegon will only start flowing in November. We also expect slightly more forex gains as the JPY is expected to depreciate further from the IDR107.8/JPY reported for 9M09.
Valuation
We reiterate our BUY rating with TP of Rp4,000, which we derived by applying WACC of 11% and LTG of 3%. Our TP still represents 8.1% upside from the current price of Rp3,700 and implies 17.3x FY09F PER and 7.82x FY09F PBV.
PGAS delivered strong 9M09 results in-line with our estimates, with revenues increasing 50% YoY and realizing 78% of our FY09F estimate. On the back of SSWJ completion and higher demand from industrial customers, distribution volume rose 37% YoY to 776 mmscfd, slightly exceeding our FY09F figure of 755 mmscfd. Lower than expected G&A expenses (operating expenses at 68% of FY09F) led to 81% realization of our FY09F operating income. The strengthening of IDR against USD and JPY resulted in a forex gain of Rp911bn, lifting net profit by 145% YoY to Rp4,401bn. For 4Q09, we expect distribution volume to remain flat as many industries will close during December holidays and the delivery of 40 mmscfd of gas to PLTU Cilegon will only start flowing in November. We also expect slightly more forex gains as the JPY is expected to depreciate further from the IDR107.8/JPY reported for 9M09.
Valuation
We reiterate our BUY rating with TP of Rp4,000, which we derived by applying WACC of 11% and LTG of 3%. Our TP still represents 8.1% upside from the current price of Rp3,700 and implies 17.3x FY09F PER and 7.82x FY09F PBV.
CIMB AKR Corporindo Quick takes - Small step forward, giant leap beyond?
(AKRA IJ / AKRA.JK, OUTPERFORM - Maintained, Rp1,180 - Tgt. Rp1,800, Chemicals)
We maintain our Outperform rating on Akra with a higher DCF-based target price of Rp1,800 (from Rp1,140) after rolling it over to 2010 and factoring in a boost from its newly-won contract from the government to distribute subsidised fuel. We believe AKR is in a good position to profit from subsidised fuel de-regulation in Indonesia, given its already leading position as a private-petrol distributor, which could be further boosted by new capacity at end-2009 from a JV with Royal Vopak. Our earnings estimates have been adjusted by 1-2% for FY09-11 to reflect the additional distribution volume.
We maintain our Outperform rating on Akra with a higher DCF-based target price of Rp1,800 (from Rp1,140) after rolling it over to 2010 and factoring in a boost from its newly-won contract from the government to distribute subsidised fuel. We believe AKR is in a good position to profit from subsidised fuel de-regulation in Indonesia, given its already leading position as a private-petrol distributor, which could be further boosted by new capacity at end-2009 from a JV with Royal Vopak. Our earnings estimates have been adjusted by 1-2% for FY09-11 to reflect the additional distribution volume.
CLSA Matahari (MPPA IJ), strong expansion, sub-par profitability
Our machine-like (productivity-wise) analyst Swati writes another report on retail sector: Matahari (MPPA IJ). The company has done a great job in creating footprints, boasting 85 Dept Stores and 120 Food Stores in more than 50 cities in Indonesia. And it will continue to expand aggressively. Contribution from outside Java is around 37% and still growing.
The stock is not cheap at 24x 2010 PER with ROAE lingering around 7-8% for the past seven years. It is a combination of low profitability per sqm (US$28/sqm at hypermart, which makes up almost 59% if sales) and series of cash call in the market.
To fund its aggressive expansion campaign, Matahari has done four rights issues, in addition to bond issuance. The rights issue in 2007 involved an 80% dilution pre-warrant.
Key points from the report:
MPPA’s profitability has lagged growth as net margins are low at 1-2%.
While top line grew by 9.5% in last three years, earnings grew by -6.3% pa.
ROE has declined for four consecutive years and is one of the lowest in the industry.
Valuations too look stretched at 24x 2010 consensuses PE.
Dept store business to spin off, transferring asset/liabilities to a listed company called Pacific Utama. Not entirely clear to us how this will unlock value.
Competition to heat up further: The Lotte Group is coming, with recent acquisition of 19 Makro stores.
Longer payback period: every US$ invested by MPPA into its stores (department/hypermarts) has a payback of 12 years compared to 6 years at RALS and 3 years at ACES.
The stock is not cheap at 24x 2010 PER with ROAE lingering around 7-8% for the past seven years. It is a combination of low profitability per sqm (US$28/sqm at hypermart, which makes up almost 59% if sales) and series of cash call in the market.
To fund its aggressive expansion campaign, Matahari has done four rights issues, in addition to bond issuance. The rights issue in 2007 involved an 80% dilution pre-warrant.
Key points from the report:
MPPA’s profitability has lagged growth as net margins are low at 1-2%.
While top line grew by 9.5% in last three years, earnings grew by -6.3% pa.
ROE has declined for four consecutive years and is one of the lowest in the industry.
Valuations too look stretched at 24x 2010 consensuses PE.
Dept store business to spin off, transferring asset/liabilities to a listed company called Pacific Utama. Not entirely clear to us how this will unlock value.
Competition to heat up further: The Lotte Group is coming, with recent acquisition of 19 Makro stores.
Longer payback period: every US$ invested by MPPA into its stores (department/hypermarts) has a payback of 12 years compared to 6 years at RALS and 3 years at ACES.
BNP Paribas Unilever Indonesia - Competitive pressure offset by lower input costs
Expect good 3Q09 results, despite intensifying competition.
Margin erosion avoided by lower input prices, strong currency.
One of the best companies in Indonesia, but valuation stretched.
Expect good 3Q09 results
Despite rising competition in several of its product areas, we expect Unilever to deliver another good set of results. Volume growth should remain strong at around 7-8% y-y and 9M09 revenue should grow by 17.5% y-y. Even though we expect gross margins to decline y-y as the company lowers prices for some products due to competition, and to gain market share, the overall impact on EBIT margin is likely to be neutral. They should remain at the 22-23% level, due to: 1) lower input costs as a result of lower commodity prices and a stronger IDR; and 2) a strong brand line up, enabling it to adjust marketing spend among the different brands while maintaining the overall spend. We expect the 9M09 earnings to account for around 82% of our 2009 forecast.
Unilever is a formidable competitor
Intensifying competition is an undeniable fact given the attractiveness of the Indonesian consumers and high margins and returns. For now, at least, we expect margins to be sustainable thanks to a favourable raw material and currency situation; in the medium-term margin erosion is inevitable. So far Unilever has proven to be a very formidable competitor, backed by its strong product line and superior grip on distribution to traditional outlets (still accounting for 60% of the total market). Unilever has been consistent in defending its market share, sending signals to competitors that it will not yield market share without a fight. Management is always on the alert and quick to respond.
Priced to perfection, HOLD
The sharp re-rating has put the stock close to its all-time high multiple of 29.8x 2009E and 25.9x 2010E. While a premium is definitely deserved due to Unilever’s superior profitability, we believe this is already reflected in our TP of IDR10,500, based on a P/E of 26x 2010, derived by applying a premium to the market’s P/E based on the premium differential between Unilever’s ROE and the market’s. Maintain HOLD as no sizeable alternative is available. Investors with a higher risk appetite might want to switch to Kalbe Farma (KLBF IJ; BUY; TP: IDR1,630), which looks undervalued. It trades at a P/E of 11x 2010E, despite also being a beneficiary of the strong currency, lower input costs and rising disposable income.
Margin erosion avoided by lower input prices, strong currency.
One of the best companies in Indonesia, but valuation stretched.
Expect good 3Q09 results
Despite rising competition in several of its product areas, we expect Unilever to deliver another good set of results. Volume growth should remain strong at around 7-8% y-y and 9M09 revenue should grow by 17.5% y-y. Even though we expect gross margins to decline y-y as the company lowers prices for some products due to competition, and to gain market share, the overall impact on EBIT margin is likely to be neutral. They should remain at the 22-23% level, due to: 1) lower input costs as a result of lower commodity prices and a stronger IDR; and 2) a strong brand line up, enabling it to adjust marketing spend among the different brands while maintaining the overall spend. We expect the 9M09 earnings to account for around 82% of our 2009 forecast.
Unilever is a formidable competitor
Intensifying competition is an undeniable fact given the attractiveness of the Indonesian consumers and high margins and returns. For now, at least, we expect margins to be sustainable thanks to a favourable raw material and currency situation; in the medium-term margin erosion is inevitable. So far Unilever has proven to be a very formidable competitor, backed by its strong product line and superior grip on distribution to traditional outlets (still accounting for 60% of the total market). Unilever has been consistent in defending its market share, sending signals to competitors that it will not yield market share without a fight. Management is always on the alert and quick to respond.
Priced to perfection, HOLD
The sharp re-rating has put the stock close to its all-time high multiple of 29.8x 2009E and 25.9x 2010E. While a premium is definitely deserved due to Unilever’s superior profitability, we believe this is already reflected in our TP of IDR10,500, based on a P/E of 26x 2010, derived by applying a premium to the market’s P/E based on the premium differential between Unilever’s ROE and the market’s. Maintain HOLD as no sizeable alternative is available. Investors with a higher risk appetite might want to switch to Kalbe Farma (KLBF IJ; BUY; TP: IDR1,630), which looks undervalued. It trades at a P/E of 11x 2010E, despite also being a beneficiary of the strong currency, lower input costs and rising disposable income.
DBS Telecommunications
Be careful with country selection!
• Be mindful of rising competition in Singapore, India, China
and high valuations in Malaysia.
• We prefer Indonesia and Thailand for eased competition
and regulatory benefits respectively.
• PT Telkom is our top pick for 23% potential upside. We
also like AIS and DTAC although the stocks may not
outperform in the near term due to negative news flow.
• Avoid Axiata and StarHub as street estimates could be
revised down.
PT Telkom benefiting from “too rational” competitors.
Recent 3Q09 Indosat results indicate that cellular tariffs are not declining in Indonesia. Rather Indosat’s focus on raising tariffs led to 0.5% qoq decline in its subscriber base in 3Q09 on top of 13% qoq decline in 2Q09. PT Telkom should be a key
beneficiary of Indosat’s loss, as the other competitor Excelcomindo is also moving away from price-based competition. Excelcomindo is using “Fun & Excitement” rather
than “lower pricing” as its key branding strategy now. Weaker balance sheets of Excelcomindo and Indosat imply limited capex, forcing them to rationalize their tariff structure. Overall, we see upside rather than downside risk to PT
Telkom’s consensus FY09F/10F estimates. Currently, PT Telkom is trading at similar EV/EBITDA as Indosat despite higher growth prospects and better cash flow generation.
Thai telco stocks may not outperform in the near term but offer compelling upside over the medium term. While the regulator NTC has set Dec 09 as the time frame for 3G-licence auction, it could be postponed by another 2 months, in our view. In order to address the Ministry’s concerns, NTC may have to re-engage in public consultation and draft a new 3G plan. In the near term, performance of Thai stocks could remain subdue due to negative news flow about postponement of 3G award. DTAC should be a bigger beneficiary of 3G due to its higher regulatory fee and higher gearing than AIS. However, AIS is more appealing to investors, who want to ride on 3G award but have lower risk appetites.
Rising competition may lower next year street estimates for StarHub and Axiata. StarHub faces challenges in its pay TV and broadband businesses from SingTel and M1. Our FY10F earnings estimates for StarHub are 5% below the consensus.
• Be mindful of rising competition in Singapore, India, China
and high valuations in Malaysia.
• We prefer Indonesia and Thailand for eased competition
and regulatory benefits respectively.
• PT Telkom is our top pick for 23% potential upside. We
also like AIS and DTAC although the stocks may not
outperform in the near term due to negative news flow.
• Avoid Axiata and StarHub as street estimates could be
revised down.
PT Telkom benefiting from “too rational” competitors.
