The markets are volatile but overall remain within established ranges, save for gold which continues to roof and is easily on track to have a look at the $1100 - $1150 level. For the bulls the most exciting aspect of the rally is the fact that it is taking place against every known tradable currency, the sure sign of any gold rally.
China – with the world’s largest FX reserves – at around 2.3 trillion has just 1054 tonnes of gold, “just” $37 billion at current levels, a mere 1.6% or thereabouts of their overall foreign currency holdings. As shown below the BRIC countries between them (actually, more accurately the RIC countries as Brazil’s gold holdings are unchanged over the year) have been building their gold reserves rather smartly, from around 50 million oz at the beginning of the year to around 72moz currently.
So does this mean that central banks are flooding into gold, or that there is a sea-change in appetite for gold by central banks? We doubt it. To a large extent the decision by India to buy the IMF gold is a function of there being available a large bloc of liquidity at
largely a fixed price and for the Indians, this represented an opportunistic ability to pick up gold. China is now expected to express the same opportunistic tendency, but its gold reserve accumulation over the past few years has been entirely a function of soaking up excess liquidity of bullion in the local market and thus has not represented – even at the margin – a decision to sell FX reserves to buy gold.
Jumat, 06 November 2009
JP Morgan - Another look at Bakrie stocks first big acquisition since new cabinet
Energi Mega (ENRG) yesterday announced a deal to acquire a 10% interest in Masela PSC block. Key information such as pricing and reserves data are noticeably absent. Official query by the stock exchange may make ENRG provide additional disclosure later on. Looking at ENRG’s acquisition track record and the deal’s dynamics, this deal may later proof as good news for the company. Note however that ENRG management has hinted for the need to do rights issue, to pay for the acquisition and for debt reduction.
To recap, ENRG acquired a stake in Kangean block in Aug-04 for US$0.8/boe (US$165mn) on 2P reserves. In May-07, it farmed out 50% of the same Kangean block for US$3/boe (US$360mn). Capex needs for the development of the Kangean block were borne by the new partner (Japex).
From my understanding, Masela could be the second largest gas block in Indonesia after Tangguh. Inpex conducted appraisal drilling in 2007 to early 2008. The company has since increased the reserves estimate, initially estimated at 10-14 TCF (1.67-2.33 billion barrels) based on 4 appraisal wells. On this number, a 10% interest should work out to 166-233 million barrels, vs. ENRG current 2P of 360 million barrels.
ENRG’s 2P reserves currently stands at 360 million barrels, 237 of which is Kangean. Based on its current market cap of Rp4,680bn (US$491mn) and a net debt Rp4,529bn (US$475mn), I calculate an EV/2P reserves of US$2.68 for the stock. An acquisition price of below US$1/boe could be seen as a value enhancing deal by the market, with share price impact depending on the size of Masela’s 2P reserves as well.
Importantly, the positive sentiment may spill-over to other Bakrie names especially Bumi Resources, who is anticipated to make major acquisitions in the short term as well. The selling flow in Bumi from institutional investors appears to have moderated (total selling flow adds up to more than 12% of the company since CIC news), while newsflow may start to turn for the better.
To recap, ENRG acquired a stake in Kangean block in Aug-04 for US$0.8/boe (US$165mn) on 2P reserves. In May-07, it farmed out 50% of the same Kangean block for US$3/boe (US$360mn). Capex needs for the development of the Kangean block were borne by the new partner (Japex).
From my understanding, Masela could be the second largest gas block in Indonesia after Tangguh. Inpex conducted appraisal drilling in 2007 to early 2008. The company has since increased the reserves estimate, initially estimated at 10-14 TCF (1.67-2.33 billion barrels) based on 4 appraisal wells. On this number, a 10% interest should work out to 166-233 million barrels, vs. ENRG current 2P of 360 million barrels.
ENRG’s 2P reserves currently stands at 360 million barrels, 237 of which is Kangean. Based on its current market cap of Rp4,680bn (US$491mn) and a net debt Rp4,529bn (US$475mn), I calculate an EV/2P reserves of US$2.68 for the stock. An acquisition price of below US$1/boe could be seen as a value enhancing deal by the market, with share price impact depending on the size of Masela’s 2P reserves as well.
Importantly, the positive sentiment may spill-over to other Bakrie names especially Bumi Resources, who is anticipated to make major acquisitions in the short term as well. The selling flow in Bumi from institutional investors appears to have moderated (total selling flow adds up to more than 12% of the company since CIC news), while newsflow may start to turn for the better.
CLSA Delta Dunia (DOID IJ) placement
CLSA is a joint global co-ordinator and joint bookrunner for a placement in Delta Dunia (DOID IJ) to raise up to US$460m.
Books still open until 5pm (HK) today. The Delta book is now covered on the base deal size.
Company: PT Delta Dunia Makmur Tbk (DOID IJ)
Deal Type: Placement of Existing Shares
Vendor: Mosaic Capital
Deal Size: 1,620,000,000 existing shares with an upsize option of up to 980,000,000 existing shares, approx 24%-38% of existing share capital
Price Range: Rp1,350 to Rp1,700
Selling restrictions: Reg S and 144A
Fees & Charges: 1% including normal market charges
Bookrunners: CLSA, Macquarie, Danereksa, Bahana
Lock up: 6 months on Mosaic Capital and Northstar
Timetable:
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)
Books still open until 5pm (HK) today. The Delta book is now covered on the base deal size.
Company: PT Delta Dunia Makmur Tbk (DOID IJ)
Deal Type: Placement of Existing Shares
Vendor: Mosaic Capital
Deal Size: 1,620,000,000 existing shares with an upsize option of up to 980,000,000 existing shares, approx 24%-38% of existing share capital
Price Range: Rp1,350 to Rp1,700
Selling restrictions: Reg S and 144A
Fees & Charges: 1% including normal market charges
Bookrunners: CLSA, Macquarie, Danereksa, Bahana
Lock up: 6 months on Mosaic Capital and Northstar
Timetable:
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)
Associated Press Stocks jump as better jobs data, upbeat forecast from Cisco boost hopes for economic rebound
NEW YORK (AP) -- A drop in unemployment claims and an upbeat forecast from Cisco Systems Inc. gave investors a jolt of confidence a day before a key government report on jobs.
The Dow Jones industrial average jumped 200 points Thursday to its first close above 10,000 in two weeks, while the Nasdaq composite index led major indexes with a gain of 2.4 percent after Cisco, the maker of computer-networking gear, predicted its revenue would grow.
The Labor Department said the number of newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January and fewer than economists had forecast. Initial claims are considered a gauge of the pace of layoffs.
The report unleashed a wave of optimism about the government's monthly report on employment Friday, which will shape trading because of the ties between joblessness and consumer spending. Economists say spending must increase for the economy to mount a sustained recovery. Analysts project that the unemployment rate rose to 9.9 percent in October.
The biggest jump in productivity in six years drove hopes that lower costs will boost corporate profits. The report also illustrated, though, that many employers remain reluctant to hire.
The government said the amount of output per hour worked rose 9.5 percent in the July-September quarter.
Meanwhile, retailers posted sales gains for the second straight month in October after watching business slide for more than a year. The retail industry posted a 2.1 percent sales gain for October, according to an International Council of Shopping Centers-Goldman Sachs tally. Investors are looking for any sign that consumers are willing to spend more as the holiday shopping season approaches.
"The news coming in has been for the most part better than expected," said Mike Boyle, senior vice president and portfolio manager at Advisors Asset Management. more...
The Dow Jones industrial average jumped 200 points Thursday to its first close above 10,000 in two weeks, while the Nasdaq composite index led major indexes with a gain of 2.4 percent after Cisco, the maker of computer-networking gear, predicted its revenue would grow.
The Labor Department said the number of newly laid-off workers seeking unemployment benefits fell to 512,000 last week, the lowest level since January and fewer than economists had forecast. Initial claims are considered a gauge of the pace of layoffs.
The report unleashed a wave of optimism about the government's monthly report on employment Friday, which will shape trading because of the ties between joblessness and consumer spending. Economists say spending must increase for the economy to mount a sustained recovery. Analysts project that the unemployment rate rose to 9.9 percent in October.
The biggest jump in productivity in six years drove hopes that lower costs will boost corporate profits. The report also illustrated, though, that many employers remain reluctant to hire.
The government said the amount of output per hour worked rose 9.5 percent in the July-September quarter.
Meanwhile, retailers posted sales gains for the second straight month in October after watching business slide for more than a year. The retail industry posted a 2.1 percent sales gain for October, according to an International Council of Shopping Centers-Goldman Sachs tally. Investors are looking for any sign that consumers are willing to spend more as the holiday shopping season approaches.
"The news coming in has been for the most part better than expected," said Mike Boyle, senior vice president and portfolio manager at Advisors Asset Management. more...
Reuters Newcastle coal exports rebound 13 pct WoW
Reuters reported that coal exports at Australia Newcastle port, the world largest coal export terminal rebounded by nearly 13% in the latest week while ship queues stayed near a one year low due to smooth port operations.
Port data showed that exports from the eastern coast port, which ships mostly thermal coal used in power generation rose to 2.17 million tonnes in the week to November 2nd.
The number of coal ships arriving a key indicator of demand slipped by three to 22, while the average queue time fell for a third week to five days. After swelling to a two year high of over 50 ships in late August, vessel queues have eased significantly over the past month, after the port operator reinstated an export quota system to distribute port capacity among producers.
About 80% of the coal shipped through Newcastle is thermal coal used mainly by power stations. Companies exporting through the port include Xstrata Plc, Rio Tinto Group and Centennial Coal Ltd.
According to the globalCOAL NEWC Index, prices of power-station coal prices at Newcastle port a benchmark for Asia, gained 2% to USD 74.63 a tonne in the latest week.
(Sourced from Reuters)
Port data showed that exports from the eastern coast port, which ships mostly thermal coal used in power generation rose to 2.17 million tonnes in the week to November 2nd.
The number of coal ships arriving a key indicator of demand slipped by three to 22, while the average queue time fell for a third week to five days. After swelling to a two year high of over 50 ships in late August, vessel queues have eased significantly over the past month, after the port operator reinstated an export quota system to distribute port capacity among producers.
About 80% of the coal shipped through Newcastle is thermal coal used mainly by power stations. Companies exporting through the port include Xstrata Plc, Rio Tinto Group and Centennial Coal Ltd.
According to the globalCOAL NEWC Index, prices of power-station coal prices at Newcastle port a benchmark for Asia, gained 2% to USD 74.63 a tonne in the latest week.
(Sourced from Reuters)
Palmoil HQ Crude Palm Oil Ends Down on Rising Inventories – Range Bound Trade
The benchmark January crude palm oil futures contract on Bursa Malaysia Derivatives (BMD) closed at MYR2,247 a metric ton, down MYR13 or -0.58%, little changed from the opening level of MYR2,260 after trading in a narrow range throughout the day on fears of rising inventories and spillover weakness from crude and soyoil.
Palm oil reserves were at 1.58 million tons at end-September, according to Malaysian Palm Oil Board (MPOB) estimate.
Cash palm olein for January/February/March traded at $690/ton and $687.50/ton, while April/May/June traded at $697.50/ton and $700/ton. Cash CPO for prompt shipment was offered MYR60 lower at MYR2,180/ton.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 18:00 MYT:
Month Close Previous Change High Low
Nov 09 2,175 2,200 Dn 25 2,175 2,161
Dec 09 2,221 2,232 Dn 11 2,226 2,206
Jan 10 2,247 2,260 Dn 13 2,254 2,232
Feb 10 2,266 2,280 Dn 14 2,275 2,255
Daily Palm Oil News Summary:
Palm oil reserves were at 1.58 million tons at end-September, according to Malaysian Palm Oil Board (MPOB) estimate.