Recent 3Q09 Indosat results indicate that cellular tariffs are not declining in Indonesia. Rather Indosat’s focus on raising tariffs led to 0.5% qoq decline in its subscriber base in 3Q09 on top of 13% qoq decline in 2Q09. PT Telkom should be a key
beneficiary of Indosat’s loss, as the other competitor Excelcomindo is also moving away from price-based competition. Excelcomindo is using “Fun & Excitement” rather
than “lower pricing” as its key branding strategy now. Weaker balance sheets of Excelcomindo and Indosat imply limited capex, forcing them to rationalize their tariff structure. Overall, we see upside rather than downside risk to PT
Telkom’s consensus FY09F/10F estimates. Currently, PT Telkom is trading at similar EV/EBITDA as Indosat despite higher growth prospects and better cash flow generation.
Thai telco stocks may not outperform in the near term but offer compelling upside over the medium term. While the regulator NTC has set Dec 09 as the time frame for 3G-licence auction, it could be postponed by another 2 months, in our view. In order to address the Ministry’s concerns, NTC may have to re-engage in public consultation and draft a new 3G plan. In the near term, performance of Thai stocks could remain subdue due to negative news flow about postponement of 3G award. DTAC should be a bigger beneficiary of 3G due to its higher regulatory fee and higher gearing than AIS. However, AIS is more appealing to investors, who want to ride on 3G award but have lower risk appetites.
Rising competition may lower next year street estimates for StarHub and Axiata. StarHub faces challenges in its pay TV and broadband businesses from SingTel and M1. Our FY10F earnings estimates for StarHub are 5% below the consensus.
DBS Perusahaan Gas Negara
Volume driven growth
• 3Q09 earnings better than expected
• Better than expected volume is key driver
• Revised up our FY09-10 earnings by 12-11%
• Upgrade to HOLD with TP of Rp3,335
3Q09 earnings above expectation.
Perusahaan Gas Negara (PGAS) reported its 3Q09 earnings of Rp1,154bn, down 43% q-o-q. Earnings decrease mostly caused by lower FX gain in 3Q09 compared to 2Q09 period. Stripping out the FX figure, core earnings increased modestly by 4% q-o-q.
Q-o-q volume grows modestly.
Total revenue is flat q-o-q while production cost is lower by 2% q-o-q, thus gross profit also edged up slightly by 2% q-o-q. Flat top line performance was due to relatively flat gas sales price and tariff coupled with only modest growth in volume.
Gas distribution rose 3% q-o-q while gas transmission volume remained flat.
Adjusting earnings estimate.
After incorporating higher gas distribution volume for FY09 and FY10 by 8% and 2% each respectively, we raise our FY09-10 earnings by 12% and 11% each respectively.
Upgrade to HOLD. Following the earnings revision coupled with shifting our valuation base year to 2010, we raised our target price to Rp3,335 and upgrade our recommendation to HOLD. Our target price was derived using DCF method with assumed WACC of 12% implying 16.1x FY10 PE. Going forward, we believe PGAS will face strong challenges in securing additional gas supply at a competitive price to secure margin.
• 3Q09 earnings better than expected
• Better than expected volume is key driver
• Revised up our FY09-10 earnings by 12-11%
• Upgrade to HOLD with TP of Rp3,335
3Q09 earnings above expectation.
Perusahaan Gas Negara (PGAS) reported its 3Q09 earnings of Rp1,154bn, down 43% q-o-q. Earnings decrease mostly caused by lower FX gain in 3Q09 compared to 2Q09 period. Stripping out the FX figure, core earnings increased modestly by 4% q-o-q.
Q-o-q volume grows modestly.
Total revenue is flat q-o-q while production cost is lower by 2% q-o-q, thus gross profit also edged up slightly by 2% q-o-q. Flat top line performance was due to relatively flat gas sales price and tariff coupled with only modest growth in volume.
Gas distribution rose 3% q-o-q while gas transmission volume remained flat.
Adjusting earnings estimate.
After incorporating higher gas distribution volume for FY09 and FY10 by 8% and 2% each respectively, we raise our FY09-10 earnings by 12% and 11% each respectively.
Upgrade to HOLD. Following the earnings revision coupled with shifting our valuation base year to 2010, we raised our target price to Rp3,335 and upgrade our recommendation to HOLD. Our target price was derived using DCF method with assumed WACC of 12% implying 16.1x FY10 PE. Going forward, we believe PGAS will face strong challenges in securing additional gas supply at a competitive price to secure margin.
CIMB United Tractors Company update - Still a darling
(UNTR IJ / UNTR.JK, OUTPERFORM - Maintained, Rp16,250 - Tgt. Rp20,500, Industrial Goods and Services)
We continue to like UNTR for potential consensus earnings upgrades, particularly from its heavy equipment division which we believe could surprise on the upside in FY10-11. Consensus expectations are not demanding, in our view, and current valuations are not rich, on par with the market. We raise our FY10-11 EPS estimates by 7-11% to factor in higher heavy equipment sales and Pama's outputs. We also raise our target price to Rp20,500 from Rp16,800, as we roll forward to end-CY10, still based on the market forward P/E of 15x. Recent concerns over a new ministerial decree on contract services are excessive, in our view, as we see only a 3-5% potential revenue loss from this decree. Even then, the impact would only be felt in 2013, if implemented.
We continue to like UNTR for potential consensus earnings upgrades, particularly from its heavy equipment division which we believe could surprise on the upside in FY10-11. Consensus expectations are not demanding, in our view, and current valuations are not rich, on par with the market. We raise our FY10-11 EPS estimates by 7-11% to factor in higher heavy equipment sales and Pama's outputs. We also raise our target price to Rp20,500 from Rp16,800, as we roll forward to end-CY10, still based on the market forward P/E of 15x. Recent concerns over a new ministerial decree on contract services are excessive, in our view, as we see only a 3-5% potential revenue loss from this decree. Even then, the impact would only be felt in 2013, if implemented.
Mandiri Sekuritas Bumi Serpong Damai: 9M09 net income up by 60%yoy, exceeds expectations (BSDE, Rp720, Buy, TP: Rp1,100)
Bumi Serpong reported 9M09 net income of Rp203bn, up by 60% yoy thanks to improving margins and slightly better 3Q. The rise in net income occurred despite a 10%yoy drop in revenues (due to higher house & lot developments this year compared to more land lot sales last year, which resulted to a longer realization period of revenues this
year) to Rp871bn. Likewise, non-operating expenses were reduced by 44%yoy as a result of lower interest charges. On qoq basis, net income improved by 3% and 8%, respectively. We shall keep our forecast intact at least on the top-line as we continue to see higher realization rates from its 2008 marketing sales of Rp1.65bn equating to a hefty Rp926bn in customer advances in the balance sheet as of 9M09 awaiting revenue booking. We maintain buy on the stock which currently trades at a
54% discount to our NAV10F.
year) to Rp871bn. Likewise, non-operating expenses were reduced by 44%yoy as a result of lower interest charges. On qoq basis, net income improved by 3% and 8%, respectively. We shall keep our forecast intact at least on the top-line as we continue to see higher realization rates from its 2008 marketing sales of Rp1.65bn equating to a hefty Rp926bn in customer advances in the balance sheet as of 9M09 awaiting revenue booking. We maintain buy on the stock which currently trades at a
54% discount to our NAV10F.
Mandiri Sekuritas Property Sector: 8M09 loans to property sector has exceeded FY08
Based on Bank Indonesia’s data, loans fore the property sector (including KPR) has amounted to Rp204tn as of Aug09, which has surpassed FY08 figures of Rp194tn. This came about as banks started to relax credit starting in 2-3Q09, which have bought down KPR rates to single digits (i.e. 9.5%pa fixed rate for 1-3 yrs, then floating).
Property companies whose buyers (low to mid up market) have significant reliance on mortgage loans include CTRA, SMRA, BSDE and ELTY. We see this development of sustained growth in KPR as a sufficient initiative for the above property developers to continue
project roll outs geared towards low to mid landed housing development, which should create a buffer on any slowdown from high-rise development projects.
Property companies whose buyers (low to mid up market) have significant reliance on mortgage loans include CTRA, SMRA, BSDE and ELTY. We see this development of sustained growth in KPR as a sufficient initiative for the above property developers to continue
project roll outs geared towards low to mid landed housing development, which should create a buffer on any slowdown from high-rise development projects.
CLSA INDO UPCOMING PLACMENT: DELTA DUNIA (DOID IJ)
- CLSA is the sole global co-ordinator and Joint bookrunner for a placement in Delta Dunia (DOID IJ)
- Indicative deal terms, to be confirmed on books open, are as follows:
- Deal Type: Placement of Existing Shares
- Deal Size: approx 1.6bn shares with an upsize option of up to 980 million shares, approx 24%-38% of existing share capital
- Pricing: Price guidance will be given when books open
- Selling restrictions: Reg S and 144A
- Timetable:
Roadshows: Singapore 27, 28 Oct, HK 29, 30 Oct, UK 2, 3 Nov, US 4,5 Nov
[3] Nov - Books Open
[5] Nov - Books close
[6] Nov - Indicative Allocations (subject to successful acquisition of
Buma by Delta)
[9] Nov - Trade Date (Following acquisition of Buma by Delta)
[12] Nov - Settlement Date
- (North Star is expected to acquire approx [40%] of the company through an additional old share placement)
- Indicative deal terms, to be confirmed on books open, are as follows:
- Deal Type: Placement of Existing Shares
- Deal Size: approx 1.6bn shares with an upsize option of up to 980 million shares, approx 24%-38% of existing share capital
- Pricing: Price guidance will be given when books open
- Selling restrictions: Reg S and 144A
- Timetable:
Roadshows: Singapore 27, 28 Oct, HK 29, 30 Oct, UK 2, 3 Nov, US 4,5 Nov
[3] Nov - Books Open
[5] Nov - Books close
[6] Nov - Indicative Allocations (subject to successful acquisition of
Buma by Delta)
[9] Nov - Trade Date (Following acquisition of Buma by Delta)
[12] Nov - Settlement Date
- (North Star is expected to acquire approx [40%] of the company through an additional old share placement)
Selasa, 27 Oktober 2009
Associated Press Oil up above $79 on weak dollar after 3-day slide
Oil back above $79 by midday in Europe as investors eye volatile US dollar
Oil prices were back above $79 a barrel Tuesday as the dollar fell against the euro and the Japanese yen, supporting oil after three straight days of declines.
By midday in Europe, benchmark crude for December delivery was up 54 cents to $79.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.82 to settle at $78.68 on Monday.
Crude jumped to a 12-month high at $82 a barrel last week as the dollar weakened amid concerns that massive global stimulus spending will eventually spark inflation. Since oil is priced in dollars, a drop in the U.S. currency makes oil prices rise.
The euro touched a 14-month high of $1.5061 on Monday before closing at $1.4861. On Tuesday, the euro strengthened to $1.4890 while the dollar fell to 91.92 Japanese yen from 92.21 yen.
"A weakening dollar could put significant pressure on dollar-denominated oil prices in the months ahead," Bank of America Merrill Lynch said in a report. "The combination of surging money supply, a rapidly weakening dollar and a cyclical improvement in oil demand could push oil prices above $100."
Some economists, such as Jorg Zeuner of Liechtenstein-based VP Bank, expect the dollar and oil to stabilize over the next three to six months as inflation fears ease. And burgeoning inventories will likely satisfy any boost in demand triggered by a recovering global economy.
"We expect producers to increase output if prices keep rising," Zeuner said. "We don't think producers would risk killing the recovery by letting prices go to $100."
JBC Energy in Vienna also said it expected the "downward movement in prices" to continue toward the $70-per-barrel level.
In other Nymex trading, heating oil rose 1.60 cents to $2.0495 a gallon. Gasoline for November delivery advanced 2.85 cents to $2.0623 a gallon, while natural gas for November delivery slid 0.3 cent to $4.51 per 1,000 cubic feet.
In London, Brent crude for December delivery rose 50 cents to $77.76 on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.
Oil prices were back above $79 a barrel Tuesday as the dollar fell against the euro and the Japanese yen, supporting oil after three straight days of declines.
By midday in Europe, benchmark crude for December delivery was up 54 cents to $79.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.82 to settle at $78.68 on Monday.
Crude jumped to a 12-month high at $82 a barrel last week as the dollar weakened amid concerns that massive global stimulus spending will eventually spark inflation. Since oil is priced in dollars, a drop in the U.S. currency makes oil prices rise.
The euro touched a 14-month high of $1.5061 on Monday before closing at $1.4861. On Tuesday, the euro strengthened to $1.4890 while the dollar fell to 91.92 Japanese yen from 92.21 yen.
"A weakening dollar could put significant pressure on dollar-denominated oil prices in the months ahead," Bank of America Merrill Lynch said in a report. "The combination of surging money supply, a rapidly weakening dollar and a cyclical improvement in oil demand could push oil prices above $100."
Some economists, such as Jorg Zeuner of Liechtenstein-based VP Bank, expect the dollar and oil to stabilize over the next three to six months as inflation fears ease. And burgeoning inventories will likely satisfy any boost in demand triggered by a recovering global economy.
"We expect producers to increase output if prices keep rising," Zeuner said. "We don't think producers would risk killing the recovery by letting prices go to $100."
JBC Energy in Vienna also said it expected the "downward movement in prices" to continue toward the $70-per-barrel level.
In other Nymex trading, heating oil rose 1.60 cents to $2.0495 a gallon. Gasoline for November delivery advanced 2.85 cents to $2.0623 a gallon, while natural gas for November delivery slid 0.3 cent to $4.51 per 1,000 cubic feet.
In London, Brent crude for December delivery rose 50 cents to $77.76 on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore contributed to this report.
Kuartal 3-2009 Laba Bersih TOTL Naik 68,16%
PT Total Bangun Persada Tbk (TOTL) berhasil meraup laba bersih Rp38,71 miliar per September 2009 atau naik 68,16% dibanding periode serupa 2008 Rp23,02 miliar.
Berdasarkan laporan keuangan Perseroan yang disampaikan ke BEI, Selasa (27/10) dijelaskan kenaikan ini disebabkan adanya kenaikan laba usaha sebesar 75,79% menjadi Rp75,98 miliar per september 2009 dari periode yang sama 2008 Rp43,22 miliar.
Sementara nilai aktiva Perseroan per September 2009 tercatat sebesar Rp1,38 triliun atau naik dari sebelumnya Rp1,34 triliun. Total kewajiban Perseroan per September 2009 mencapai Rp902,17 miliar, sedang ekuitas mencapai Rp478,46 miliar.
Berdasarkan laporan keuangan Perseroan yang disampaikan ke BEI, Selasa (27/10) dijelaskan kenaikan ini disebabkan adanya kenaikan laba usaha sebesar 75,79% menjadi Rp75,98 miliar per september 2009 dari periode yang sama 2008 Rp43,22 miliar.
Sementara nilai aktiva Perseroan per September 2009 tercatat sebesar Rp1,38 triliun atau naik dari sebelumnya Rp1,34 triliun. Total kewajiban Perseroan per September 2009 mencapai Rp902,17 miliar, sedang ekuitas mencapai Rp478,46 miliar.
Bloomberg Global Rubber Supply May Climb 30 Percent by 2015
Oct. 27 (Bloomberg) -- Global rubber supply may jump 30 percent by 2015 compared with last year after more than one million hectares were planted between 2005 and 2008, the International Rubber Study Group said.
Supply may increase by 50 percent by 2020 because of the “dramatic increase in total new planting,” it said in a report today. “In 2008 total new planting is estimated to have reached around six times the level of 2000.”
The report covers 11 Asian countries that accounted for 92 percent of world natural rubber production in 2008.
Rubber, used in tires and gloves, reached a one-year high last week as rising crude oil increased the cost of making rival synthetic product from petroleum, and as Thailand, Indonesia and Malaysia, the top producers, cut exports to combat a collapse in prices last year. Rubber had rallied to a 28-year peak in June 2008, spurring farmers to increase planting.
Plantings increased in Vietnam and Thailand, and those trees are maturing, the group’s secretary general Hidde Smit said in an interview this month.
Rubber trees take about six years from planting to the first tapping and produce for about two decades after that.
Output Forecast
Asian production may climb 29 percent to 10.63 million tons by 2015, and global output may be 11.53 million tons, the report said. Production may total 9.3 million tons next year, compared with a revised 8.94 million tons in 2008. The report didn’t give a forecast for this year.
The eleven countries are: Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka, Cambodia, the Philippines, Myanmar and Laos.
Supply may increase by 50 percent by 2020 because of the “dramatic increase in total new planting,” it said in a report today. “In 2008 total new planting is estimated to have reached around six times the level of 2000.”
The report covers 11 Asian countries that accounted for 92 percent of world natural rubber production in 2008.
Rubber, used in tires and gloves, reached a one-year high last week as rising crude oil increased the cost of making rival synthetic product from petroleum, and as Thailand, Indonesia and Malaysia, the top producers, cut exports to combat a collapse in prices last year. Rubber had rallied to a 28-year peak in June 2008, spurring farmers to increase planting.
Plantings increased in Vietnam and Thailand, and those trees are maturing, the group’s secretary general Hidde Smit said in an interview this month.
Rubber trees take about six years from planting to the first tapping and produce for about two decades after that.
Output Forecast
Asian production may climb 29 percent to 10.63 million tons by 2015, and global output may be 11.53 million tons, the report said. Production may total 9.3 million tons next year, compared with a revised 8.94 million tons in 2008. The report didn’t give a forecast for this year.
The eleven countries are: Thailand, Indonesia, Malaysia, India, Vietnam, China, Sri Lanka, Cambodia, the Philippines, Myanmar and Laos.
Bloomberg Rubber Decreases for Second Day as Oil’s Retreat Reduces Demand
Oct. 27 (Bloomberg) -- Rubber declined for a second day after crude oil slumped the most in a month, reducing investor interest in the commodity as an alternative to synthetic products made from petroleum for use in tires.
Futures in Tokyo fell as much as 1.3 percent to 227.7 yen ($2,475 a metric ton), retreating further from a one-year high of 235.7 yen reached Oct. 23. Oil slipped yesterday as U.S. equities slumped on concern the government will phase out a tax credit for homebuyers, and as OPEC may raise production targets when it meets in December after the International Energy Agency warned that rising prices threaten the global economic recovery.
“Rubber was sold in tandem with oil and other commodities as a slump in global stocks reduced the risk appetite of investors,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd., said today by telephone. Prices could fall to as low as 210 yen if oil breaks below $75 a barrel, he added.
March-delivery rubber declined 0.1 percent to settle at 230.5 yen a kilogram on the Tokyo Commodity Exchange. April- delivery rubber, listed on the exchange today, settled at 230.8 yen after opening at 228.8 yen.
Futures often move in the same direction as crude oil as competing synthetic rubber is made from naphtha, distilled from petroleum. December-delivery oil dropped 2.3 percent to close at $78.68 a barrel in New York yesterday, the biggest decline since Sept. 24 and the lowest settlement since Oct. 16. It traded up 0.2 percent at $78.86 as of 4:25 p.m. Tokyo time.
“Rubber futures trimmed earlier losses as a slide in oil came to a halt in Asian trading today,” Takaki Shigemoto, a commodity analyst at research and investment company JSC Corp. in Tokyo, said today by phone. more...
Futures in Tokyo fell as much as 1.3 percent to 227.7 yen ($2,475 a metric ton), retreating further from a one-year high of 235.7 yen reached Oct. 23. Oil slipped yesterday as U.S. equities slumped on concern the government will phase out a tax credit for homebuyers, and as OPEC may raise production targets when it meets in December after the International Energy Agency warned that rising prices threaten the global economic recovery.
“Rubber was sold in tandem with oil and other commodities as a slump in global stocks reduced the risk appetite of investors,” Shuji Sugata, research manager at Mitsubishi Corp. Futures Ltd., said today by telephone. Prices could fall to as low as 210 yen if oil breaks below $75 a barrel, he added.
March-delivery rubber declined 0.1 percent to settle at 230.5 yen a kilogram on the Tokyo Commodity Exchange. April- delivery rubber, listed on the exchange today, settled at 230.8 yen after opening at 228.8 yen.
Futures often move in the same direction as crude oil as competing synthetic rubber is made from naphtha, distilled from petroleum. December-delivery oil dropped 2.3 percent to close at $78.68 a barrel in New York yesterday, the biggest decline since Sept. 24 and the lowest settlement since Oct. 16. It traded up 0.2 percent at $78.86 as of 4:25 p.m. Tokyo time.
“Rubber futures trimmed earlier losses as a slide in oil came to a halt in Asian trading today,” Takaki Shigemoto, a commodity analyst at research and investment company JSC Corp. in Tokyo, said today by phone. more...
Bloomberg Oil Little Changed Around $78 on Forecast U.S. Supplies Grew
Oct. 27 (Bloomberg) -- Crude oil was little changed around $78 a barrel in New York before a report forecast to show that U.S. crude inventories expanded for a third week. An Energy Department report due tomorrow will probably show that U.S. stockpiles of crude oil rose 1.5 million barrels last week, according to a Bloomberg News survey. Analysts forecast that supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, declined last week.
“It’s overvalued and it may be time for a correction,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. “The fundamental picture is bearish. Demand outside China is still weak and global stockpiles are ample.”
Crude oil for December delivery was at $78.55 a barrel, down 13 cents, at 8:49 a.m. London time. Yesterday, it dropped 2.3 percent to close at $78.68 a barrel on the New York Mercantile Exchange, the biggest decline since Sept. 24 and the lowest settlement since Oct. 16.
Prices have gained 76 percent this year and reached a one- year high of $82 a barrel on Oct. 21.
“The upper limit is at $82 at the moment,” said Ken Hasegawa, a commodity derivatives sales manager at brokers Newedge in Tokyo. “Unless there is a collapse in the economy, this market would be supported at around $75 a barrel.” more...
Bloomberg China Sees Faster Production Gains in Fourth Quarter
Oct. 27 (Bloomberg) -- China predicted an acceleration in industrial production and reported a 190 percent jump in overseas investment for the third quarter, underscoring the nation’s role in driving a global economic recovery.
Investment by Chinese firms abroad rose to $20.5 billion in July through September, almost triple a year earlier, the Ministry of Commerce said in a statement. Industrial output may rise 16 percent in the fourth quarter, Ministry of Industry and Information Technology official Zhu Hongren said in a briefing, compared with a 13.9 percent pace of gains in September.
Policy makers may be encouraging Chinese companies to invest abroad in part to help counter pressure for the nation’s currency to appreciate, analysts said. Investors are betting on the yuan to gain in the coming year as China’s growth accelerates from its weakest pace in a year.
“China’s growth is certain and stable,” said Zhu Jianfang, an economist at Citic Securities Co. in Beijing. “Chinese policy makers see pressure for yuan to appreciate, so they encourage companies to invest abroad to strike the balance.”
Today’s figures came after the government last week reported that China, the world’s third-biggest economy, expanded 8.9 percent in the third quarter, the fastest pace in a year.
The economy is showing more signs of stabilizing, the National Development and Reform Commission said in a statement on its Web site today, adding that the government’s stimulus measures have been effective. more...
Investment by Chinese firms abroad rose to $20.5 billion in July through September, almost triple a year earlier, the Ministry of Commerce said in a statement. Industrial output may rise 16 percent in the fourth quarter, Ministry of Industry and Information Technology official Zhu Hongren said in a briefing, compared with a 13.9 percent pace of gains in September.
Policy makers may be encouraging Chinese companies to invest abroad in part to help counter pressure for the nation’s currency to appreciate, analysts said. Investors are betting on the yuan to gain in the coming year as China’s growth accelerates from its weakest pace in a year.
“China’s growth is certain and stable,” said Zhu Jianfang, an economist at Citic Securities Co. in Beijing. “Chinese policy makers see pressure for yuan to appreciate, so they encourage companies to invest abroad to strike the balance.”
Today’s figures came after the government last week reported that China, the world’s third-biggest economy, expanded 8.9 percent in the third quarter, the fastest pace in a year.