Cash palm olein for January/February/March traded at $690/ton and $687.50/ton, while April/May/June traded at $697.50/ton and $700/ton. Cash CPO for prompt shipment was offered MYR60 lower at MYR2,180/ton.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 18:00 MYT:
Month Close Previous Change High Low
Nov 09 2,175 2,200 Dn 25 2,175 2,161
Dec 09 2,221 2,232 Dn 11 2,226 2,206
Jan 10 2,247 2,260 Dn 13 2,254 2,232
Feb 10 2,266 2,280 Dn 14 2,275 2,255
Daily Palm Oil News Summary:
Mandiri Sekuritas JSMR Road to growth
JSMR revenues rose by 4.8%yoy and by 25.6%qoq during 9M09. The growth was backed by rise in traffic of 3.7%yoy reaching 682mn vehicles for 9M09. (75.7% of our FY09F). The results are inline with ours and consensus estimates with operating profit forming 72.9% of ours and 71.0% of consensus estimates. However, because of extraordinary gains, net profit achieved 93% of our FY09F. We maintain our earnings forecast for FY09-10F, and value JSMR at Rp2,100/share based on DCF valuation.
9M09 results inline. JSMR reported 9M09 results with revenues reaching Rp2.6tn (+4.8%yoy). Operating profits however fell by 0.2%yoy because of rising opex primarily coming from toll road maintenance and general administration. There is an increase in toll road service expenses by 13.3% which resulted from the fulfillment of the Minimum Service Standard as one of the requirements of tariff increase. The revenue growth was primarily driven by rising traffic which grew by 3.7%yoy. On qoq basis revenues grew by 5.4%qoq while operating profit by whopping 25.6%qoq. The results are inline with our and consensus estimates wi! th operat ing profit forming 72.9% of our and 71.0% of consensus estimates. However, the company achieved 93.6% of our full year net profit (99.5% of consensus); this is because of a one-time extraordinary gain arising from an equity transaction of JORR W1 section.
Traffic growth. The traffic growth was driven primarily from the Purbaleunyi, Jakarta Outer ring road, Jagorawi and Tomang Cengkareng toll road. They together contribute 60% of the total traffic. The highest traffic growth is in the Purbaleunyi toll road. Tomang-Cengkareng contributes the highest traffic (28%), at least double of traffic on any toll road. JORR and Tomang-Cengkareng contributes highest to the revenues, about 20% each.
4Q09 to be better. We expect 4Q09 to be better because the tariffs have been raised on 11 out of 13 toll roads by average of 16%. In FY07, when the tariffs were raised on the 11 toll roads then 4Q07 contributed 30.1% to revenues. We expect that increased tariffs should contribute 7.1% to total revenues. For FY10F we expect the contribution to be 13.1% from the tariff rise on the 11 toll roads. Separately, company expects the capex in FY09F to reach Rp4.69tn which is inline with our forecasts.
Maintain Buy. We expect revenues to grow by 14.6%yoy in FY10F driven by rising tariffs and operation of new toll roads. Based on our DCF we value JSMR at Rp2,100/share. It implies a PER09-10F of 18.2x-10.6x, respectively.
9M09 results inline. JSMR reported 9M09 results with revenues reaching Rp2.6tn (+4.8%yoy). Operating profits however fell by 0.2%yoy because of rising opex primarily coming from toll road maintenance and general administration. There is an increase in toll road service expenses by 13.3% which resulted from the fulfillment of the Minimum Service Standard as one of the requirements of tariff increase. The revenue growth was primarily driven by rising traffic which grew by 3.7%yoy. On qoq basis revenues grew by 5.4%qoq while operating profit by whopping 25.6%qoq. The results are inline with our and consensus estimates wi! th operat ing profit forming 72.9% of our and 71.0% of consensus estimates. However, the company achieved 93.6% of our full year net profit (99.5% of consensus); this is because of a one-time extraordinary gain arising from an equity transaction of JORR W1 section.
Traffic growth. The traffic growth was driven primarily from the Purbaleunyi, Jakarta Outer ring road, Jagorawi and Tomang Cengkareng toll road. They together contribute 60% of the total traffic. The highest traffic growth is in the Purbaleunyi toll road. Tomang-Cengkareng contributes the highest traffic (28%), at least double of traffic on any toll road. JORR and Tomang-Cengkareng contributes highest to the revenues, about 20% each.
4Q09 to be better. We expect 4Q09 to be better because the tariffs have been raised on 11 out of 13 toll roads by average of 16%. In FY07, when the tariffs were raised on the 11 toll roads then 4Q07 contributed 30.1% to revenues. We expect that increased tariffs should contribute 7.1% to total revenues. For FY10F we expect the contribution to be 13.1% from the tariff rise on the 11 toll roads. Separately, company expects the capex in FY09F to reach Rp4.69tn which is inline with our forecasts.
Maintain Buy. We expect revenues to grow by 14.6%yoy in FY10F driven by rising tariffs and operation of new toll roads. Based on our DCF we value JSMR at Rp2,100/share. It implies a PER09-10F of 18.2x-10.6x, respectively.
BNP Paribas Bank Mandiri - raising earnings and TP to IDR5,500 - BUY
We maintain our BUY call on Bank Mandiri with the revised TP of IDR5,500 based on 2.9x P/BV 2010E due to:
1. The expected lower provisioning charges in 4Q09 prompts us to raise earning forecast by 14% for 2009. NPL is expected to decline to 3.9% by end 2009 from 4.1% in September 09 while the bank still anticipates some write backs as well. Some NPL upgrade, repayment and expected 15% loan growth for 2009 should lead to the lower NPL going forward.
2. We have yet to recognise in the forecast the additional IDR3.4t write backs from the exposure to Garuda Indonesia of which IDR1.4t is expected to be booked when GI goes public next year and the rest to be billed to the government.
3. Higher equity base leads to the TP upgrade, based on 2.9x P/BV 2010. If we include the IDR2.55t net proceed from the GI write back in 2010, our fair value for Mandiri is 2.7x P/BV.
1. The expected lower provisioning charges in 4Q09 prompts us to raise earning forecast by 14% for 2009. NPL is expected to decline to 3.9% by end 2009 from 4.1% in September 09 while the bank still anticipates some write backs as well. Some NPL upgrade, repayment and expected 15% loan growth for 2009 should lead to the lower NPL going forward.
2. We have yet to recognise in the forecast the additional IDR3.4t write backs from the exposure to Garuda Indonesia of which IDR1.4t is expected to be booked when GI goes public next year and the rest to be billed to the government.
3. Higher equity base leads to the TP upgrade, based on 2.9x P/BV 2010. If we include the IDR2.55t net proceed from the GI write back in 2010, our fair value for Mandiri is 2.7x P/BV.
Indopremier ENRG - BUY TP Rp 520 Acquiring More Power
10% Acquisition in Masela PSC Block
ENRG’s subsidiary, PT EMP Energi Indonesia, has signed an agreement with INPEX Masela, Ltd (an affiliate of INPEX Corporation) to acquire 10% participating interest in the Masela PSC Block located in Arafura Sea, Indonesia (subject to approval by the government). Masela Block PSC has an area of 3,221 km2 in a water depth ranging from 300-1,000 meters, and with initial estimated reserves of 13.65TCF, it has the second biggest new gas reserves in Indonesia after Tangguh’s Berau Block. The additional 227.5 mmboe of net reserves to ENRG will double the size of the current total estimated FY09 net 2P reserves of 224 mmboe, and offers a large supply to support future production in the block (around 50 years in our calculation if production rate stays constant).
To Add Significant Contributions
Having obtained the plan of development from the government, the Abadi field in Masela PSC is expected to produce 4.5 million tons per year (Mtpy) of LNG and 13,000 bopd of oil condensate starting 2016, using the Floating liquified Natural Gas (FLNG) technology. This will provide significant contributions to ENRG’s production by adding 474,500 barrels of net oil production or 14% to our FY16 net oil production forecast of 3.4mmbo. The 4.5 million tpa of LNG production translates to 630 mmcfd, adding 22,995mmcf of net gas production or 19% of our FY16 forecast of 120,428mmcf. There is potential for higher production ahead as the estimated field reserves facilitate production up to 9 Mtpy.
Price and Equity Funding is Key
While the acquisition cost is still undisclosed, if we assume ENRG pays $2/boe for its share of net reserves of 227.5 mmboe, the cost will reach $455mn. In this situation, we believe that equity funding is the only fitting solution to fund the acquisition since using more debt is unfeasible given ENRG’s low interest coverage of 0.06x by 1H09. ENRG is reportedly planning a rights issue of $500mn in this year, which will just be enough to pay for the estimated acquisition cost and leaving almost no room to restructure the debts that have been a burden to its earnings. Therefore, the price and success of the rights issue will determine ENRG’s future performance.
Valuation
In the absence of more information regarding the cost of the acquisition, the pricing of the LNG scheme and the rights issue arrangement, we have not factored in the 10% interest in Masela PSC. However, we view the acquisition positively given the size of the reserves and the large potential contributions. We currently rate ENRG with a BUY recommendation. Our TP of Rp520 represents 60% potential upside and implies 1.28x FY10F PBV and FY10F $7.11EV/mmboe (based on estimated 212mmboe net 2P reserves in FY10).
ENRG’s subsidiary, PT EMP Energi Indonesia, has signed an agreement with INPEX Masela, Ltd (an affiliate of INPEX Corporation) to acquire 10% participating interest in the Masela PSC Block located in Arafura Sea, Indonesia (subject to approval by the government). Masela Block PSC has an area of 3,221 km2 in a water depth ranging from 300-1,000 meters, and with initial estimated reserves of 13.65TCF, it has the second biggest new gas reserves in Indonesia after Tangguh’s Berau Block. The additional 227.5 mmboe of net reserves to ENRG will double the size of the current total estimated FY09 net 2P reserves of 224 mmboe, and offers a large supply to support future production in the block (around 50 years in our calculation if production rate stays constant).
To Add Significant Contributions
Having obtained the plan of development from the government, the Abadi field in Masela PSC is expected to produce 4.5 million tons per year (Mtpy) of LNG and 13,000 bopd of oil condensate starting 2016, using the Floating liquified Natural Gas (FLNG) technology. This will provide significant contributions to ENRG’s production by adding 474,500 barrels of net oil production or 14% to our FY16 net oil production forecast of 3.4mmbo. The 4.5 million tpa of LNG production translates to 630 mmcfd, adding 22,995mmcf of net gas production or 19% of our FY16 forecast of 120,428mmcf. There is potential for higher production ahead as the estimated field reserves facilitate production up to 9 Mtpy.
Price and Equity Funding is Key
While the acquisition cost is still undisclosed, if we assume ENRG pays $2/boe for its share of net reserves of 227.5 mmboe, the cost will reach $455mn. In this situation, we believe that equity funding is the only fitting solution to fund the acquisition since using more debt is unfeasible given ENRG’s low interest coverage of 0.06x by 1H09. ENRG is reportedly planning a rights issue of $500mn in this year, which will just be enough to pay for the estimated acquisition cost and leaving almost no room to restructure the debts that have been a burden to its earnings. Therefore, the price and success of the rights issue will determine ENRG’s future performance.
Valuation
In the absence of more information regarding the cost of the acquisition, the pricing of the LNG scheme and the rights issue arrangement, we have not factored in the 10% interest in Masela PSC. However, we view the acquisition positively given the size of the reserves and the large potential contributions. We currently rate ENRG with a BUY recommendation. Our TP of Rp520 represents 60% potential upside and implies 1.28x FY10F PBV and FY10F $7.11EV/mmboe (based on estimated 212mmboe net 2P reserves in FY10).