The economy is showing more signs of stabilizing, the National Development and Reform Commission said in a statement on its Web site today, adding that the government’s stimulus measures have been effective. more...
Indopremier ITMG : Waiting For 3Q09 RESULTS
ITMG – BUY ( TP – RP26.600)
Having been risen by 101% YTD, ITMG share price has been moving flat in the last two (2) months, underperforming the JCI both in terms of absolute and relative term. We relate the stagnant of ITMG share prices to the less buoyant 2Q09 results compared to the previous 1Q09. At current point (Graph 1), we view the share price is at a cross road, deciding to move up higher or lower, waiting for the outcome of 3Q09 performances which will be announced on November 10 2009. We like ITMG for its strong balance sheet, high dividend, and its decent financial performances since its IPO in late 2007. In addition, ITMG expansion plan is intact, while acquisition is also in the scheme. Post 1H09 results, we fine-tuned our estimates, and our latest DCF calculation with WACC of 15.1% and LTG 5%, we get slightly higher target price of Rp26,600 still providing investors potential upside of 12%. We maintain our BUY
recommendation.
Lower 2Q09 Results
Compared to 1Q09, ITMG reported lower 2Q09 results with sales at US$329mn (5%, QoQ), operating profit at US$100(-13%, QoQ), and net profit at US$57mn (-44%, QoQ). On the operation level, 2Q09 decline was mainly due to the lower ASP in 2Q09 of US$73.5.ton vs. US$85/ton in 1Q09 (-14$, QoQ). Sales volume was steady at 4.43mn ton (8%, QoQ), and so is production at 4.86mn ton (11%, QoQ). Meanwhile, costs was slightly softening in the 2Q09 mainly due to lower fuel costs. However, below the operation level, ITMG incurred a loss on its hedging transaction at the amount of US$12.9mn, bringing a 44% total decrease in net profit to US$57mn.
Earnings Forecasts
We opt to wait until the announcement of 3Q09 results before revising our current unchanged production volume of 19mn ton, estimated to earn an ASP of US$72/ton. Meanwhile, we see that 2H09 can maintain ASP at the US$70’s/ton level, given the current steady situation of world coal price. With lower total production cost of US$48.62/ton (-12%, YoY), our estimates produces net profit of US$295mn this year, reflecting a decent growth of 26% vs. last year’s earnings.
Having been risen by 101% YTD, ITMG share price has been moving flat in the last two (2) months, underperforming the JCI both in terms of absolute and relative term. We relate the stagnant of ITMG share prices to the less buoyant 2Q09 results compared to the previous 1Q09. At current point (Graph 1), we view the share price is at a cross road, deciding to move up higher or lower, waiting for the outcome of 3Q09 performances which will be announced on November 10 2009. We like ITMG for its strong balance sheet, high dividend, and its decent financial performances since its IPO in late 2007. In addition, ITMG expansion plan is intact, while acquisition is also in the scheme. Post 1H09 results, we fine-tuned our estimates, and our latest DCF calculation with WACC of 15.1% and LTG 5%, we get slightly higher target price of Rp26,600 still providing investors potential upside of 12%. We maintain our BUY
recommendation.
Lower 2Q09 Results
Compared to 1Q09, ITMG reported lower 2Q09 results with sales at US$329mn (5%, QoQ), operating profit at US$100(-13%, QoQ), and net profit at US$57mn (-44%, QoQ). On the operation level, 2Q09 decline was mainly due to the lower ASP in 2Q09 of US$73.5.ton vs. US$85/ton in 1Q09 (-14$, QoQ). Sales volume was steady at 4.43mn ton (8%, QoQ), and so is production at 4.86mn ton (11%, QoQ). Meanwhile, costs was slightly softening in the 2Q09 mainly due to lower fuel costs. However, below the operation level, ITMG incurred a loss on its hedging transaction at the amount of US$12.9mn, bringing a 44% total decrease in net profit to US$57mn.
Earnings Forecasts
We opt to wait until the announcement of 3Q09 results before revising our current unchanged production volume of 19mn ton, estimated to earn an ASP of US$72/ton. Meanwhile, we see that 2H09 can maintain ASP at the US$70’s/ton level, given the current steady situation of world coal price. With lower total production cost of US$48.62/ton (-12%, YoY), our estimates produces net profit of US$295mn this year, reflecting a decent growth of 26% vs. last year’s earnings.
Mandiri Sekuritas EXCL: Right issue
Sector:Telecommunication
Right issue
EXCL is planning to go for a right issue for 1,418mn new shares and issue ratio is 1 share for every 5 held. The right price is Rp2,000/share implying a hefty premium to current price. As we hold the view that right issue will not be subscribed by public and therefore free-float would decrease further from 0.2% to 0.17%, we give about 25% discount of to our DCF derived price of Rp2,200/share and arrive at TP of Rp1,650/share. As the downside is 8.! 3% we giv e a Neutral call for the stock.
To right issue 1,418mn new shares. EXCL plans to do right issue which is expected to be completed in Dec09. The approval of the shareholders in relation to the rights issue is expected to be held on 16 Nov09. Right issue will be of 1,418mn share. The right issue ratio is 1 share for every 5 held. The right price is Rp2,000/share translating into total proceeds of Rp2,836bn. The right price is 53.8% premium to the price before the announcement of the planned right issue.
Increase free float if subscribed by public. Currently EXCL is 83.8% owned by Axiata (Formerly known as TM International Berhad),16% owned by Etisalat International and 0.2% by public. Axiata has entered into a standby buyer agreement in which Axiata will also subscribe to the unsubscribed right shares. Currently EXCL’s outstanding shares are 7,090mn shares, and with the right issue the number would go up to 8,508mn shares. If the shares are 100% su! bscribed by public it would increase the free float from 0.2% to 16.8%.
To strengthen balance sheet. The right issue proceeds will strengthen capital base and put some ease on the funding requirement for capex in the short term. However, the long term fund requirement still remains challenging. The capex requirement for EXCL in FY09 is Rp6.7tn. EXCL generates Rp3.1tn in operating cash flow in 1H09, this together with the right issue proceeds is not enough to cover the capex requirement. However with the right issue the D/E ratio would reduce from 355% to 233%.
Maintain Neutral. Earlier we arrived at DCF price of Rp2,100/share to which we had given a discount of about 38% because of low free-float and arrived at TP of Rp1,300/share. Now we have rolled over to FY10, revisited our forecasts and arrived at DCF value of Rp2,200/share (WACC: 10.1%, TG: 3%). Despite higher DCF price we take the view that right shares will not be subscribed by the public, as Rp2,000/share implies a PER10F of 28.1x, while the growth for the company and the industry is marginal. Therefore the right issue will reduce the free float from 0.2% to 0.17%. With this, we give a discount of about 25% to factor in the low free float and therefore arrive at TP of Rp1,650/share, implying PER10F of 23.2x.
Right issue
EXCL is planning to go for a right issue for 1,418mn new shares and issue ratio is 1 share for every 5 held. The right price is Rp2,000/share implying a hefty premium to current price. As we hold the view that right issue will not be subscribed by public and therefore free-float would decrease further from 0.2% to 0.17%, we give about 25% discount of to our DCF derived price of Rp2,200/share and arrive at TP of Rp1,650/share. As the downside is 8.! 3% we giv e a Neutral call for the stock.
To right issue 1,418mn new shares. EXCL plans to do right issue which is expected to be completed in Dec09. The approval of the shareholders in relation to the rights issue is expected to be held on 16 Nov09. Right issue will be of 1,418mn share. The right issue ratio is 1 share for every 5 held. The right price is Rp2,000/share translating into total proceeds of Rp2,836bn. The right price is 53.8% premium to the price before the announcement of the planned right issue.
Increase free float if subscribed by public. Currently EXCL is 83.8% owned by Axiata (Formerly known as TM International Berhad),16% owned by Etisalat International and 0.2% by public. Axiata has entered into a standby buyer agreement in which Axiata will also subscribe to the unsubscribed right shares. Currently EXCL’s outstanding shares are 7,090mn shares, and with the right issue the number would go up to 8,508mn shares. If the shares are 100% su! bscribed by public it would increase the free float from 0.2% to 16.8%.
To strengthen balance sheet. The right issue proceeds will strengthen capital base and put some ease on the funding requirement for capex in the short term. However, the long term fund requirement still remains challenging. The capex requirement for EXCL in FY09 is Rp6.7tn. EXCL generates Rp3.1tn in operating cash flow in 1H09, this together with the right issue proceeds is not enough to cover the capex requirement. However with the right issue the D/E ratio would reduce from 355% to 233%.
Maintain Neutral. Earlier we arrived at DCF price of Rp2,100/share to which we had given a discount of about 38% because of low free-float and arrived at TP of Rp1,300/share. Now we have rolled over to FY10, revisited our forecasts and arrived at DCF value of Rp2,200/share (WACC: 10.1%, TG: 3%). Despite higher DCF price we take the view that right shares will not be subscribed by the public, as Rp2,000/share implies a PER10F of 28.1x, while the growth for the company and the industry is marginal. Therefore the right issue will reduce the free float from 0.2% to 0.17%. With this, we give a discount of about 25% to factor in the low free float and therefore arrive at TP of Rp1,650/share, implying PER10F of 23.2x.
CIMB Company Update – United Tractors – Still a darling
We continue to like UNTR for potential consensus earnings upgrades, particularly from its heavy equipment division which we believe could surprise on the upside in FY10-11. Consensus expectations are not demanding, in our view, and current valuations are not rich, on par with the market. We raise our FY10-11 EPS estimates by 7-11% to factor in higher heavy equipment sales and Pama’s outputs. We also raise our target price to Rp20,500 from Rp16,800, as we roll forward to end-CY10, still based on the market forward P/E of 15x. Recent concerns over a new ministerial decree on contract services are excessive, in our view, as we see only a 3-5% potential revenue loss from this decree. Even then, the impact would only be felt in 2013, if implemented.
Credit Suisse - 9M09 net profit better than expected due to foreign exchange gain
● Perusahaan Gas Negara (PGAS) reported net profit of Rp4.4 tn in 9M09, up 145% YoY. This is better than market expectation due to a foreign exchange gain on the appreciation of the rupiah.
● Sales revenue rose 50% YoY to Rp13.5 tn in 9M09. Operating profit was Rp5.9 tn in 9M09, up 68% YoY. This is in line with our expectation. The company recorded Rp911 bn of forex gain and a Rp355 bn loss on change in the fair value of derivatives in 9M09. Excluding these non operating gains and losses, we estimate core net income of Rp3.6 tn, up 77% YoY.
● Transmission volume was 763mmcfd (million cubic feet per day) in 9M09, up 2% YoY. Distribution volume rose 37% YoY to 776mmcfd, higher than our expectation. This means that in 3Q09, distribution volume was 815mmcfd, up 3% QoQ.
● We believe PGAS will continue to show distribution volume growth and have strong operating cash flow. We retain our OUTPERFORM rating on PGAS.
● Sales revenue rose 50% YoY to Rp13.5 tn in 9M09. Operating profit was Rp5.9 tn in 9M09, up 68% YoY. This is in line with our expectation. The company recorded Rp911 bn of forex gain and a Rp355 bn loss on change in the fair value of derivatives in 9M09. Excluding these non operating gains and losses, we estimate core net income of Rp3.6 tn, up 77% YoY.
● Transmission volume was 763mmcfd (million cubic feet per day) in 9M09, up 2% YoY. Distribution volume rose 37% YoY to 776mmcfd, higher than our expectation. This means that in 3Q09, distribution volume was 815mmcfd, up 3% QoQ.
● We believe PGAS will continue to show distribution volume growth and have strong operating cash flow. We retain our OUTPERFORM rating on PGAS.
DBS Perusahaan Gas Negara (Rp3,700; Rec and TP under review; PGAS IJ)
3Q09 earnings above estimate
Perusahaan Gas Negara (PGAS) reported its 3Q09 earnings of Rp1,154bn, down 43% q-o-q and came in above our estimate. Earnings decrease mostly caused by lower FX gain in 3Q09 compared to 2Q09 period. Stripping out the FX figure, core earnings increased modestly by 4% q-o-q.
Total revenue is flat q-o-q while production cost is lower by 2% q-o-q, thus gross profit also edged up slightly by 2% q-o-q. Flat top line performance was due to relatively flat gas sales price and tariff coupled with only modest growth in volume. Gas distribution rose 3% q-o-q while gas transmission volume remained flat.
PGAS net gearing in 3Q09 remained firm at 0.70x while its cash balance stood at Rp5,889bn with an operating cash flow of Rp5,385bn.
We are currently reviewing our forecasts to incorporate better than expected results, notably on the gas distribution volume which was higher than our estimate and put our target price and recommendation under review.
Perusahaan Gas Negara (PGAS) reported its 3Q09 earnings of Rp1,154bn, down 43% q-o-q and came in above our estimate. Earnings decrease mostly caused by lower FX gain in 3Q09 compared to 2Q09 period. Stripping out the FX figure, core earnings increased modestly by 4% q-o-q.
Total revenue is flat q-o-q while production cost is lower by 2% q-o-q, thus gross profit also edged up slightly by 2% q-o-q. Flat top line performance was due to relatively flat gas sales price and tariff coupled with only modest growth in volume. Gas distribution rose 3% q-o-q while gas transmission volume remained flat.
PGAS net gearing in 3Q09 remained firm at 0.70x while its cash balance stood at Rp5,889bn with an operating cash flow of Rp5,385bn.
We are currently reviewing our forecasts to incorporate better than expected results, notably on the gas distribution volume which was higher than our estimate and put our target price and recommendation under review.
DBS Telkom (Rp8,500; Buy; TP Rp10,500; TLKM IJ)
USD2.1b capex
The Bloomberg reported that TLKM is seeking to raise USD735m in financing to fund its USD2.1b capex for FY10F. This represents 35% of TLKM’s planned capex. A similar USD2.1b is also budgeted for FY09F capex.
Our forecasts currently imputed slightly higher capex of USD2.4b and USD2.2b for FY09F and FY10F respectively, which we think are conservative. Lowering these to TLKM’s latest guidance of USD2.1b could raise FY09F core net profit by 2% and FY10F by 6%. Consequently, this could lift our DCF-based price target by 4%.
Pending the announcement of TLKM’s 3Q09 results and analyst briefing, we are keeping our forecasts and DCF-based price target of Rp10,500. We continue to like TLKM for: (i) the growth potential a rebounding Indonesian economy would offer the telecommunications industry; (ii) TLKM’s potential to gain market share after competitor Indosat (ISAT IJ) raised effective call tariff; and (iii) TLKM’s strong balance sheet that enables the group to be competitive or to defend its market share. Also, the stronger IDR vs. the USD helps to lower the cost of capex for telcos. We retain our BUY call on TLKM.
The Bloomberg reported that TLKM is seeking to raise USD735m in financing to fund its USD2.1b capex for FY10F. This represents 35% of TLKM’s planned capex. A similar USD2.1b is also budgeted for FY09F capex.
Our forecasts currently imputed slightly higher capex of USD2.4b and USD2.2b for FY09F and FY10F respectively, which we think are conservative. Lowering these to TLKM’s latest guidance of USD2.1b could raise FY09F core net profit by 2% and FY10F by 6%. Consequently, this could lift our DCF-based price target by 4%.
Pending the announcement of TLKM’s 3Q09 results and analyst briefing, we are keeping our forecasts and DCF-based price target of Rp10,500. We continue to like TLKM for: (i) the growth potential a rebounding Indonesian economy would offer the telecommunications industry; (ii) TLKM’s potential to gain market share after competitor Indosat (ISAT IJ) raised effective call tariff; and (iii) TLKM’s strong balance sheet that enables the group to be competitive or to defend its market share. Also, the stronger IDR vs. the USD helps to lower the cost of capex for telcos. We retain our BUY call on TLKM.
Mandiri Sekuritas Oct09 CPI Inflation: Back to normal
The Statistical Agency will announce Oct09 inflation figure on Monday (11/2), which we expect to come lower than the previous month’s. Inflation may ease to 0.35% mom (2.73% yoy) in Oct09, as seasonal impacts of Ied festive season have diminished.
Food prices would remain the main contributors of inflation, albeit smaller. Core inflation may stay flat around 4.8% yoy, as the second-round effect on the 12kg LPG price increase likely to be limited and the rupiah’s appreciation would help bring inflation down.
Relatively stable food prices, further appreciation in the rupiah, and flat administered prices, particularly as Pertamina scrapped its plan to gradually increase LPG price for the rest of the year, would keep Inflation low. We expect inflation to end slightly below 4% yoy this year, before picking up to 6.3% in 2010.
Accordingly, we think Bank Indonesia will increase the benchmark rate next year, in order to restrain inflation expectation. BI rate may increase by 75bps to 7.25% next year from 6.5% currently, on the back of rising domestic demand and possible increase in administered prices.
Both exports and imports may continue to improve as we expected them to record smaller annual contraction of 13.5% yoy and 20.5% yoy in Sep09, which would bring trade balance to US$1.6bn.
Food prices would remain the main contributors of inflation, albeit smaller. Core inflation may stay flat around 4.8% yoy, as the second-round effect on the 12kg LPG price increase likely to be limited and the rupiah’s appreciation would help bring inflation down.
Relatively stable food prices, further appreciation in the rupiah, and flat administered prices, particularly as Pertamina scrapped its plan to gradually increase LPG price for the rest of the year, would keep Inflation low. We expect inflation to end slightly below 4% yoy this year, before picking up to 6.3% in 2010.
Accordingly, we think Bank Indonesia will increase the benchmark rate next year, in order to restrain inflation expectation. BI rate may increase by 75bps to 7.25% next year from 6.5% currently, on the back of rising domestic demand and possible increase in administered prices.
Both exports and imports may continue to improve as we expected them to record smaller annual contraction of 13.5% yoy and 20.5% yoy in Sep09, which would bring trade balance to US$1.6bn.
CLSA PGas reports 9M09 results - in line with our expectations
It reported revenue of Rp13.5tn up 50% yoy. Net profits increased 145% yoy from Rp1.79tn to Rp4.4tn.
The company’s distribution volumes were 776mmscfd up 37% yoy. Operating profits make up 80% of our full year forecasts. Net profits make up 80% our full year forecasts. Stronger currency in 4Q09 will mean lower operational profits in 4Q09 but we are comfortable with our numbers as we had been slightly conservative with our distribution volumes at 777mmscfd for full year 2009. The company’s 3Q09 distribution volumes reached 816mmscfd.
The company’ reported forex gain of Rp911bn. However it recorded a loss on cross currency swap of Rp354bn.
Sharp increased in profits (145%) doubled return on assets from 8.2% in 9m08 to 16% 9m09. ROE improved from 24% from 9m08 to 44% in 9M09.
As the distribution volumes increased by 37%, fixed costs per unit reduced leading to increase in operating margin from 39% in 9M08 to 44% in 9M09. We have forecasted lower selling and distribution expenses as a percentage of sales going forward as distribution volumes increases.
The company’s cash flow from operations of Rp5.38tn is enough to finance the entire capex for West Java LNG receiving terminal. Higher dividend payout is a possibility going forward. We have forecasted 50% dividend payout.
Reiterate outperform. With Price Target Rp4000/share.
The company’s distribution volumes were 776mmscfd up 37% yoy. Operating profits make up 80% of our full year forecasts. Net profits make up 80% our full year forecasts. Stronger currency in 4Q09 will mean lower operational profits in 4Q09 but we are comfortable with our numbers as we had been slightly conservative with our distribution volumes at 777mmscfd for full year 2009. The company’s 3Q09 distribution volumes reached 816mmscfd.
The company’ reported forex gain of Rp911bn. However it recorded a loss on cross currency swap of Rp354bn.
Sharp increased in profits (145%) doubled return on assets from 8.2% in 9m08 to 16% 9m09. ROE improved from 24% from 9m08 to 44% in 9M09.
As the distribution volumes increased by 37%, fixed costs per unit reduced leading to increase in operating margin from 39% in 9M08 to 44% in 9M09. We have forecasted lower selling and distribution expenses as a percentage of sales going forward as distribution volumes increases.
The company’s cash flow from operations of Rp5.38tn is enough to finance the entire capex for West Java LNG receiving terminal. Higher dividend payout is a possibility going forward. We have forecasted 50% dividend payout.
Reiterate outperform. With Price Target Rp4000/share.
UBS Investment Research Perusahaan Gas Negara Tbk - 9m09 results is a mixed bag
PGAS just published its 9m09 results
PGAS’ 9m09 revenue is 67% of UBS full year estimate (slightly weaker) but 75% of consensus (slightly above). PGAS’ 9m09 EBITDA is 68% of UBS full year estimate slightly weaker) but 77% of consensus (slightly above). Core profit is inline with UBS estimate and slightly above consensus.
No receivables problem surfacing
Our analysis of PGAS 9m09 shows no sign of troubles with its receivables. PGAS posted 29 days of receivables in 9m09, lower than 32 days of receivables in 6m09 and also lower than 56 days of receivables in 9m08. This should alleviate concerns of PLN (Perusahaan Listrik Negara) delaying payments to PGAS.
Will review forecasts after conference call
PGAS management will hold its customer post-result conference call on October 27th at 5pm Singapore/HK time. We will review our forecasts after conference call. We believe the main focus during the conference call is likely to be on potential distribution or transmission gas price increase in 2010, future gas supply signing, potential projects, further clarification of account receivables with PLN, and management guidance for 2010 volumes.
Valuation: DCF-based price target of Rp4,300 (16% upside)
Our price target is based on a WACC assumption of 13% and a long-term growth of 5.0%.
PGAS’ 9m09 revenue is 67% of UBS full year estimate (slightly weaker) but 75% of consensus (slightly above). PGAS’ 9m09 EBITDA is 68% of UBS full year estimate slightly weaker) but 77% of consensus (slightly above). Core profit is inline with UBS estimate and slightly above consensus.
No receivables problem surfacing
Our analysis of PGAS 9m09 shows no sign of troubles with its receivables. PGAS posted 29 days of receivables in 9m09, lower than 32 days of receivables in 6m09 and also lower than 56 days of receivables in 9m08. This should alleviate concerns of PLN (Perusahaan Listrik Negara) delaying payments to PGAS.
Will review forecasts after conference call
PGAS management will hold its customer post-result conference call on October 27th at 5pm Singapore/HK time. We will review our forecasts after conference call. We believe the main focus during the conference call is likely to be on potential distribution or transmission gas price increase in 2010, future gas supply signing, potential projects, further clarification of account receivables with PLN, and management guidance for 2010 volumes.
Valuation: DCF-based price target of Rp4,300 (16% upside)
Our price target is based on a WACC assumption of 13% and a long-term growth of 5.0%.
Bloomberg Crude Oil Declines the Most in a Month as the Dollar Rebounds
Oct. 26 (Bloomberg) -- Crude oil fell the most in a month as the dollar advanced from a 14-month low against the euro, reducing the appeal of commodities. Energy and metal futures dropped after the U.S. currency rebounded. Oil also fell as the Standard & Poor’s 500 Index slumped on concern the government will phase out a tax credit for homebuyers and Bank of America Corp. will have to sell shares to pay back its government bailout.
“This is a dollar play,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “If you get a sustained rally in the dollar, oil is going to fall below $60.”
Crude oil for December delivery fell $1.82, or 2.3 percent, to end the session at $78.68 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the biggest drop since Sept. 24. It was the lowest settlement since Oct. 16. Prices have gained 76 percent this year and reached a one-year high of $82 a barrel on Oct. 21.
“Because of a dearth in economic data today, the fluctuations of the currency market are the main determinate of the oil market,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant.
The dollar climbed 1 percent to $1.4855 per euro from $1.5008 on Oct. 23. It traded as low as $1.5063 earlier today, the weakest level since August 2008.