Indopremier WIKA - BUY TP Rp 430 Better Margin on Efficiency
9M09 figure shows that efficiency does sure lift up margin across the board which translate into more safety bet against unfavorable industry this year. Given better outlook ahead, bottom line should run faster. Other positive factor is unlike its closest competitor, WIKA relatively has less dispute project. BUY
Net Profit Up 56% amidst New Final Tax Rate
WIKA reported its 9M09 net profit surged 56% YoY to Rp133 billion but quarterly plunged by 17.2% due to seasonal demand. The figure inline fueling 78% of our estimate Rp170 billion. Net profit was lifted up by lower cost amidst zero growth in upper line at Rp4.5 trillion or equivalent with 30% project completion of WIKA outstanding order book 9M09 Rp15.2 trillion. Cost of construction tamped down by 4% YoY and 9% QoQ to Rp4.1 trillion blessed from stable material price and efficiency program across all divisions.
Sparking Revenue in Upcoming Quarter
Total new contract in 9M09 reached Rp7.16 trillion or 78% from our full year estimate at Rp9.1 trillion vs company’s target Rp9.3 trillion. We maintain our conservative picture since we do not see much change in realization of government infrastructure budget which only reached 40%. However we are optimist WIKA could meet our target in this full year-09 as the government usually tends to speed up budget spending in the last quarter hence sparking revenue in the last quarter is highly probable.
Possible Bond Issuance in 2010
The company cancelled the plan to acquire small mining contractor as new mining contractor law No. 25/2009 outlined only contractor with mining business license can undertake mining, processing and purification activities. As a consequence, WIKA will need bigger cash in their pocket to acquire mining contractor with mining business licenses. The company hinted source of financing whether coming from bond issuance or IPO of one of its subsidiary. We think the first option is more sense to take as the second option is more costly.
Valuation and Recommendation
We maintain our BUY call with unchanged TP Rp430 as we already use FY10F as present value in our DCF valuation. Our intrinsic value provides 37% potential upside compared to current price. Recent dip in the stock prices gives good entry point. Our TP implying 8.4x PE and 1.1x PBV FY10F, each is equivalent with -1 standard deviation on historical PE and PBV. BUY.
Net Profit Up 56% amidst New Final Tax Rate
WIKA reported its 9M09 net profit surged 56% YoY to Rp133 billion but quarterly plunged by 17.2% due to seasonal demand. The figure inline fueling 78% of our estimate Rp170 billion. Net profit was lifted up by lower cost amidst zero growth in upper line at Rp4.5 trillion or equivalent with 30% project completion of WIKA outstanding order book 9M09 Rp15.2 trillion. Cost of construction tamped down by 4% YoY and 9% QoQ to Rp4.1 trillion blessed from stable material price and efficiency program across all divisions.
Sparking Revenue in Upcoming Quarter
Total new contract in 9M09 reached Rp7.16 trillion or 78% from our full year estimate at Rp9.1 trillion vs company’s target Rp9.3 trillion. We maintain our conservative picture since we do not see much change in realization of government infrastructure budget which only reached 40%. However we are optimist WIKA could meet our target in this full year-09 as the government usually tends to speed up budget spending in the last quarter hence sparking revenue in the last quarter is highly probable.
Possible Bond Issuance in 2010
The company cancelled the plan to acquire small mining contractor as new mining contractor law No. 25/2009 outlined only contractor with mining business license can undertake mining, processing and purification activities. As a consequence, WIKA will need bigger cash in their pocket to acquire mining contractor with mining business licenses. The company hinted source of financing whether coming from bond issuance or IPO of one of its subsidiary. We think the first option is more sense to take as the second option is more costly.
Valuation and Recommendation
We maintain our BUY call with unchanged TP Rp430 as we already use FY10F as present value in our DCF valuation. Our intrinsic value provides 37% potential upside compared to current price. Recent dip in the stock prices gives good entry point. Our TP implying 8.4x PE and 1.1x PBV FY10F, each is equivalent with -1 standard deviation on historical PE and PBV. BUY.
CIMB Ramayana Lestari Result note - Strong cost control
(RALS IJ / RALS.JK, OUTPERFORM - Maintained, Rp570 - Tgt. Rp820, Consumer)
Maintain Outperform on Ramayana. 9M09 results are generally in line. In fact, if Ramayana can maintain its operating expense ratio at 3Q09 levels and if its gross margins do not weaken significantly in 4Q09, this set of results can be said to be 8-10% ahead of our expectations and consensus. In our forecasts, we are assuming that opex could remain under duress from higher promotion expenses in 4Q09, given still-volatile sales. This is the main reason we are maintaining our estimates. But as we roll forward to CY10, our target price rises to Rp820 from Rp750, still DCF-derived but with a lower WACC assumption of 14.3% from 15% on a lower beta, implying 12x and 9x CY10-11 earnings. Key catalysts are expected to be a sales rebound, which should occur by 1H10, as indicated by the strong uptick in the CCI and more robust commodity prices, of CPO in particular.
Maintain Outperform on Ramayana. 9M09 results are generally in line. In fact, if Ramayana can maintain its operating expense ratio at 3Q09 levels and if its gross margins do not weaken significantly in 4Q09, this set of results can be said to be 8-10% ahead of our expectations and consensus. In our forecasts, we are assuming that opex could remain under duress from higher promotion expenses in 4Q09, given still-volatile sales. This is the main reason we are maintaining our estimates. But as we roll forward to CY10, our target price rises to Rp820 from Rp750, still DCF-derived but with a lower WACC assumption of 14.3% from 15% on a lower beta, implying 12x and 9x CY10-11 earnings. Key catalysts are expected to be a sales rebound, which should occur by 1H10, as indicated by the strong uptick in the CCI and more robust commodity prices, of CPO in particular.
Mandiri Sekuritas AALI: Proven productivity
Astra Agro Lestari (AALI)’s 9M09 CPO production was up by 6.9% yoy to 786k tons due to significantly higher FFB production in Kalimantan and Sulawesi. As a result, though CPO selling price was slightly lower in 3Q09, total sales jumped by 56.6% qoq. In total, 9M09 revenue reached Rp5.5tn (-18.4% yoy), while earnings hit Rp1.2tn (-41.4% yoy). We are upgrading our forecast and TP of Rp22,000/share, factoring higher CPO production as we believe the company could optimize its productivity moving f! orward. T hough we like AALI’s fundamentals, we view the upside is limited since the stock currently is trading at demanding valuations (PER09F-10F of 18.1x-16.0x). Thus, we maintain our neutral stance on the stock.
9M09’s earnings: in line with ours, but slightly below consensus. AALI reported 9M09 revenue of Rp5.5tn (-18.4% yoy) along with lower average CPO selling price (Rp6,336/kg in 9M09 vs Rp7,995/kg in 9M08). At the bottom-line level, AALI posted larger drop of around 41.4% to Rp1.2tn. The results represented around 71.2% of our and 66.2% of market consensus forecasts. Note that AALI booked Rp86bn of forex losses in 9M09 as around 80% of its cash and cash equivalent were denominated in the US$. Therefore, since we are a believer of the rupiah appreciation, we foresee some forex losses of Rp78bn and Rp16bn for FY09F and FY10F.
CPO production up by 6.9% yoy. AALI could still increase its CPO production to 786k tons in 9M09 (+6.9%yoy) despite its maturing plantation profile (average age of 14 years). This is due to substantial higher FFB production in Kalimantan and Sulawesi, which grew by 24.1% and 7.2% respectively. As of 9M09, FFB production in Kalimantan and Sulawesi has already represented around 55% of total FFB production. These areas would be the keys for production growth in the future, in our view , due to the maturing plantation profile.
Upgrading our CPO production and earnings estimates. Given the substantially higher CPO production in 3Q09, we upgraded our CPO production assumption to 1,026k and 1,075k tons in FY09F-10F. We view this as achievable as harvest will likely to improve in the 4Q09 with assumption of minimum El Nino risk. Moreover, with the upcoming 3 new mills in Kalimantan and Sulawesi, AALI could optimize its CPO production while the plantation enters the peak cro! ps. Conse quently, our earnings estimates would also positively change by 3.3% and 2.2% to Rp1.8tn and Rp2.1tn in FY09F-10F, respectively.
Maintain our stance with higher TP of Rp22,000/share. We upgraded our target price to Rp22,000/share (DCF based, 13.2% WACC and 5.0% TG), factoring higher CPO production assumptions. Though we like the company’s fundamentals, we view the upside is limited as the stock already trades at pricey valuation (PER09F-10F of 18.1x-16.0x). Thus, our neutral recommendation for the stock.
9M09’s earnings: in line with ours, but slightly below consensus. AALI reported 9M09 revenue of Rp5.5tn (-18.4% yoy) along with lower average CPO selling price (Rp6,336/kg in 9M09 vs Rp7,995/kg in 9M08). At the bottom-line level, AALI posted larger drop of around 41.4% to Rp1.2tn. The results represented around 71.2% of our and 66.2% of market consensus forecasts. Note that AALI booked Rp86bn of forex losses in 9M09 as around 80% of its cash and cash equivalent were denominated in the US$. Therefore, since we are a believer of the rupiah appreciation, we foresee some forex losses of Rp78bn and Rp16bn for FY09F and FY10F.
CPO production up by 6.9% yoy. AALI could still increase its CPO production to 786k tons in 9M09 (+6.9%yoy) despite its maturing plantation profile (average age of 14 years). This is due to substantial higher FFB production in Kalimantan and Sulawesi, which grew by 24.1% and 7.2% respectively. As of 9M09, FFB production in Kalimantan and Sulawesi has already represented around 55% of total FFB production. These areas would be the keys for production growth in the future, in our view , due to the maturing plantation profile.
Upgrading our CPO production and earnings estimates. Given the substantially higher CPO production in 3Q09, we upgraded our CPO production assumption to 1,026k and 1,075k tons in FY09F-10F. We view this as achievable as harvest will likely to improve in the 4Q09 with assumption of minimum El Nino risk. Moreover, with the upcoming 3 new mills in Kalimantan and Sulawesi, AALI could optimize its CPO production while the plantation enters the peak cro! ps. Conse quently, our earnings estimates would also positively change by 3.3% and 2.2% to Rp1.8tn and Rp2.1tn in FY09F-10F, respectively.
Maintain our stance with higher TP of Rp22,000/share. We upgraded our target price to Rp22,000/share (DCF based, 13.2% WACC and 5.0% TG), factoring higher CPO production assumptions. Though we like the company’s fundamentals, we view the upside is limited as the stock already trades at pricey valuation (PER09F-10F of 18.1x-16.0x). Thus, our neutral recommendation for the stock.
Danareksa International Nickel Indonesia Better Profitability
Headlines:
Helped by higher nickel-in-matte volume sales (up 7% QoQ to 18,653 tons in 3Q09) and an increase in ASP (up 51% QoQ to US$13,394/Mton in 3Q09), INCO’s revenues jumped 61% QoQ to US$250mn.
Gross profits per ton soared 269% QoQ to US$6,229 in 3Q09. As for the gross profit margin, it bounced back to 46.5% in 3Q09 from only 19% in the previous quarter thanks to both higher ASP and a lower COGS.
The net profit margin rose to 30.4% in 3Q09 from 11.2% in 2Q09. In 9M09, the net income reached US$110 mn or 72% of our full year forecast.
Comment:
INCO’s sales of nickel-in-matte have been steadily increasing since 1Q09 despite the weak nickel market, and the 9M09 sales of 50,687 Mtons (82% of our full year forecast) are slightly beyond our expectations. Hence, we remain confident that our FY09 sales forecast of 61,600 Mtons will be met despite the expected seasonal decline in sales which normally occurs in the fourth quarter of the year.