The S&P 500 Index dropped 1.1 percent to 1,068.27 and the Dow Jones Industrial Average fell 1 percent to 9,871.29.
OPEC Production
The Organization of Petroleum Exporting Countries will meet Dec. 22 in Luanda, Angola, to review its production quotas. Some member countries are able to pump more oil if the market requires it, OPEC President and Angolan Oil Minister Jose Maria Botelho de Vasconcelos said in an interview late yesterday. more...
Associated Press Stocks slide as rising dollar hits oil prices
Stocks give up early gains as rising dollar hurts commodity prices; Dow falls 104 pointsNEW YORK (AP) -- A strengthening dollar and worries about an overheated market pounded stocks.
Stock indexes started higher Monday but turned sharply lower at midmorning as a rebound in the value of the dollar stalled a rally in commodities. Early gains in prices for oil and other commodities had pushed up shares of energy and materials companies.
The sharp swings in currency and commodities markets sent the Dow Jones industrial average whipsawing in a 200-point range, surrendering an early advance for a loss of 104 points. Stocks have fallen in four of the last five days.
"This is the tug-of-war that's been going on for a while now," said Samuel Dedio, portfolio manager of the Artio U.S. Smallcap Fund in New York, referring to sparring between the dollar and stocks.
Oil gave up early gains to settle down $1.82 at $78.68 per barrel on the New York Mercantile Exchange. That hurt the shares of major oil companies such as ConocoPhillips.
Changes in the dollar's value against other currencies frequently send commodities prices up or down. Since most commodities are priced in dollars they become more attractive to investors outside the U.S. when the dollar is weak, and more expensive when the dollar is strong.
Analysts also said some investors are looking to pocket gains after a stock market run that has stretched nearly eight months and brought share prices to their highest levels in a year. more...
Bloomberg U.S. Markets Wrap: Stocks, Commodities Slide as Dollar Rebounds
Oct. 26 (Bloomberg) -- U.S. stocks slid, erasing an early rally, on concern lawmakers will phase out a tax credit for homebuyers and Bank of America Corp. will have to sell shares to pay back its government bailout. The dollar rebounded from a 14- month low against the euro and oil wiped out an early advance.
All 12 shares in a gauge of homebuilders dropped as senators discussed reducing an $8,000 tax credit for first-time buyers. Bank of America sank 5.1 percent on speculation the government will force the bank to raise more capital, while Fifth Third Bancorp, SunTrust Banks Inc. and U.S. Bancorp lost at least 3.2 percent on downgrades from analyst Dick Bove. Treasuries fell, with 10-year yields touching a two-month high.
The Standard & Poor’s 500 Index tumbled 1.2 percent to 1,066.95 at 4:04 p.m. in New York. The Dow Jones Industrial Average retreated 104.22 points, or 1.1 percent, to 9,867.96. Almost five stocks dropped for each that rose on the New York Stock Exchange.
“Plenty of news for traders to sell on,” said James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “We’ve still got a rise in loan losses. Some banks will probably have to raise further capital. And on the tax-credit front, we already know we won’t have that forever. But after a nice stock market run, a lot of players wanted to have a pause.”
Equities rallied earlier, sending the S&P 500 up as much as 1.1 percent, as investors grew more confident that better-than- estimated profits will fuel further equity gains. About 80 percent of companies in the S&P 500 that reported third-quarter results have topped analysts’ earnings projections, exceeding the record pace of 72.3 percent for the period ended in June. more...
All 12 shares in a gauge of homebuilders dropped as senators discussed reducing an $8,000 tax credit for first-time buyers. Bank of America sank 5.1 percent on speculation the government will force the bank to raise more capital, while Fifth Third Bancorp, SunTrust Banks Inc. and U.S. Bancorp lost at least 3.2 percent on downgrades from analyst Dick Bove. Treasuries fell, with 10-year yields touching a two-month high.
The Standard & Poor’s 500 Index tumbled 1.2 percent to 1,066.95 at 4:04 p.m. in New York. The Dow Jones Industrial Average retreated 104.22 points, or 1.1 percent, to 9,867.96. Almost five stocks dropped for each that rose on the New York Stock Exchange.
“Plenty of news for traders to sell on,” said James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “We’ve still got a rise in loan losses. Some banks will probably have to raise further capital. And on the tax-credit front, we already know we won’t have that forever. But after a nice stock market run, a lot of players wanted to have a pause.”
Equities rallied earlier, sending the S&P 500 up as much as 1.1 percent, as investors grew more confident that better-than- estimated profits will fuel further equity gains. About 80 percent of companies in the S&P 500 that reported third-quarter results have topped analysts’ earnings projections, exceeding the record pace of 72.3 percent for the period ended in June. more...
Palmoil HQ Crude Palm Oil Ends Down On Profit-Taking, Crude
Crude palm oil futures on Malaysia’s derivatives exchange ended lower Monday, easing from last week's rally as supportive leads from higher exports were offset by profit-taking, trade participants said.The benchmark January contract on the Bursa Malaysia Derivatives ended MYR20 lower at MYR2,218 a metric ton, after moving in a narrow MYR2,205-MYR2,235/ton range.
Prices eased off towards the end of trade Monday, tracking lower soyoil and crude futures in Asian trade.
The lack of buying interest in the cash market also damped sentiment in futures trading, as prices were off intraday highs.
"Many investors were liquidating positions to take profits after last week's run-up in prices. But prices were able to hold above MYR2,200 as a rise in exports gave some support," said a trading executive from a Kuala Lumpur-based commodities brokerage.
Cargo surveyor Intertek Agri Services estimated Malaysia's palm oil exports during the Oct. 1-25 period at 1.12 million tons, up 16% versus a month earlier.
Another surveyor, SGS (Malaysia) Bhd., estimated the numbers at 1.11 million tons, up 6.8%.
At 1013 GMT, New York Mercantile Exchange light, sweet crude oil for December delivery was trading 33 cents lower at $80.17 a barrel.
CPO prices are likely to move in a MYR2,150-MYR2,300 range in the near term, said a Singapore-based trading executive.
Meanwhile, an India-based senior federal official said since August, seven Indian states have placed import orders through state-run trading companies for 346,070 tons of edible oil, including palm oil, to boost domestic supplies.
Andhra Pradesh, Tamil Nadu, Maharashtra, West Bengal, Himachal Pradesh, Sikkim and Haryana will import edible oil in tranches through March 2010 to support government welfare programs.
Nearly 35,000 tons have already been sent to the states as of mid-October, the official said.
The state firms will import mainly refined, bleached and deodorized palm olein from Malaysia and Indonesia at an average price of around $800/ton.
Earlier this month, the Solvent Extractors' Association of India put September palm oil imports at 544,091 tons, up from 334,334 tons a year earlier.
The rise in imports by India, one of the world's biggest buyers of edible oils, may boost the global prices of vegetable oils.
In the cash market, cash palm olein for January/February/March shipment traded at $700/ton, free on board Malaysian ports, a Singapore-based trading executive said.
Cash CPO for prompt shipment was offered MYR20 lower at MYR2,220/ton.
A total of 9,918 lots of CPO were traded on the BMD, versus 13,687 lots Friday.
The open interest stood at 82,582 lots Monday, down from 83,313 lots. One lot is equivalent to 25 tons.
Palmoil HQ Demand For Eco-Friendly Palm Oil Rises Amid Anti-Palm Lobby
Demand for eco-friendly palm oil sourced from major producers Indonesia and Malaysia has risen over the last two weeks, said an industry executive, fueling hope that buyers aren't turning their back yet despite a renewed anti-palm lobby by nongovernmental organizations and consumer groups."We have some significant volume traded (over the last two weeks). Over 180,000 palm and palm kernel oil certificates have been traded," said Bob Norman, manager at U.K.-based GreenPalm, a brokerage recognized by the Roundtable on Sustainable Palm Oil (RSPO) for trade in eco-friendly palm oil certificates.
One GreenPalm certificate is equivalent to a metric ton of certified palm oil.
The volume accounts for 11% of 1.57 million tons, the combined annual capacity of RSPO-certified producers in Malaysia, Indonesia and Papua New Guinea as of May 2009.
The rise in demand was mainly driven by a lower premium attached to certified palm oil, which has been shrinking to around $10 per certificate from $40, when the first green palm oil was shipped to European markets last November, Norman said via email over the weekend.
Through GreenPalm, RSPO-certified palm oil producers receive GreenPalm certificates when they register an amount of their palm oil output. The certificates will be up for auction on GreenPalm's trading platform, where buyers bid and buy certificates online.
When food producers buy these eco-friendly certificates, it entails that money goes to growers who produce palm oil with minimal damage to the environment.
Data from GreenPalm's Web site showed that consumer goods companies such as Cadbury Plc (CBRY.LN) and Unilever Plc (ULVR.LN), previously criticized for shying away from higher-priced sustainable palm oil, are now buying more. Like other consumer products manufacturers, Cadbury and Unilever pour palm oil into a wide variety of food and cosmetic products such as biscuits, margarine and lipsticks.
The RSPO was formed after oil palm growers drew flak from NGOs and environmentalists who said oil palm land cultivation led to deforestation and an increase in greenhouse gas emissions.
RSPO-certified producers using the GreenPalm trading platform include Malaysia-based major plantation firms Sime Darby Bhd. (4197.KU), United Plantations Bhd. (2089.KU), Kuala Lumpur Kepong Bhd. (2445.KU) and Papua New Guinea-based New Britain Palm Oil Ltd. (NBPO.LN).
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
Indopremier In Its Best & Comfortable Seats BTPN (BUY - TP Rp4.100)
BTPN reported weak 3Q09 results. Net profit surged aggressively on QoQ by 51% but trimmed down by 18% YoY hit by higher operating expense charge as the bank continues expanding franchise sending signal of lower earnings this year. However going forward as operating expenses subdued, strong and positive growth is on the way. BUY
Strong Franchise in Provinces Where Retiree Will Come
Data from Central Statistic Agency disclosed that retiree (age > 65 years old) will increase from 4.7% in 2008 to 8.5% out of total Indonesia population in 2025 with the highest contribution coming from East Java province, Yogyakarta, East Java, Bali and Sulawesi. The data is somewhat congruent with current province earnings contributor for BTPN which coming from East Java and Central Java as the highest, Sumatera in the second, Kalimantan Sulawesi in the third and West Java as the least contributor. Going forward, we believe the bank already in its best comfortable seats to see an outgrowing number in pension loan.
Ample Capacity to Grow
The bank’s capacity to expand is widening given LDR ratio down to 83.0% from the same period year ago at 85.6%. However we expect LDR ratio is gear up at 84% level to attain Rp15.2 trillion outstanding credits at this full year 2009. Our forecast is justified by current BTPN’s CAR in 3Q09 21.3% more than enough than BI red standard level 8%.
Earnings - Under Pressure, Upsurge Going Forward
BTPN posted net profit in 3Q09 or 18% YoY subdued from the same period year ago sent signal of lower bottom line result in FY09F amidst sound growth by quarters. Nevertheless FY10F would probably provide substantial positive circumstances for BTPN because: the new elected government will raise salary of civil servant including retiree of about 5%; The bank’s marketable securities mostly tied up in SBI, upsurge in BI rate next year gives more optimism earnings from marketable securities will also inflate; loan pricing is likely to shift upward; lower cost-to-income ratio.
Valuation and Recommendation
We shift forward our target price using FY10F as cut point valuation and increased our target price from Rp3,035 to Rp4,100 implying 6.8x PE and 1.6x PBV FY10F based on Gordon Growth Methodology. We view BTPN as a growth bank with visible income stream, expertise in least competition and high yield segment, low loan losses, high degree of strong core capital and good management. BUY.
Strong Franchise in Provinces Where Retiree Will Come
Data from Central Statistic Agency disclosed that retiree (age > 65 years old) will increase from 4.7% in 2008 to 8.5% out of total Indonesia population in 2025 with the highest contribution coming from East Java province, Yogyakarta, East Java, Bali and Sulawesi. The data is somewhat congruent with current province earnings contributor for BTPN which coming from East Java and Central Java as the highest, Sumatera in the second, Kalimantan Sulawesi in the third and West Java as the least contributor. Going forward, we believe the bank already in its best comfortable seats to see an outgrowing number in pension loan.