The company’s decision to restart some of its fossil-fuel power generators in 3Q09 has resulted in greater fuel consumption and consequently higher fuel costs (US$43mn in 3Q09 vs. US$34mn in 2Q09). However, we don’t believe this will jeopardize INCO’s profitability because the amount of fuel consumed was still lower than the amount consumed last year. Additionally, INCO’s average fuel cost in 3Q09 was only 59% of what it was in 3Q08 (US$61/barrel vs. US$104/barrel). This helped lift gross margins to 46.5% in 3Q09 from 21.9% in 3Q08.
The purchasing managers indices (PMI) of all major manufacturing countries were above 50 in October 2009, indicating the expansion of manufacturing activities worldwide. We are therefore convinced that demand for nickel will continue to grow. Underpinning our BUY call on INCO are the following:
INCO, by having restarted its fossil-fuel power generators, will be able to take advantage of higher nickel demand.
The amount of fuel consumed by INCO in 9M09 (and its associated cost) is still below our assumptions. Our COGS assumption for FY09 of US$7,666/Mton is therefore well within reach.
Despite the rising nickel inventory at the London Metal Exchange, market expectations of higher nickel demand in 2010 have so far kept the nickel price in the range ofUS$17,000-19,000/ton. We believe such prices are sustainable until the end of the year at least.
An increase in INCO’s COGS caused by higher fuel costs will be offset by higher ASP. Hence, our gross margin forecast of 30.9% for FY09 remains intact.
INCO’s shares now trade at a PE 10F/11F of 8.8x/9.7x, with 27% potential upside to our TP of Rp5,000.
Helped by higher nickel-in-matte volume sales (up 7% QoQ to 18,653 tons in 3Q09) and an increase in ASP (up 51% QoQ to US$13,394/Mton in 3Q09), INCO’s revenues jumped 61% QoQ to US$250mn.
Gross profits per ton soared 269% QoQ to US$6,229 in 3Q09. As for the gross profit margin, it bounced back to 46.5% in 3Q09 from only 19% in the previous quarter thanks to both higher ASP and a lower COGS.
The net profit margin rose to 30.4% in 3Q09 from 11.2% in 2Q09. In 9M09, the net income reached US$110 mn or 72% of our full year forecast.
Comment:
INCO’s sales of nickel-in-matte have been steadily increasing since 1Q09 despite the weak nickel market, and the 9M09 sales of 50,687 Mtons (82% of our full year forecast) are slightly beyond our expectations. Hence, we remain confident that our FY09 sales forecast of 61,600 Mtons will be met despite the expected seasonal decline in sales which normally occurs in the fourth quarter of the year.
The company’s decision to restart some of its fossil-fuel power generators in 3Q09 has resulted in greater fuel consumption and consequently higher fuel costs (US$43mn in 3Q09 vs. US$34mn in 2Q09). However, we don’t believe this will jeopardize INCO’s profitability because the amount of fuel consumed was still lower than the amount consumed last year. Additionally, INCO’s average fuel cost in 3Q09 was only 59% of what it was in 3Q08 (US$61/barrel vs. US$104/barrel). This helped lift gross margins to 46.5% in 3Q09 from 21.9% in 3Q08.
The purchasing managers indices (PMI) of all major manufacturing countries were above 50 in October 2009, indicating the expansion of manufacturing activities worldwide. We are therefore convinced that demand for nickel will continue to grow. Underpinning our BUY call on INCO are the following:
INCO, by having restarted its fossil-fuel power generators, will be able to take advantage of higher nickel demand.
The amount of fuel consumed by INCO in 9M09 (and its associated cost) is still below our assumptions. Our COGS assumption for FY09 of US$7,666/Mton is therefore well within reach.
Despite the rising nickel inventory at the London Metal Exchange, market expectations of higher nickel demand in 2010 have so far kept the nickel price in the range ofUS$17,000-19,000/ton. We believe such prices are sustainable until the end of the year at least.
An increase in INCO’s COGS caused by higher fuel costs will be offset by higher ASP. Hence, our gross margin forecast of 30.9% for FY09 remains intact.
INCO’s shares now trade at a PE 10F/11F of 8.8x/9.7x, with 27% potential upside to our TP of Rp5,000.
Morgan Stanley - BBRI.JK, PT Bank Rakyat Indonesia (Rp6,950.00) /Stress Resistant; Raising PT
Morgan Stanley Asia (Singapore) Pte.
Roger.Lum@morganstanley.com, Samantha.Horton
Maintain Overweight; Lift price target to Rp9,238: Our new price target implies 2010e 13x P/E and 3.4x P/B in 2010e. 3Q net profit (Rp1.8 tn) rose 27%YoY, while 9M09 net profit (Rp5.3 tn) was up up 24%, reaching 85% of our old FY09 forecast, despite record provisions (equivalent to 571bp of loans) in 3Q09.
NIM stable QoQ: After losing some 86bp in three consecutive quarters, NIM remained flat QoQ in 3Q. While it is too early to declare that NIM has bottomed, we note that that there have been improvements in loan/ asset mix, and progressively higher LDR (87.6% now).
Compelling valuations: Despite rising 53% YTD, we think the stock remains attractive at 2.6x F10e BVPS, 9.9x F10e EPS with 19.7% EPS CAGR for 2008-11e and ROE of 27-28%. There is upside to our EPS potentially from lower provisions, lower taxes, lower costs, higher fee growth, better NIM.
Roger.Lum@morganstanley.com, Samantha.Horton
Maintain Overweight; Lift price target to Rp9,238: Our new price target implies 2010e 13x P/E and 3.4x P/B in 2010e. 3Q net profit (Rp1.8 tn) rose 27%YoY, while 9M09 net profit (Rp5.3 tn) was up up 24%, reaching 85% of our old FY09 forecast, despite record provisions (equivalent to 571bp of loans) in 3Q09.
NIM stable QoQ: After losing some 86bp in three consecutive quarters, NIM remained flat QoQ in 3Q. While it is too early to declare that NIM has bottomed, we note that that there have been improvements in loan/ asset mix, and progressively higher LDR (87.6% now).
Compelling valuations: Despite rising 53% YTD, we think the stock remains attractive at 2.6x F10e BVPS, 9.9x F10e EPS with 19.7% EPS CAGR for 2008-11e and ROE of 27-28%. There is upside to our EPS potentially from lower provisions, lower taxes, lower costs, higher fee growth, better NIM.
DBS Bank Mandiri: Sub-debts issuance to support stronger loan growth (Buy, TP Rp6,000)
Bank Mandiri (BMRI) reportedly will offer rupiah sub-debts by the third week of this month. The total bond issue size will be c.Rp3tr, which can be increased to Rp5tr if there is strong demand from the market.
BMRI’s issue of sub-debts is driven by expected strong loan growth next year. The bank targets 20% loan growth, higher than our forecast of 12.5% y-o-y. The growth will be driven by all segments. Although the largest contributor should still be the corporate segment, other sectors such as consumer and micro should grow stronger next year. BMRI targets 30% from auto loan which will be driven by its auto financing subsidiary Mandiri Tunas Finance. Micro segment, although still small in terms of proportion to total loan (2.7%), is expected to grow by 20-30% next year.
At the same time, we believe this is the best time to issue sub-debts and other fixed income instruments as the BI rate is at a historic low of 6.5%. BMRI plans to issue foreign denominated bonds next year if the bond market for the said instruments improves.
We maintain our forecast at this moment and reiterate our Buy call on the stock with target price of Rp6.000 at 3.1x FY10 PBV.
BMRI’s issue of sub-debts is driven by expected strong loan growth next year. The bank targets 20% loan growth, higher than our forecast of 12.5% y-o-y. The growth will be driven by all segments. Although the largest contributor should still be the corporate segment, other sectors such as consumer and micro should grow stronger next year. BMRI targets 30% from auto loan which will be driven by its auto financing subsidiary Mandiri Tunas Finance. Micro segment, although still small in terms of proportion to total loan (2.7%), is expected to grow by 20-30% next year.
At the same time, we believe this is the best time to issue sub-debts and other fixed income instruments as the BI rate is at a historic low of 6.5%. BMRI plans to issue foreign denominated bonds next year if the bond market for the said instruments improves.
We maintain our forecast at this moment and reiterate our Buy call on the stock with target price of Rp6.000 at 3.1x FY10 PBV.
CLSA Gudang Garam (GGRM IJ), a conviction call, the cheapest consumer stock in Asia
Reiterating BUY, TP Rp22,350 based on 11.7x 2010 CL PER
Swati maintains her conviction BUY call on turnaround story GGRM. We upgrade earnings by 20-30% for 2009-2011.
In this report, Swati is focusing more on VALUATION: GGRM is the cheapest amongst the 71 consumer companies that CLSA covers in Asia. The stock is trading at 8x 2010 CL PE, compared to 17x average for consumer companies in Asia. In term of P/B, GGRM is trading at 1.42x 2010 P/B, much lower than local peers like UNVR (21x) and INDF (2.57x).
We believe that re-rating should occur for GGRM, for the following reasons:
1. Cigarettes have an inelastic demand and offer stable earnings and cash flow. Indonesia has a regulatory light environment which is why 78% smokers start smoking before age of 19.
2. GGRM’ balance sheet has de-leveraged and the company will be in net cash situation this year.
3. Turnaround story: please see the table below on excise duty stamp purchase. Margins are improving as GGRM shifted product mix in favour of higher margin handmade kreteks and implemented a more targeted marketing approach (interesting to note that 9M09 marketing expenses actually fell by 17% YoY).
4. A sharp change in direction of the top management. Not only is the distribution being managed in house by newly hired, very respected and experienced people from the industry, the company is also hiring brand managers, marketing planners and trainers for the first time.
Swati maintains her conviction BUY call on turnaround story GGRM. We upgrade earnings by 20-30% for 2009-2011.
In this report, Swati is focusing more on VALUATION: GGRM is the cheapest amongst the 71 consumer companies that CLSA covers in Asia. The stock is trading at 8x 2010 CL PE, compared to 17x average for consumer companies in Asia. In term of P/B, GGRM is trading at 1.42x 2010 P/B, much lower than local peers like UNVR (21x) and INDF (2.57x).
We believe that re-rating should occur for GGRM, for the following reasons:
1. Cigarettes have an inelastic demand and offer stable earnings and cash flow. Indonesia has a regulatory light environment which is why 78% smokers start smoking before age of 19.
2. GGRM’ balance sheet has de-leveraged and the company will be in net cash situation this year.
3. Turnaround story: please see the table below on excise duty stamp purchase. Margins are improving as GGRM shifted product mix in favour of higher margin handmade kreteks and implemented a more targeted marketing approach (interesting to note that 9M09 marketing expenses actually fell by 17% YoY).
4. A sharp change in direction of the top management. Not only is the distribution being managed in house by newly hired, very respected and experienced people from the industry, the company is also hiring brand managers, marketing planners and trainers for the first time.
UBS Investment Research Energi Mega Persada - Back to acquisition mode (TP unchanged at Rp 200/sh, SELL rating maintained)
Company announced plan to buy 10% of Masela PSC Energi Mega Persada has sign an agreement with Inpex Japan to purchase a 10% working interest in the Masela PSC (Production Sharing Contract), conditional upon BP Migas (oil and gas upstream agency) approval. According to a Reuters article on 3 Jul09, Masela PSC is estimated to contain more than 10tcf (1.7bn barrels of oil equivalent) of gas resources. Inpex has not yet announced any plan to divest the remaining 90% it currently holds.
Potentially adds 18% to net 2P reserves if everything goes well Assuming 12 years of 4.5m tons of LNG sales per annum starting in 2016 (PSC expires in 2028), the total 2P reserves that can be booked after LNG sales agreement is sales will be 2.6tcf. Given EMP’s 10% interest, this would translate to 260bcf (43m of barrels of oil equivalent), or 12% of EMP’s current gross 2P reserves and 18% of EMP’s current net 2P reserves.