Ample Capacity to Grow
The bank’s capacity to expand is widening given LDR ratio down to 83.0% from the same period year ago at 85.6%. However we expect LDR ratio is gear up at 84% level to attain Rp15.2 trillion outstanding credits at this full year 2009. Our forecast is justified by current BTPN’s CAR in 3Q09 21.3% more than enough than BI red standard level 8%.
Earnings - Under Pressure, Upsurge Going Forward
BTPN posted net profit in 3Q09 or 18% YoY subdued from the same period year ago sent signal of lower bottom line result in FY09F amidst sound growth by quarters. Nevertheless FY10F would probably provide substantial positive circumstances for BTPN because: the new elected government will raise salary of civil servant including retiree of about 5%; The bank’s marketable securities mostly tied up in SBI, upsurge in BI rate next year gives more optimism earnings from marketable securities will also inflate; loan pricing is likely to shift upward; lower cost-to-income ratio.
Valuation and Recommendation
We shift forward our target price using FY10F as cut point valuation and increased our target price from Rp3,035 to Rp4,100 implying 6.8x PE and 1.6x PBV FY10F based on Gordon Growth Methodology. We view BTPN as a growth bank with visible income stream, expertise in least competition and high yield segment, low loan losses, high degree of strong core capital and good management. BUY.
Credit Suisse - SAMPOERNA AGRO (SGRO): In Line bumper crop & +63% QoQ CPO output in 3Q09- reit Buy
SGRO IJ (@Rp2,425- 12.0x 2010F PER) remains the cheapest CPO stock in CS Indonesia Plantation stocks traded at IDX, while 2nd Cheapest after IFAR SP (@SGD1.80- 11.2x 2010F PER). We continue to recommend Small-Cap Buy for SGRO!
· Teddy Oetomo (Daily): SGRO’s 3Q09A CPO output jumped by 63% QoQ and 104% YoY. Indeed, in 3Q09A alone, SGRO produced 94,744 tons of CPO, 11.3% higher than the total CPO produced in the whole 1H09A. We had previously highlighted our expectations for strong 3Q09 production for SGRO. We noted the risk that the market had not adequately accounted for the 3Q09 bumper crop and thus underestimated SGRO’s production numbers and earnings, leading SGRO to trade at a discount to its local peers. As such, our 2009E earnings are 34% above consensus.
· SGRO continues to trade at a discount to its local and regional peers. Indeed, SGRO trades at the second lowest 2010E P/E among all the CPO counters under our coverage. We maintain our OUTPERFORM rating on the counter and target price of Rp2600/share (based on 13x 10E P/E) for now, while awaiting its 3Q09 results (to be announced at the end of October 2009). However, at current valuations, we prefer IFAR to SGRO and LSIP.
· Teddy Oetomo (Daily): SGRO’s 3Q09A CPO output jumped by 63% QoQ and 104% YoY. Indeed, in 3Q09A alone, SGRO produced 94,744 tons of CPO, 11.3% higher than the total CPO produced in the whole 1H09A. We had previously highlighted our expectations for strong 3Q09 production for SGRO. We noted the risk that the market had not adequately accounted for the 3Q09 bumper crop and thus underestimated SGRO’s production numbers and earnings, leading SGRO to trade at a discount to its local peers. As such, our 2009E earnings are 34% above consensus.
· SGRO continues to trade at a discount to its local and regional peers. Indeed, SGRO trades at the second lowest 2010E P/E among all the CPO counters under our coverage. We maintain our OUTPERFORM rating on the counter and target price of Rp2600/share (based on 13x 10E P/E) for now, while awaiting its 3Q09 results (to be announced at the end of October 2009). However, at current valuations, we prefer IFAR to SGRO and LSIP.
Credit Suisse - UNITED TRACTORS (UNTR): In Line seasonally low September Operating Data- reit Buy
continue like UNTR as a unique play on Coal Sector (proxy to national coal production growth), with upside from coal mines acquisitions, backed by Strong Management and Strong Balance sheet! At Rp15,900/share, UNTR IJ is trading on 13.7x 2010F PER with 7% EPS Growth. I continue to recommend Buy on UNTR!
· Arief Wana (Daily): Due to the Lebaran holidays, United Tractor’s September operating data was seasonally weak, but we continue to see positive momentum emerging. Construction machinery sales volume declined 27% MoM (-27% YoY) to 223 units, bringing the YTD figures to 2,237 units (-41% YoY). It was on track to meet our forecasts. We continued to see recovery in the non-mining sector.
· The mining contracting business continued to be the star among UT’s other divisions. Its monthly production volume continued to improve by 25% YoY (despite -3% MoM) leading to YTD data reaching 75-79% of our forecasts. In addition, its mining stripping ratio continued to remain high (9.0x).
· The coal mining division came in flat on MoM basis, while it is down 34% YoY. It remains the weakest point due to its higher contracted price locked in agreements.
· We continue to believe that UT is well positioned to benefit from the recovery in commodity prices and the infrastructure sector. We maintain our OUTPERFORM rating on the stock.
· Arief Wana (Daily): Due to the Lebaran holidays, United Tractor’s September operating data was seasonally weak, but we continue to see positive momentum emerging. Construction machinery sales volume declined 27% MoM (-27% YoY) to 223 units, bringing the YTD figures to 2,237 units (-41% YoY). It was on track to meet our forecasts. We continued to see recovery in the non-mining sector.
· The mining contracting business continued to be the star among UT’s other divisions. Its monthly production volume continued to improve by 25% YoY (despite -3% MoM) leading to YTD data reaching 75-79% of our forecasts. In addition, its mining stripping ratio continued to remain high (9.0x).
· The coal mining division came in flat on MoM basis, while it is down 34% YoY. It remains the weakest point due to its higher contracted price locked in agreements.
· We continue to believe that UT is well positioned to benefit from the recovery in commodity prices and the infrastructure sector. We maintain our OUTPERFORM rating on the stock.
Credit Suisse - ASTRA INT'L (ASII): In Line September continued Rebounding Auto volume- reit Outperform
ASII IJ remains a Core Holding in Indonesian market, given 1) Strong Domestic Franchise and upside from Commodities, 2) Strong Management and Balance Sheet, and 3) Top-5 largest stocks in Indonesia. At Rp32,650/share, ASII IJ is trading on 13.7x 2010F PER with +12% EPS Growth. I personally recommend to Accumulate for 12-months horizon!
· Arief Wana (Daily): Due to the Lebaran holidays, Indonesia’s September auto sales volume dropped on both MoM (23% for cars and 33% for motorcycles) and YoY bases. Despite the seasonality, the September volume remained higher than the 1H09 average, suggesting the positive momentum. On 9M09, the volume declined by 28% YoY (versus our forecasts’ of -20%) for cars and 14% YoY (-10%) for motorcycles. We expect the momentum to reverse in the coming month and YoY growth to accelerate due to the weak 4Q08 data.
· The positive outcome is on Astra’s market shares for both cars and motorcycles, which continue to stay high (above its normal market share) despite a rising market, especially for motorcycles. The impact of new scooter capacity in motorcycle market continues to have positive impact on Astra’s market share.
· While we see earnings upside risks on the motorcycle division (currently only 10% of Astra’s profit), we maintain our earnings for the time being.
· Arief Wana (Daily): Due to the Lebaran holidays, Indonesia’s September auto sales volume dropped on both MoM (23% for cars and 33% for motorcycles) and YoY bases. Despite the seasonality, the September volume remained higher than the 1H09 average, suggesting the positive momentum. On 9M09, the volume declined by 28% YoY (versus our forecasts’ of -20%) for cars and 14% YoY (-10%) for motorcycles. We expect the momentum to reverse in the coming month and YoY growth to accelerate due to the weak 4Q08 data.
· The positive outcome is on Astra’s market shares for both cars and motorcycles, which continue to stay high (above its normal market share) despite a rising market, especially for motorcycles. The impact of new scooter capacity in motorcycle market continues to have positive impact on Astra’s market share.
· While we see earnings upside risks on the motorcycle division (currently only 10% of Astra’s profit), we maintain our earnings for the time being.
Credit Suisse - INDOSAT (ISAT): Disappointing 3Q09 despite a turnaround sign- reit Outperform rating
Prefer TLKM IJ in the short-term, given continued dominance of its 65%-owned subsidiary Telkomsel (55% of Revenue share), with ISAT IJ and EXCL IJ to me are tight in fighting for Revenue Share (17-18% and 15-16% respectively)! At Rp5,500/share, ISAT IJ is trading on 13.6x-11.5x 2009F-2010F PER and 5.2x-4.8x 2009F-2010F EV/EBITDA is strill trading at discount to TLKM IJ(vs TLKM IJ @Rp8,650- 14.7x-14.6x 2009F-2010F PER and 5.2x-4.9x 2009F-2010F EV/EBITDA)! I personally think it will be clearer if ISAT IJ could continue to show turnaround in 4Q09 results, while I think QTEL has a chance to achieve a turnaround given their investments/experiences in more than 10 countries already.
· Coin McCallum (Attached): PT Indosat Tbk (ISAT.JK, Rp5550.00, OUTPERFORM, TP Rp6450.00) published limited information on its 3Q09 operational performance last week - a subscriber figure, a consolidated revenue figure, an EBITDA figure, and a net profit figure . The consolidated revenue grew 1.5% QoQ, driven by a more than 5% QoQ increase in cellular revenue. IDD and MIDI revenues, however, declined, and no explanation has been given for this as yet, the strengthening Rupiah may have affected incoming IDD revenue. On the other hand, we note that this represents the first quarter that Indosat was able to report growth in cellular revenue in FY09, after two consecutive quarters of decline in 1Q and 2Q09.
· On the EBITDA level, Indosat.s EBITDA margin declined to 44.9% in 3Q09, from 48.7% in 2Q09 and 47.9% in 3Q08, resulting in a 6.3% QoQ and 12.5% YoY decline in EBITDA. We note that the new CFO commenced work at Indosat in September. Reported consolidated net income, which included the impact from non-operating items and forex gains/losses, declined by 50.1% QoQ but grew by 6.1% YoY in 3Q09, again, no explanation was given as to the drivers behind this.
· Relative to our FY09E projections, Indosat has therefore achieved only 64.9%, 62.6%, and 66.0% of our consolidated revenue, EBITDA, and reported net profit forecasts during 9M09. However, we believe that Indosat cellular revenue market share has probably already stopped declining in 3Q09 following the changes in management. We expect revenue growth to continue to accelerate into 4Q09. Indosat will publish the full details of its 9M09 unaudited results on 28th October 2009. We await the full explanation of the movement in MIDI and IDD revenues, EBITDA and net profit margins. Maintain OUTPERFORM rating.
· Coin McCallum (Attached): PT Indosat Tbk (ISAT.JK, Rp5550.00, OUTPERFORM, TP Rp6450.00) published limited information on its 3Q09 operational performance last week - a subscriber figure, a consolidated revenue figure, an EBITDA figure, and a net profit figure . The consolidated revenue grew 1.5% QoQ, driven by a more than 5% QoQ increase in cellular revenue. IDD and MIDI revenues, however, declined, and no explanation has been given for this as yet, the strengthening Rupiah may have affected incoming IDD revenue. On the other hand, we note that this represents the first quarter that Indosat was able to report growth in cellular revenue in FY09, after two consecutive quarters of decline in 1Q and 2Q09.
· On the EBITDA level, Indosat.s EBITDA margin declined to 44.9% in 3Q09, from 48.7% in 2Q09 and 47.9% in 3Q08, resulting in a 6.3% QoQ and 12.5% YoY decline in EBITDA. We note that the new CFO commenced work at Indosat in September. Reported consolidated net income, which included the impact from non-operating items and forex gains/losses, declined by 50.1% QoQ but grew by 6.1% YoY in 3Q09, again, no explanation was given as to the drivers behind this.
· Relative to our FY09E projections, Indosat has therefore achieved only 64.9%, 62.6%, and 66.0% of our consolidated revenue, EBITDA, and reported net profit forecasts during 9M09. However, we believe that Indosat cellular revenue market share has probably already stopped declining in 3Q09 following the changes in management. We expect revenue growth to continue to accelerate into 4Q09. Indosat will publish the full details of its 9M09 unaudited results on 28th October 2009. We await the full explanation of the movement in MIDI and IDD revenues, EBITDA and net profit margins. Maintain OUTPERFORM rating.
Credit Suisse - BANK DANAMON (BDMN): Flash Report- In Line Strong +23% YoY 3Q09 PPOP- reit Buy
Teddy Oetomo is forecasting average ROE of 23% in 2011F, which justify 3x 2010F PBR Target Price of Rp5,700 (implying 17.5x 2010F PER and 12.3x 2011F PER). Again during Peak Historical PBR in 200F was 4x and average Historical 2007 PBR was 3.5x. At Rp4,800, BDMN is trading on 14.7x 2010F PER with +67% EPS Growth and 2.2x 2010F PBR, on the back of Quality Management, strong back-up from Temasek Group, and clear beneficiary of remained low prospective domestic interest rates historically! Buy BDMN!
· Teddy Oetomo (Flash Report): Robust PPOP growth; FY09-11E earnings revised down by 3.3-4.5%,: BDMN is on track to deliver a robust outlook for 2010, in our view. In 3Q09A, BDMN achieved 100 bp QoQ NIM growth, leading to robust pre-provision profit growth (+13.4% YoY for 9M09A and 23% YoY for 3Q09A). Its normalised 3Q09A net income was up by 4% YoY (+5% QoQ).
· On track for robust 2010E: Including derivative loss write-offs, BDMN’s 9M09A net income was 67% of our old forecasts and 72% of consensus’ estimates. We expect BDMN’s ROE to expand from 14.4% in FY09 to 18.5% in FY10, given: 1) the absence of derivative loss write-offs (which itself may boost earnings by 20%); 2) stronger loan growth (8.7% in FY09 versus 30% in FY10); 3) a robust NIM outlook, supported by a strengthening low-cost funding base. We tweak our FY09-11E earnings down by 3.3-4.5%, given softer than expected loan growth and higher than expected provision expenses.
· Sustainability of profitability: We expect BDMN’s superior 3Q09A NIM to be sustainable in 4Q09A, given the recent agreement by 14 banks to lower deposit rates to a maximum of 7% by December 2009. However, we expect BDMN’s NIM to compress from 11.8% in 3Q09A to 10.7% in FY10E (though remain 90 bps higher than its FY08A NIM of 9.8%). We commend BDMN for its strengthening low-cost deposit base, which puts downward pressure on future funding costs, in our view.
· Reasonable valuations: BDMN is currently trading in line with regional peers (based on P/B and ROE valuations). However, we believe that it offers attractive value with potential for rapid ROE recovery. In 2010, we expect BDMN to achieve 18.5% ROE (11% below its 2007 ROE of 20.9%), while our target price implies 2010E P/B of 3x, remaining at a 14% discount to the average 2007A P/B of 3.5x. We maintain our OUTPERFORM rating and target price of Rp5700.
· Teddy Oetomo (Flash Report): Robust PPOP growth; FY09-11E earnings revised down by 3.3-4.5%,: BDMN is on track to deliver a robust outlook for 2010, in our view. In 3Q09A, BDMN achieved 100 bp QoQ NIM growth, leading to robust pre-provision profit growth (+13.4% YoY for 9M09A and 23% YoY for 3Q09A). Its normalised 3Q09A net income was up by 4% YoY (+5% QoQ).
· On track for robust 2010E: Including derivative loss write-offs, BDMN’s 9M09A net income was 67% of our old forecasts and 72% of consensus’ estimates. We expect BDMN’s ROE to expand from 14.4% in FY09 to 18.5% in FY10, given: 1) the absence of derivative loss write-offs (which itself may boost earnings by 20%); 2) stronger loan growth (8.7% in FY09 versus 30% in FY10); 3) a robust NIM outlook, supported by a strengthening low-cost funding base. We tweak our FY09-11E earnings down by 3.3-4.5%, given softer than expected loan growth and higher than expected provision expenses.
· Sustainability of profitability: We expect BDMN’s superior 3Q09A NIM to be sustainable in 4Q09A, given the recent agreement by 14 banks to lower deposit rates to a maximum of 7% by December 2009. However, we expect BDMN’s NIM to compress from 11.8% in 3Q09A to 10.7% in FY10E (though remain 90 bps higher than its FY08A NIM of 9.8%). We commend BDMN for its strengthening low-cost deposit base, which puts downward pressure on future funding costs, in our view.
· Reasonable valuations: BDMN is currently trading in line with regional peers (based on P/B and ROE valuations). However, we believe that it offers attractive value with potential for rapid ROE recovery. In 2010, we expect BDMN to achieve 18.5% ROE (11% below its 2007 ROE of 20.9%), while our target price implies 2010E P/B of 3x, remaining at a 14% discount to the average 2007A P/B of 3.5x. We maintain our OUTPERFORM rating and target price of Rp5700.
Credit Suisse - ECONOMICS: Trip notes and BI vs FX Intervention policy & New Cabinet- remains Positive
Market Events are now 1) 3Q09 earnings season this week until end-October, 2) The 100 days progress of President SBY from October 21st until end-January, 3) January Effect, 4) 4Q09 results in Feb-April, and 5) 1Q10 results by end-April. At JCI 2,468pts (14.0x 2010F PER with 19.3% EPS Growth), we continue to be Positive with Indonesian markets with 6-9 months Index Target circa 2,700pts (15.2x 2010F PER, based on average 1992-1997 market PER), with Top-Picks remain UNTR (13.7x), INDF (13.8x), BBRI (10.1x)/BDMN (14.7x), PGAS (11.5x), ASII (13.7x)/BBCA (15.4x), SMGR (10.4x) and PTBA (8.8x)/ITMG (13.9x)! My small cap picks are SGRO (12.0x)/LSIP (13.7x), ELTY (45% Discount to RNAV)/CTRA (41% Discount to RNAV) and JSMR (14.1x)!
· Cem Karacadag (Daily): We visited Jakarta recently. Our main takeaways are: 1) there should be no surprises in the new cabinet or policy programme due by this and the next weeks, 2) the appreciation of the Indonesian rupiah may have run its course, with the balance of risks potentially favouring its stability, if not a pull back, in the rest of 2009, and 3) inflation could become a thorn in 2010, although Bank Indonesia is in no hurry to hike rates.
· Arief Wana (Attached New Cabinet): My view on New Cabinet announcement last week is that it looks disappointing at the surface (20 out of 34 are from political parties, including Golkar), but to be fair, these political parties have signed an agreement with SBY's democrat to support the coalition. This agreement would also enable SBY to reshuffle if targets or achievements were not met. And this could be a soon as the first 100days. SBY has been quoted as saying that the ministers are responsible to President, not their political leaders. So, it is premature to say that SBY's strong mandate is not going to be effective, in my view.
· Cem Karacadag (Daily): We visited Jakarta recently. Our main takeaways are: 1) there should be no surprises in the new cabinet or policy programme due by this and the next weeks, 2) the appreciation of the Indonesian rupiah may have run its course, with the balance of risks potentially favouring its stability, if not a pull back, in the rest of 2009, and 3) inflation could become a thorn in 2010, although Bank Indonesia is in no hurry to hike rates.
· Arief Wana (Attached New Cabinet): My view on New Cabinet announcement last week is that it looks disappointing at the surface (20 out of 34 are from political parties, including Golkar), but to be fair, these political parties have signed an agreement with SBY's democrat to support the coalition. This agreement would also enable SBY to reshuffle if targets or achievements were not met. And this could be a soon as the first 100days. SBY has been quoted as saying that the ministers are responsible to President, not their political leaders. So, it is premature to say that SBY's strong mandate is not going to be effective, in my view.
Mandiri Sekuritas UNSP: Ready to take off
Bakrie Sumatera Plantations (UNSP), via its subsidiary BSP Finance B.V.has issued US$25mn bond with coupon rate of 10.75% which will mature in 2011. Note that the buyer of this bond is Bookwise Investments Limited – a new company fully owned by PT Nibung Arthamulia (90% owned by UNSP). Therefore, an additional interest expense of US$0.6-2.7mn for FY09F-10F would be netted off at consolidated level. Overall, there is no earnings impact from this transaction, but more on preparation for another huge expansion, in our view. Reiterate our ! Buy call with TP of Rp1,100/share.
New US$25mn treasury bond issue. UNSP has recently issued US$25mn bond with coupon rate of 10.75%l maturing in 2011. The terms and conditions of this new bond were similar with its current outstanding bonds of US$160mn. However, the new bond would not be listed in the market since the buyer would be Bookwise Investments Limited, the subsidiary of PT Nibung Arthamulia (90% owned by UNSP). Hence, there is no cash inflow for now. Based on our recent conversation with management, this deal is intended for future funding purpose.
No impact on earnings. Since this is an inter-company debt, an additional interest expense of US$0.6mn for FY09F and US$2.7mn for FY10F would be netted off at consolidated level. Thus, such transaction would not affect our financial projections. Our net gearing assumption of 47.5% and 39.2% for FY09-10F remains intact. At this juncture, this deal would only provide greater flexibility to future expansion or acquisition project, in our view.
Expecting 7-10% CPO production growth. Considering its young plantation profile, UNSP expected to reach around 7-10% CPO production growth this year. In terms of capex, UNSP has spent around Rp300bn as of 9M09, while full year target was at Rp300-350bn. Therefore, we positively view company’s CPO production growth going forward. As of FY09F, we foresee some 6.3% yoy growth in CPO production.
Maintain our forecast, target price, and recommendation. We maintain our earnings forecast intact at this point. Currently, the stock is trading at PER09-10F of 10.5x and 8.7x and EV/ha of US$5,904. On average, plantation companies under our coverage are trading at PER09F-10F of 16.8x and 12.8x. We retain our Buy call and target price of Rp1,100/share as we believe that valuations are still cheap. Our target price was derived from DCF valuation ! (WACC: 12 1% and TG: 5.0%).
New US$25mn treasury bond issue. UNSP has recently issued US$25mn bond with coupon rate of 10.75%l maturing in 2011. The terms and conditions of this new bond were similar with its current outstanding bonds of US$160mn. However, the new bond would not be listed in the market since the buyer would be Bookwise Investments Limited, the subsidiary of PT Nibung Arthamulia (90% owned by UNSP). Hence, there is no cash inflow for now. Based on our recent conversation with management, this deal is intended for future funding purpose.
No impact on earnings. Since this is an inter-company debt, an additional interest expense of US$0.6mn for FY09F and US$2.7mn for FY10F would be netted off at consolidated level. Thus, such transaction would not affect our financial projections. Our net gearing assumption of 47.5% and 39.2% for FY09-10F remains intact. At this juncture, this deal would only provide greater flexibility to future expansion or acquisition project, in our view.
Expecting 7-10% CPO production growth. Considering its young plantation profile, UNSP expected to reach around 7-10% CPO production growth this year. In terms of capex, UNSP has spent around Rp300bn as of 9M09, while full year target was at Rp300-350bn. Therefore, we positively view company’s CPO production growth going forward. As of FY09F, we foresee some 6.3% yoy growth in CPO production.
Maintain our forecast, target price, and recommendation. We maintain our earnings forecast intact at this point. Currently, the stock is trading at PER09-10F of 10.5x and 8.7x and EV/ha of US$5,904. On average, plantation companies under our coverage are trading at PER09F-10F of 16.8x and 12.8x. We retain our Buy call and target price of Rp1,100/share as we believe that valuations are still cheap. Our target price was derived from DCF valuation ! (WACC: 12 1% and TG: 5.0%).
Langganan:
Postingan (Atom)