Could there be more acquisitions? EMP has a history of expanding its reserves through acquisitions, but has not announced any deal since a US$12m controlling stake in Tonga PSC in April 2008. Given improving global credit availability and better equity market conditions, we believe EMP is likely to further expand its asset portfolio.
Valuation: DCF-based price target of Rp200 Our price target is based on a WACC assumption of 15.7% with delineated cash flow forecasts until the end of reserve life.
Potentially adds 18% to net 2P reserves if everything goes well Assuming 12 years of 4.5m tons of LNG sales per annum starting in 2016 (PSC expires in 2028), the total 2P reserves that can be booked after LNG sales agreement is sales will be 2.6tcf. Given EMP’s 10% interest, this would translate to 260bcf (43m of barrels of oil equivalent), or 12% of EMP’s current gross 2P reserves and 18% of EMP’s current net 2P reserves.
Could there be more acquisitions? EMP has a history of expanding its reserves through acquisitions, but has not announced any deal since a US$12m controlling stake in Tonga PSC in April 2008. Given improving global credit availability and better equity market conditions, we believe EMP is likely to further expand its asset portfolio.
Valuation: DCF-based price target of Rp200 Our price target is based on a WACC assumption of 15.7% with delineated cash flow forecasts until the end of reserve life.
Mandiri Sekuritas Mayora Indah: 9M09 earnings of Rp268bn (+92.0% yoy), above ours and consensus expectations (MYOR, Rp3,425, Under review)
Mayora booked incredible earnings growth of 92.0% yoy and 90.4% qoq to Rp268bn in 9M09. Top-line is slightly above ours and consensus estimates, whereas bottom-line is significantly above our and consensus estimates. The robust growth in 9M09 earnings was fueled by 154.7% growth in EBIT’s confectionary products. Therefore, we share management view that MYOR could reach Rp4.7tn sales in FY09F (+20% yoy) with gross margin stand at around 23%.
Since the operation of company’s new factory has started in Aug09, we believe they could 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 9.8x.
Since the operation of company’s new factory has started in Aug09, we believe they could 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 9.8x.
Mandiri Sekuritas Budi Acid Jaya: 9M09 results are above ours estimates, but inline with consensus (BUDI, Rp225, Buy, TP: Rp280)
BUDI’s 9M09 net income was above our estimates (88.6% of our FY09F), but inline with consensus (77.5% of FY09F consensus).
Company’s net income increased by 54.8%yoy, but declined by 74.1%qoq. However, this qoq decline was purely due to lower forex gain. Note that operating income was slightly improved qoq.
Revenue increased by 21.6%qoq which was mainly triggered by tapioca sales that grew by 25.9% due to Lebaran sales.
We still maintain our Buy recommendation on BUDI which is currently trading at PER09-10F of 6.8x-7.8x.
Company’s net income increased by 54.8%yoy, but declined by 74.1%qoq. However, this qoq decline was purely due to lower forex gain. Note that operating income was slightly improved qoq.
Revenue increased by 21.6%qoq which was mainly triggered by tapioca sales that grew by 25.9% due to Lebaran sales.
We still maintain our Buy recommendation on BUDI which is currently trading at PER09-10F of 6.8x-7.8x.
Mandiri Sekuritas Auto Sector: October 4-wheeler sales at 50k, highest so far this year
Based on initial Gaikindo data, , 4-wheeler domestic wholesale unit sales in Oct09 was about 50k (+34%mom,-9%yoy), the highest monthly recorded sales so far in 2009. This brings cumulative 10M09 total domestic sales to 387k (-26%yoy), our about 86% of our FY09F target, thus running ahead of our year-end expectations of 450k units (-25%yoy). The strengthening rupiah and friendlier financing schemes (ie lower down payment and lower car loan rates) largely attributed to the spike in units sales. Should this trend continue until year end, we expect an upwards revision of our FY09F domestic unit sales forecast by at least 6% to 480k units (-21%yoy).
Kamis, 05 November 2009
Miling List - STOP
Guys, mohon maaf bagi rekan-rekan yang sudah ikut miling list bright info untuk sementara miling list dihentikan dikarenakan email saya terkena spam/virus.
Terima Kasih atas partisipasinya.
Bright Info
juntri
Terima Kasih atas partisipasinya.
Bright Info
juntri
Bloomberg Oil Rises Above $80 After Unexpected Decline in U.S. Supplies
Nov. 4 (Bloomberg) -- Crude oil closed above $80 a barrel after a government report showed that U.S. inventories unexpectedly dropped as imports declined to a two-month low. Stockpiles of crude fell 3.94 million barrels to 335.9 million last week, the Energy Department said today. A 1.5 million-barrel increase was forecast, according to the median of responses in a Bloomberg News survey of analysts. Oil also advanced as equities gained and a weaker U.S. dollar bolstered the appeal of commodities as an alternative investment.
“The inventory report today was definitely supportive,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “Prices were already up because of the weak dollar and rising stocks. These numbers just added to the upward momentum.”
Crude oil for December delivery rose 80 cents, or 1 percent, to settle at $80.40 a barrel at 3:04 p.m. on the New York Mercantile Exchange. It was the highest close since Oct. 23. Prices are up 80 percent this year.
“It is very hard to justify oil going from $30 to above $80 based only on the fundamentals of supply and demand,” Nouriel Roubini, the economist who predicted the global economic crisis, said today at the Inside Commodities Conference in New York. Oil touched $32.40 in December.
Roubini and Stephen Schork, president of consultant Schork Group Inc. of Villanova, Pennsylvania, both told the conference prices are in a bubble. more...
Reuters Wall Street rally fades late after Fed; Cisco up late
NEW YORK (Reuters) - U.S. stocks rallied but lost steamon Wednesday after the Federal Reserve said it would keep rates near zero for "an extended period" even as it expressed confidence in the economic recovery.
Stocks pushed higher in the hour following the FOMC statement, after the Fed kept its benchmark federal funds rate unchanged in a range of zero to 0.25 percent. For details, see [ID:nN04453484] The S&P 500 rose as high as 1,061.00 and the Nasdaq touched 2,081.00.
But the market was unable to hold those gains as it succumbed to selling pressure in the last half-hour of trading.
"This doesn't change much. It's hard to figure out how this could be helpful for the upside, though it easily could have been negative," said Jordan Posner, portfolio manager at Matrix Asset Advisors in New York.
"The good news is more an absence of anything bad."
The Fed's closely watched policy statement was somewhat more upbeat than its statement in September. However, it was also more explicit about why it expects to keep rates low, citing "low rates of resource utilization, subdued inflation trends, and stable inflation expectations." more...
Bloomberg Fed Pledges to Keep Rates Low for ‘Extended Period’
Nov. 4 (Bloomberg) -- The Federal Reserve repeated it will keep interest rates near zero for “an extended period” and specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline. “Businesses are still cutting back on fixed investment and staffing, though at a slower pace,” the Federal Open Market Committee said in a statement today. “Household spending appears to be expanding, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit,” the FOMC said after meeting in Washington.
Chairman Ben S. Bernanke is trying to determine when the recovery is strong enough to withdraw the $1 trillion the Fed injected to avert a depression. The dollar declined as the Fed’s statement, which followed a report last week showing the economy expanded last quarter for the first time in more than a year, signaled growth alone won’t be enough to warrant tighter policy.
Officials kept their benchmark overnight lending rate at between zero and 0.25 percent, where it has been since December. The conditions they cited to keep it there are “low rates of resource utilization, subdued inflation trends, and stable inflation expectations.”
“What they’re saying is the economy is improving, but it’s still entirely dependent on stimulus,” said Chris Low, chief economist at FTN Financial in New York, who doesn’t expect an interest-rate increase until next September. Fed officials are signaling that “The test for when rates have to go up, or stimulus has to be removed, ought to be inflation.”
Dollar Slides
The dollar slid as much as 1.2 percent, the biggest intraday decline since Sept. 8, before trading at $1.4876 per euro at 4:09 p.m. in New York, compared with $1.4724 yesterday. The Standard & Poor’s 500 Index was up 0.1 percent at 1,046.50 after rising as much as 1.5 percent. more...
Palmoil HQ Crude palm oil futures rise sharply on crude, Palm oil industry update
Crude Palm Oil (CPO) Futures Market
The benchmark January crude palm oil futures contract closed on Bursa Malaysia Derivatives (BMD) at RM2,260 a metric ton, up MYR70 or 3.2%, after trading in the range of MYR2,207- MYR2,273/ton.
CPO prices rose sharply after crude oil prices broke the $80 a barrel resistance to close at $80.32 a barrel.
Cash palm olein for January/February/March was traded at $687.50/ton. Cash CPO for prompt shipment was offered MYR80 higher at MYR2,240/ton.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Nov 09 2,200 2,110 Up 90 2,215 2,150
Dec 09 2,232 2,167 Up 65 2,243 2,175
Jan 10 2,260 2,190 Up 70 2,273 2,207
Feb 10 2,280 2,210 Up 70 2,295 2,232
The benchmark January crude palm oil futures contract closed on Bursa Malaysia Derivatives (BMD) at RM2,260 a metric ton, up MYR70 or 3.2%, after trading in the range of MYR2,207- MYR2,273/ton.
CPO prices rose sharply after crude oil prices broke the $80 a barrel resistance to close at $80.32 a barrel.
Cash palm olein for January/February/March was traded at $687.50/ton. Cash CPO for prompt shipment was offered MYR80 higher at MYR2,240/ton.
Closing BMD Crude Palm Oil (CPO) futures prices in MYR/ton at 1000 GMT:
Month Close Previous Change High Low
Nov 09 2,200 2,110 Up 90 2,215 2,150
Dec 09 2,232 2,167 Up 65 2,243 2,175
Jan 10 2,260 2,190 Up 70 2,273 2,207
Feb 10 2,280 2,210 Up 70 2,295 2,232
Mandiri Sekuritas LTLS: Attractive bargain
Attractive bargain
LTLS recorded operating performance impovement with sales and operating profit increasing by 0.3% and 349.5%qoq. Despite a stronger Rupiah, gross margin kept increasing from 10.9% to 13.1% (normally it went down) showing the company’s stronger price setting power. However, net income fell by 55.8%qoq due to lower forex gain. The company’s products encompass most products in the manufacturing sector, it can serve as a proxy to economic growth. Therefore, we still believe in company’s prospect as we forecast higher 2010F GDP growth of 5.2% (vs 4.3% in 2009F). We still maintain our Buy recommendation as the stock is trading at a very cheap PER09-10F of 7.1-5.1x and PBV09-10F of 0.7-0.6x. At our TP of Rp1,000/share, the stock has 35.1% upside potential.
Better operating results, but lower forex gain. Lautan Luas posted improved 3Q09 operating performance with sales increasing by 0.3%qoq and operating profit increasing by 349.5%qoq after it recorded operating loss of Rp2.1bn in 2Q09. However, 9M09 net income was only Rp61.3bn, or equal to 45.3% of our previous estimates. This was due to -55.8%qoq net income decline in 3Q09. Deteriorating bottom line, despite better opera! ting resu lts, was mainly due to lower forex gain (Rp33.6bn in 3Q09 vs Rp76.9bn in 2Q09) as IDR only strengthed by 5.3% in 3Q09 vs 12.8% in 2Q09. 82.3% of company’s revenues came from domestic sales, therefore, we are still positive toward the company prospects as our economist views that GDP will grow by 5.2% in 2010F.
Stronger price setting power. As inventories are recorded in IDR using US$/Rp rate when it was bought/produced, and there is time lag till sales are recognized using US$/Rp rate at sales date, gross margin was normally squeezed when IDR strengthened, like what happened in 2Q09 when IDR strengthened by 12.8% and gross margin squeezed from 19.5% to 10.9%. However, it was not ! the case in 3Q09 when IDR strengthend by 5.3% and gross margin kept growing from 10.9% to 13.1%. This was due to company’s ability to maintain its margin by adjusting selling price, taking advantage of its strong position in the industry.
Attractive valuation. Our DCF valuation with WACC of 11.55% (9.5% risk- free rate, 5.0% risk premium, and 3.0% TG rate) results in a TP of Rp1,000/share. Besides that, relative valuation methods with PER09-10F of 7.1x-5.1x (JCI: 15.3x-13.8x), and PBV09-10F of 0.7x-0.6x (JCI: 2.9x-2.6x), support our belief that the stock is at bargain pr! ice.
LTLS recorded operating performance impovement with sales and operating profit increasing by 0.3% and 349.5%qoq. Despite a stronger Rupiah, gross margin kept increasing from 10.9% to 13.1% (normally it went down) showing the company’s stronger price setting power. However, net income fell by 55.8%qoq due to lower forex gain. The company’s products encompass most products in the manufacturing sector, it can serve as a proxy to economic growth. Therefore, we still believe in company’s prospect as we forecast higher 2010F GDP growth of 5.2% (vs 4.3% in 2009F). We still maintain our Buy recommendation as the stock is trading at a very cheap PER09-10F of 7.1-5.1x and PBV09-10F of 0.7-0.6x. At our TP of Rp1,000/share, the stock has 35.1% upside potential.
Better operating results, but lower forex gain. Lautan Luas posted improved 3Q09 operating performance with sales increasing by 0.3%qoq and operating profit increasing by 349.5%qoq after it recorded operating loss of Rp2.1bn in 2Q09. However, 9M09 net income was only Rp61.3bn, or equal to 45.3% of our previous estimates. This was due to -55.8%qoq net income decline in 3Q09. Deteriorating bottom line, despite better opera! ting resu lts, was mainly due to lower forex gain (Rp33.6bn in 3Q09 vs Rp76.9bn in 2Q09) as IDR only strengthed by 5.3% in 3Q09 vs 12.8% in 2Q09. 82.3% of company’s revenues came from domestic sales, therefore, we are still positive toward the company prospects as our economist views that GDP will grow by 5.2% in 2010F.
Stronger price setting power. As inventories are recorded in IDR using US$/Rp rate when it was bought/produced, and there is time lag till sales are recognized using US$/Rp rate at sales date, gross margin was normally squeezed when IDR strengthened, like what happened in 2Q09 when IDR strengthened by 12.8% and gross margin squeezed from 19.5% to 10.9%. However, it was not ! the case in 3Q09 when IDR strengthend by 5.3% and gross margin kept growing from 10.9% to 13.1%. This was due to company’s ability to maintain its margin by adjusting selling price, taking advantage of its strong position in the industry.
Attractive valuation. Our DCF valuation with WACC of 11.55% (9.5% risk- free rate, 5.0% risk premium, and 3.0% TG rate) results in a TP of Rp1,000/share. Besides that, relative valuation methods with PER09-10F of 7.1x-5.1x (JCI: 15.3x-13.8x), and PBV09-10F of 0.7x-0.6x (JCI: 2.9x-2.6x), support our belief that the stock is at bargain pr! ice.
Citigroup: Buy: A Simple Business Strategy JSMR (TP Rp2,003)
Jasa Marga (Persero) (JSMR.JK) Buy: A Simple Business Strategy
Raising our estimates and TP – We reiterate our Buy/Low Risk (1L) rating on Jasa Marga and raise our TP to Rp2,003/share (from Rp1,330/share), as we raise our earnings estimates. Our TP, which is still based on a two-stage DDM/PE model, equates to 12.9x PE10E, which is undemanding compared to an average of 13.9x for regional peers.
Defensive, predictable earnings – Our net profit estimates are raised by 47% for this year and 12% for next year; for FY09E, the company has posted a Rp125bn one-time gain from its investment in JORR W1 section. Our new estimates also factor in higher tariffs next year (we see an average increase of 12%) and a 5% rise in traffic volume. The limited availability of alternative roads should mean traffic levels continue to rise, despite a hike in tariffs.
What’s next? – With its current assets portfolio relatively balanced, cash flow from Jasa Marga’s mature roads will fund/finance the new toll roads. While progress has been slow due to land acquisition, the company is constructing 13.6km in two projects, and will commence operation on one new one (3.6km) this month. No refinancing is needed until 2011, and Rp2.5trn in IPO funds remains unused. 10E debt/equity stands at 0.8x.
Risks – (1) Change in GoI regulatory framework, i.e, on tariffs, land acquisitions; (2) Completion of ongoing projects; (3) Rising interest rates; and (4) Macro and political conditions.
Raising our estimates and TP – We reiterate our Buy/Low Risk (1L) rating on Jasa Marga and raise our TP to Rp2,003/share (from Rp1,330/share), as we raise our earnings estimates. Our TP, which is still based on a two-stage DDM/PE model, equates to 12.9x PE10E, which is undemanding compared to an average of 13.9x for regional peers.
Defensive, predictable earnings – Our net profit estimates are raised by 47% for this year and 12% for next year; for FY09E, the company has posted a Rp125bn one-time gain from its investment in JORR W1 section. Our new estimates also factor in higher tariffs next year (we see an average increase of 12%) and a 5% rise in traffic volume. The limited availability of alternative roads should mean traffic levels continue to rise, despite a hike in tariffs.
What’s next? – With its current assets portfolio relatively balanced, cash flow from Jasa Marga’s mature roads will fund/finance the new toll roads. While progress has been slow due to land acquisition, the company is constructing 13.6km in two projects, and will commence operation on one new one (3.6km) this month. No refinancing is needed until 2011, and Rp2.5trn in IPO funds remains unused. 10E debt/equity stands at 0.8x.
Risks – (1) Change in GoI regulatory framework, i.e, on tariffs, land acquisitions; (2) Completion of ongoing projects; (3) Rising interest rates; and (4) Macro and political conditions.
KimEng UNVR: Result in line with expectation, HOLD
Good 9M09 result
Unilever posted 9M09 net profit of Rp2,278b, up 11% YoY on the back of 15% revenue growth. Costs of goods sold were up 18% YoY while operating expenses increased 14% YoY as the company continued aggressive advertising and promotion. Operating margin came in at 48.6%. lower than 49.9% in 9M08. Net profit was supported by lower effective tax rate of 28.4% in 9M09 vs. 30.0% in 9M08. The result is in line with our expectation but above the consensus estimate. Revenue growth in 3Q09 came in at 10% YoY, almost all from volume.
On QoQ basis, revenue increased 2%. Costs of goods sold were only up by 1% QoQ thanks to the strong rupiah and softening commodity prices. As a result, gross margin improved 30bps to 49.7% in 3Q09 from 49.4% in 2Q09. What we liked from the 3Q09 result is that the company managed to record strong volume growth while lowering advertising & promotion expense a bit.
Outlook remains positive
We see revenue to remain strong in the future. There is slowdown from outer islands as commodity prices reversed their trends. However, demand from Java and Sumatra (two largest areas of revenue contributor) remained firm. On cost side, softening commodity prices and strong rupiah, expected to sustain in the coming quarters, are positive as they reduce cost pressure. The intensifying competition, we see, is still in normal level. Major competitors (P&G and Wings) still continued slashing prices and aggressive promotion. Hence, it is unlikely that Unilever will increase selling prices in two product categories, namely hair care and powder detergent. Price increase is still possible to take place, albeit remotely, in other product categories, probably in 2010.
An excellent company
Unilever is a solid company from all angles. Its products, ranging from margarine to haircare, command leading market share. The company has no debt, healthy cash flow. It pays hefty dividend. And it consistently generates high ROE (latest annualized ROE was 82%).
Revising target price but still a HOLD
Unilever share price has been down by 8% since our latest report in September 2009 and is now trading close to our previous target price of Rp10,450. Due to the strong volume growth and signs of lower A&P, we revised our forecast slightly. We also changed effective tax assumption to 28.4% from 28.6%. As a result of the above changes, we came up with the new target price of Rp11,000 The target price pegs the stock at 22x 2011F PER, 15x 2010F PBV and 3.7x 2011 P/sales. HOLD.
Unilever posted 9M09 net profit of Rp2,278b, up 11% YoY on the back of 15% revenue growth. Costs of goods sold were up 18% YoY while operating expenses increased 14% YoY as the company continued aggressive advertising and promotion. Operating margin came in at 48.6%. lower than 49.9% in 9M08. Net profit was supported by lower effective tax rate of 28.4% in 9M09 vs. 30.0% in 9M08. The result is in line with our expectation but above the consensus estimate. Revenue growth in 3Q09 came in at 10% YoY, almost all from volume.
On QoQ basis, revenue increased 2%. Costs of goods sold were only up by 1% QoQ thanks to the strong rupiah and softening commodity prices. As a result, gross margin improved 30bps to 49.7% in 3Q09 from 49.4% in 2Q09. What we liked from the 3Q09 result is that the company managed to record strong volume growth while lowering advertising & promotion expense a bit.
Outlook remains positive
We see revenue to remain strong in the future. There is slowdown from outer islands as commodity prices reversed their trends. However, demand from Java and Sumatra (two largest areas of revenue contributor) remained firm. On cost side, softening commodity prices and strong rupiah, expected to sustain in the coming quarters, are positive as they reduce cost pressure. The intensifying competition, we see, is still in normal level. Major competitors (P&G and Wings) still continued slashing prices and aggressive promotion. Hence, it is unlikely that Unilever will increase selling prices in two product categories, namely hair care and powder detergent. Price increase is still possible to take place, albeit remotely, in other product categories, probably in 2010.
An excellent company
Unilever is a solid company from all angles. Its products, ranging from margarine to haircare, command leading market share. The company has no debt, healthy cash flow. It pays hefty dividend. And it consistently generates high ROE (latest annualized ROE was 82%).
Revising target price but still a HOLD
Unilever share price has been down by 8% since our latest report in September 2009 and is now trading close to our previous target price of Rp10,450. Due to the strong volume growth and signs of lower A&P, we revised our forecast slightly. We also changed effective tax assumption to 28.4% from 28.6%. As a result of the above changes, we came up with the new target price of Rp11,000 The target price pegs the stock at 22x 2011F PER, 15x 2010F PBV and 3.7x 2011 P/sales. HOLD.
CIMB Ace Hardware Indonesia Result note - A matter of valuations
(ACES IJ / ACES.JK, UNDERPERFORM - Downgraded, Rp1,530 - Tgt. Rp1,520, Consumer)
We downgrade Ace to Underperform from Outperform. 9M09 reported core net profit was Rp102bn, up 15% yoy on 8% sales growth. This matches our estimate as we are expecting 4Q sales to be stronger on rebounding consumer demand. However, if the 4Q rebound does not take place, the results could be deemed to be below our estimate by over 7%. We downgrade Ace to Underperform but with a higher target price of Rp1,520 (from Rp1,190) as we roll over to CY10. Our target remains DCF-based with a lower WACC of 13.5% (from 15.9%), adjusting for a lower beta, and implies 15x and 13x CY10-11 earnings. While we like Ace's business model and above-average growth, we believe its share price has priced in most, if not all, of the good news. Further, we expect slowing growth as the base effect wears off. We would turn more bullish if Ace could speed up the development of stores which had been postponed by the global financial crisis. Or if it takes the M&A route to enlarge its sales and product offerings, such as by merging with its sister company which sells furniture.
We downgrade Ace to Underperform from Outperform. 9M09 reported core net profit was Rp102bn, up 15% yoy on 8% sales growth. This matches our estimate as we are expecting 4Q sales to be stronger on rebounding consumer demand. However, if the 4Q rebound does not take place, the results could be deemed to be below our estimate by over 7%. We downgrade Ace to Underperform but with a higher target price of Rp1,520 (from Rp1,190) as we roll over to CY10. Our target remains DCF-based with a lower WACC of 13.5% (from 15.9%), adjusting for a lower beta, and implies 15x and 13x CY10-11 earnings. While we like Ace's business model and above-average growth, we believe its share price has priced in most, if not all, of the good news. Further, we expect slowing growth as the base effect wears off. We would turn more bullish if Ace could speed up the development of stores which had been postponed by the global financial crisis. Or if it takes the M&A route to enlarge its sales and product offerings, such as by merging with its sister company which sells furniture.
DBS Sampoerna Agro: Strong yield recovery (Buy, TP Rp2,650)
Strong yield recovery
• 3Q09 result exceeded expectations, the strong performance driven by a surge in production
• Adjusted FY09F-10F EPS after imputing higher FFB yield and ASP, partly offset by lower new planting (FY09F), revised cost structure and resale of treasury shares
• Raised TP to Rp2,650, Buy call reiterated.
Strong 3Q09 result. 3Q09 net profit grew 33.6% q-o-q to Rp109.1b on the back of 55.0% q-o-q jump in revenue to Rp625.8b. 3Q09 revenue and net profit accounted for more than half of 9M09 result because a 62.7% q-o-q jump in CPO production more than offset the 13.6% q-o-q drop in ASP. Cumulative 9M09 net profit, however, still fell 48.9% y-o-y to Rp204.1b due to lower CPO prices, flat y-o-y production growth, and a drop in germinated seeds sales. Nevertheless, the group’s realised 9M09 ASP is 6.8% above our full year forecast.
Yield assumptions raised, reduced new planting. The q-o-q jump in CPO production exceeded our expectation because of strong yield recovery in Sumatra estates. Hence, we raised blended yield by 15% for FY09F and 5% for FY10F. We now expect FY09F CPO production to ease by only 5.3% y-o-y vis-à-vis 17.4% drop previously. We also cut FY09F new planting target by 2k ha to 3k ha as 9M09 new plantings was only c.2k ha. Our assumptions for FY10F and FY11F remain 10k ha p.a.
Aligning cost structure. We also exclude inventory differences from SGRO's cost structure due to difficulty in forecasting and to align our methodology regionally. This resulted in slightly higher costs, net of top-line revision.
Raised TP to Rp2,650, Buy. Our DCF-based TP is raised to Rp2,650, implying 12.5x FY10F PE. Our upgrades reflect higher FFB yields, higher ASP (ratio to spot adjusted upwards by 70-450 bps) and resale of 75.6m treasury shares. We continue to like the group’s growth volume prospects and reiterate our Buy call for the 16.5% upside potential.
• 3Q09 result exceeded expectations, the strong performance driven by a surge in production
• Adjusted FY09F-10F EPS after imputing higher FFB yield and ASP, partly offset by lower new planting (FY09F), revised cost structure and resale of treasury shares
• Raised TP to Rp2,650, Buy call reiterated.
Strong 3Q09 result. 3Q09 net profit grew 33.6% q-o-q to Rp109.1b on the back of 55.0% q-o-q jump in revenue to Rp625.8b. 3Q09 revenue and net profit accounted for more than half of 9M09 result because a 62.7% q-o-q jump in CPO production more than offset the 13.6% q-o-q drop in ASP. Cumulative 9M09 net profit, however, still fell 48.9% y-o-y to Rp204.1b due to lower CPO prices, flat y-o-y production growth, and a drop in germinated seeds sales. Nevertheless, the group’s realised 9M09 ASP is 6.8% above our full year forecast.
Yield assumptions raised, reduced new planting. The q-o-q jump in CPO production exceeded our expectation because of strong yield recovery in Sumatra estates. Hence, we raised blended yield by 15% for FY09F and 5% for FY10F. We now expect FY09F CPO production to ease by only 5.3% y-o-y vis-à-vis 17.4% drop previously. We also cut FY09F new planting target by 2k ha to 3k ha as 9M09 new plantings was only c.2k ha. Our assumptions for FY10F and FY11F remain 10k ha p.a.
Aligning cost structure. We also exclude inventory differences from SGRO's cost structure due to difficulty in forecasting and to align our methodology regionally. This resulted in slightly higher costs, net of top-line revision.
Raised TP to Rp2,650, Buy. Our DCF-based TP is raised to Rp2,650, implying 12.5x FY10F PE. Our upgrades reflect higher FFB yields, higher ASP (ratio to spot adjusted upwards by 70-450 bps) and resale of 75.6m treasury shares. We continue to like the group’s growth volume prospects and reiterate our Buy call for the 16.5% upside potential.
Mandiri Sekuritas Jasa Marga: 9M09 results inline with our estimates (JSMR, Rp1,760, Buy, TP:Rp2,100)
JSMR reported its 9M09 results. Revenues reached Rp2.6tn (+4.8%yoy), but operating profit fell by 0.2%yoy on higher opex, primarily higher road maintenance and general administration cost. Traffic grew by 3.7%yoy and by 1.4%qoq.
The results are inline with our and consensus estimates with operating profit forming 72.9% of our and 71.0% of consensus estimates
However, the company achieved 93.6% of our full year net profit (99.5% of consensus), this is because of
the one time extraordinary gain because of equity transaction of JORR W1 section. We maintain our Buy for JSMR at TP of Rp2,100/share. It implies PER09-10F of 18.2x and 10.6x respectively.
The results are inline with our and consensus estimates with operating profit forming 72.9% of our and 71.0% of consensus estimates
However, the company achieved 93.6% of our full year net profit (99.5% of consensus), this is because of
the one time extraordinary gain because of equity transaction of JORR W1 section. We maintain our Buy for JSMR at TP of Rp2,100/share. It implies PER09-10F of 18.2x and 10.6x respectively.
Mandiri Sekuritas United Tractors: key notes from analyst meeting (UNTR, Rp14,600 Buy, TP:Rp16,000)
Below are the main points arising from the yesterday’s analyst
meeting :
The company is undergoing due diligence on two green-field coal mines located in Central Kalimantan, nearby its Tuah Turangga Agung concession area. One of the mines has about 10-15mn of coal reserves.
TTA is set to undergo trial production this year in preparation for commercial production by 1Q10 of 500k to 1mn tons. Its higher grade coal of 6,300/kcal is to be sold to Japanese power plants via a Japanese trading firm. TTA optimum capacity is about 3mn/pa upon full development.
Proposed mining law; initial take= business as usual. UNTR elaborated a bit on the current regulatory developments relating to mining contractor business. 3 main points were discussed namely (a) scope of work of mining contractor to be limited to overburden removal and coal extraction; which the company believes has gray areas given a section of the law stated no restriction of such. (b) restriction of affiliated co’s to conduct business; which defines affiliate as having direct/immediate relationship in UNTR case, Pama is not directly related to TTA and (c) foreign participation; which would allow foreign mining contractors to enter the Indonesian market, should local players lack capacity and resources to serve demand, which currently is being dutifully met by local mining contractors. Likewise, given the 3 year transition period to get this law into full effect, anything can change within that period.
We maintain buy on UNTR, currently trading at PER09-10F of 14.7x and 12.8x, respectively.
meeting :
The company is undergoing due diligence on two green-field coal mines located in Central Kalimantan, nearby its Tuah Turangga Agung concession area. One of the mines has about 10-15mn of coal reserves.
TTA is set to undergo trial production this year in preparation for commercial production by 1Q10 of 500k to 1mn tons. Its higher grade coal of 6,300/kcal is to be sold to Japanese power plants via a Japanese trading firm. TTA optimum capacity is about 3mn/pa upon full development.
Proposed mining law; initial take= business as usual. UNTR elaborated a bit on the current regulatory developments relating to mining contractor business. 3 main points were discussed namely (a) scope of work of mining contractor to be limited to overburden removal and coal extraction; which the company believes has gray areas given a section of the law stated no restriction of such. (b) restriction of affiliated co’s to conduct business; which defines affiliate as having direct/immediate relationship in UNTR case, Pama is not directly related to TTA and (c) foreign participation; which would allow foreign mining contractors to enter the Indonesian market, should local players lack capacity and resources to serve demand, which currently is being dutifully met by local mining contractors. Likewise, given the 3 year transition period to get this law into full effect, anything can change within that period.
We maintain buy on UNTR, currently trading at PER09-10F of 14.7x and 12.8x, respectively.
Indopremier SMGR (BUY TP Rp 8100)
Superior 3Q09 Profitability
Higher ASP and cost efficiency have resulted in superior profitability in 3Q09 where the gross margin soared by 285 bps. Responding the 9M09 result, we upgraded our ASP assumption for year 2009–2010 thus resulted in higher revenue and net profit forecast by 5.4%-12.7% and 8.1%-13.9%, respectively. Due to changes of assumptions, we get new TP at Rp 8,100 per share from previous TP Rp 7,210 per share which implying PE – PBV FY10E at 16.00x – 3.83x. BUY.
Higher ASP and cost efficiency have resulted in superior profitability in 3Q09 where the gross margin soared by 285 bps. Responding the 9M09 result, we upgraded our ASP assumption for year 2009–2010 thus resulted in higher revenue and net profit forecast by 5.4%-12.7% and 8.1%-13.9%, respectively. Due to changes of assumptions, we get new TP at Rp 8,100 per share from previous TP Rp 7,210 per share which implying PE – PBV FY10E at 16.00x – 3.83x. BUY.
KimEng More optimistic on pricing, but less robust on volume
Result above expectation
Bukit asam posted net profit of Rp2,228b in 9M09, a 69% surge compared to Rp1,321b in the same period last year, driven by higher contract price to Suralaya. For 3Q09, Bukit Asam reported Rp636b net profit (-5% QoQ) on the back of -5% drop in quarterly sales of Rp2,054b. Result in 3Q09 is lower than consensus estimate, but higher than our expectation. The company booked Rp88.8b for third-party services in 3Q09, something we did not see in the previous quarters, as part of production costs.
More optimistic on pricing
The main difference with consensus estimate is that we had factored in adjustment of contract price with Suralaya in our FY09 forecast. We had assumed that Suralaya would have renegotiated its coal price for FY09 delivery by 13% lower to the average Rp770k/ton from existing Rp884/ton. Our recent discussion with management reveals that such downward adjustment for FY09 contract is unlikely to happen. Management plans to start a negotiation for FY10 coal delivery with Suralaya, its single biggest client with est. volume of 5.1-6.1m tons in FY09, before the year-end. We currently view that contract price below Rp700k/ton for next year is unlikely and assume Rp707k/ton in our FY10 forecast or 12% higher than our initial assumption of Rp630k/ton.
Raising target price, but maintain HOLD recommendation
We have incorporated our new assumptions of contract price of Rp884k/ton and Rp707k/ton for FY0910 for Suralaya and cut our sales volume estimate to 12.76m tons for FY09 and 14.6m tons for FY10 respectively. Accordingly, we adjust our net profit estimate by +13% and +21% to Rp3,064b and Rp2,017b for FY09-10. We still view that newsflow on progress of railway expansion with total target 42.7m by 2014 from 10.3m tons in FY08, as catalyst for the stock in the short-term. We use DCF method with WACC 14% (from previously blended method) and arrive at Rp14,386/share. As such, we raise our target price to Rp14,400 from previously Rp13,500. The counter is trading at 10.9x-16.6x FY09-10 PE. HOLD.
Bukit asam posted net profit of Rp2,228b in 9M09, a 69% surge compared to Rp1,321b in the same period last year, driven by higher contract price to Suralaya. For 3Q09, Bukit Asam reported Rp636b net profit (-5% QoQ) on the back of -5% drop in quarterly sales of Rp2,054b. Result in 3Q09 is lower than consensus estimate, but higher than our expectation. The company booked Rp88.8b for third-party services in 3Q09, something we did not see in the previous quarters, as part of production costs.
More optimistic on pricing
The main difference with consensus estimate is that we had factored in adjustment of contract price with Suralaya in our FY09 forecast. We had assumed that Suralaya would have renegotiated its coal price for FY09 delivery by 13% lower to the average Rp770k/ton from existing Rp884/ton. Our recent discussion with management reveals that such downward adjustment for FY09 contract is unlikely to happen. Management plans to start a negotiation for FY10 coal delivery with Suralaya, its single biggest client with est. volume of 5.1-6.1m tons in FY09, before the year-end. We currently view that contract price below Rp700k/ton for next year is unlikely and assume Rp707k/ton in our FY10 forecast or 12% higher than our initial assumption of Rp630k/ton.
Raising target price, but maintain HOLD recommendation
We have incorporated our new assumptions of contract price of Rp884k/ton and Rp707k/ton for FY0910 for Suralaya and cut our sales volume estimate to 12.76m tons for FY09 and 14.6m tons for FY10 respectively. Accordingly, we adjust our net profit estimate by +13% and +21% to Rp3,064b and Rp2,017b for FY09-10. We still view that newsflow on progress of railway expansion with total target 42.7m by 2014 from 10.3m tons in FY08, as catalyst for the stock in the short-term. We use DCF method with WACC 14% (from previously blended method) and arrive at Rp14,386/share. As such, we raise our target price to Rp14,400 from previously Rp13,500. The counter is trading at 10.9x-16.6x FY09-10 PE. HOLD.
Rabu, 04 November 2009
Detikfinance Pemerintah Pusat Serahkan Divestasi Newmont ke Antam
Pemerintah Pusat menyerahkan divestasi saham Newmont kepada PT Aneka Tambang Tbk (Antam), karena itu pemerintah pusat tidak akan turut campur dalam penyelesaian divestasi saham Newmont ini.Demikian disampaikan oleh Menko Perekonomian Hatta Rajasa ketika ditemui di kantornya, Jalan Lapangan Banteng, Jakarta, Selasa (3/11/2009).
Okezone Humpuss Jual Clean Oil Tanker Rp40,7 M
JAKARTA - PT Humpuss Intermoda Transportasi Tbk (HITS) melalui anak usahanya yakni PT Humpuss Transportasi Kimia dan Humpuss Sea Transport Pte Ltd, sepakat menandatangani memorandum of aggrement (MoA) internal penjualan satu unit kapal Clean Oil Tanker Rp40,7 Miliar.
Hal itu disampaikan manajemen HITS dalam keterbukaan informasinya ke Bursa Efek Indonesia (BEI), Selasa (3/11/2009). Kepemilikan saham anak perusahaan sekitar masing-masing 99 persen dan 100 persen oleh HITS.
Penjualan kapal ini digunakan untuk pengembangan usaha melalui pengoperasian kapal tersebut dan untuk memenuhi persyaratan asas cabitage untuk pengangkutan minyak dan gas bumi, sesuai Peraturan Menteri Perhubungan No.71 tahun 2005, tentang pengangkutan barang atau muatan antarpelabuhan laut di dalam negeri.
HTK membeli kapal Clean Oil Tanker dari HST senilai USD4,02 juta atau setara dengan Rp40,791 miliar. Dalam keterangannya manajemen HITS mengatakan, dua perusahaan tersebut merupakan perusahaan terkendali dari perusahaan karena perseroan memiliki penyertaan modal mayoritas terhadap kedua perusahaan tersebut.
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Hal itu disampaikan manajemen HITS dalam keterbukaan informasinya ke Bursa Efek Indonesia (BEI), Selasa (3/11/2009). Kepemilikan saham anak perusahaan sekitar masing-masing 99 persen dan 100 persen oleh HITS.
Penjualan kapal ini digunakan untuk pengembangan usaha melalui pengoperasian kapal tersebut dan untuk memenuhi persyaratan asas cabitage untuk pengangkutan minyak dan gas bumi, sesuai Peraturan Menteri Perhubungan No.71 tahun 2005, tentang pengangkutan barang atau muatan antarpelabuhan laut di dalam negeri.
HTK membeli kapal Clean Oil Tanker dari HST senilai USD4,02 juta atau setara dengan Rp40,791 miliar. Dalam keterangannya manajemen HITS mengatakan, dua perusahaan tersebut merupakan perusahaan terkendali dari perusahaan karena perseroan memiliki penyertaan modal mayoritas terhadap kedua perusahaan tersebut.
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Inilah.com Indika Dirikan Usaha Baru Terbitkan 'Senior Notes
PT Indika Energy Tbk (INDY) telah mendirikan sebuah perseroan berdasarkan hukum negara Belanda dengan nama Indo Integrated Energy II B.V.
Hal ini disampaikan M. Arsjad Rasjid P.M, Direktur Utama Indika Energy Tbk dalam keterbukaan informasinya ke BEI, Kamis (21/10). Pendirian perseroan baru ini dilakukan dalam rangka penerbitan senior notes sebesar maksimal US$250 juta yang rencananya akan dicatatkan di Singapore Stock Exchange.
Kepemilikan Indika dalam perusahaan yang baru didirikannya itu sebesar 100% atau senilai Euro18 ribu. [cms]
Hal ini disampaikan M. Arsjad Rasjid P.M, Direktur Utama Indika Energy Tbk dalam keterbukaan informasinya ke BEI, Kamis (21/10). Pendirian perseroan baru ini dilakukan dalam rangka penerbitan senior notes sebesar maksimal US$250 juta yang rencananya akan dicatatkan di Singapore Stock Exchange.
Kepemilikan Indika dalam perusahaan yang baru didirikannya itu sebesar 100% atau senilai Euro18 ribu. [cms]
Inilah.com Cadangan Devisa China di BUMI
Jakarta - Manajemen Bumi Resources (BUMI) enggan menanggapi soal utang dari China Invesment Corporation (CIC) sebesar US$ 1,9 miliar terdapat cadangan devisa China US$500 juta.
Hal itu disampaikan Senior Vice President Investor Relation BUMI Dileep Srivastava, Selasa (3/11). "No idea," ujar Dileep lewat pesan singkat yang diterima INILAH.COM, Selasa (3/11).
Dileep mengatakan, pinjaman tersebut sepenuhnya sudah diambil pada bulan lalu. Pinjaman itu dilakukan melalui pinjaman China Investment Corporation (CIC) terhadap BUMI senilai US$ 1,9 miliar.
Penyataan adanya cadangan devisa pemerintah China senilai US$500 juta dikemukakan pengamat ekonomi David Sumual. "China menganggap meminjamkan ke BUMI lebih menguntungkan ketimbang menyimpannya di US$ treasury yang kuponnya hanya 1%," paparnya.
BUMI sebagai produsen batubara terbesar di Indonesia sangat diincar pihak yang membutuhkan komoditas tersebut untuk memenuhi kebutuhan energi termasuk pemerintah China. Kesempatan itu dapat dilakukan dengan memberi pinjaman ke BUMI sehingga mendapatkan jaminan pasokan batubara secara teratur ke depan. [hid]
Hal itu disampaikan Senior Vice President Investor Relation BUMI Dileep Srivastava, Selasa (3/11). "No idea," ujar Dileep lewat pesan singkat yang diterima INILAH.COM, Selasa (3/11).
Dileep mengatakan, pinjaman tersebut sepenuhnya sudah diambil pada bulan lalu. Pinjaman itu dilakukan melalui pinjaman China Investment Corporation (CIC) terhadap BUMI senilai US$ 1,9 miliar.
Penyataan adanya cadangan devisa pemerintah China senilai US$500 juta dikemukakan pengamat ekonomi David Sumual. "China menganggap meminjamkan ke BUMI lebih menguntungkan ketimbang menyimpannya di US$ treasury yang kuponnya hanya 1%," paparnya.
BUMI sebagai produsen batubara terbesar di Indonesia sangat diincar pihak yang membutuhkan komoditas tersebut untuk memenuhi kebutuhan energi termasuk pemerintah China. Kesempatan itu dapat dilakukan dengan memberi pinjaman ke BUMI sehingga mendapatkan jaminan pasokan batubara secara teratur ke depan. [hid]
Detikfinance BNBR Kaji Obligasi Global US$ 200-250 Juta
Jakarta - PT Bakrie and Brothers Tbk (BNBR) tengah melakukan penjajakan untuk menerbitkan obligasi global senilai US$ 200-250 juta dengan tenor 5 tahun.
Demikian diungkapkan Managing Director and Chief Executive Officer (CEO) BNBR Bobby Gafur Umar, dalam rilis yang dipublikasikan, Selasa (3/11/2009).
Menurutnya, penerbitan obligasi internasional ini ditujukan untuk melunasi pinjaman jangka pendek BNBR dan membiayai kegiatan investasi perseroan di waktu yang akan datang.
"Prioritas kami adalah menggantikan sejumlah pembiayaan pendek, dengan pendanaan jangka panjang (obligasi), agar dapat menunjang kegiatan investasi yang memiliki jangka waktu di atas 12 bulan," ujar Bobby.
Pada akhir September, BNBR telah melunasi cicilan utang senilai Rp 405 miliar, guna efisiensi modal dan struktur biaya. Ia menambahkan, rasionalisasi dan restrukturisasi utang yang dilakukan perseroan bertujuan agar beban utang dan tekanan pembayaran utang berkurang.
Bobby juga menjelaskan, perihal imbal hasil yang didapatkan dari investasi US$ 101juta, akan dicairkan dalam waktu dekat. Tingkat pengembalian (Internal Rate of Return /IRR) atas investasi ini berkisar 25-37%.
"BNBR juga telah merealisasikan sejumlah opsi buyback saham, sebagai bagian dari aktivitas investasinya," imbuh Bobby.
Pembelian kembali saham PT Bumi Resources Tbk (BUMI) telah dilakukan BNBR sebanyak 1,7%. Direncanakan perseroan akan melakukan pembelian kembali saham BUMI, setelah 1,7% dimiliki mereka setelah proses buyback .
Porsi saham PT Bakrieland Development Tbk (ELTY) juga telah ditambahkan BNBR dalam portofolio mereka, dengan jumlah saham sebanyak 6,4%.
(wep/dnl)
Demikian diungkapkan Managing Director and Chief Executive Officer (CEO) BNBR Bobby Gafur Umar, dalam rilis yang dipublikasikan, Selasa (3/11/2009).
Menurutnya, penerbitan obligasi internasional ini ditujukan untuk melunasi pinjaman jangka pendek BNBR dan membiayai kegiatan investasi perseroan di waktu yang akan datang.
"Prioritas kami adalah menggantikan sejumlah pembiayaan pendek, dengan pendanaan jangka panjang (obligasi), agar dapat menunjang kegiatan investasi yang memiliki jangka waktu di atas 12 bulan," ujar Bobby.
Pada akhir September, BNBR telah melunasi cicilan utang senilai Rp 405 miliar, guna efisiensi modal dan struktur biaya. Ia menambahkan, rasionalisasi dan restrukturisasi utang yang dilakukan perseroan bertujuan agar beban utang dan tekanan pembayaran utang berkurang.
Bobby juga menjelaskan, perihal imbal hasil yang didapatkan dari investasi US$ 101juta, akan dicairkan dalam waktu dekat. Tingkat pengembalian (Internal Rate of Return /IRR) atas investasi ini berkisar 25-37%.
"BNBR juga telah merealisasikan sejumlah opsi buyback saham, sebagai bagian dari aktivitas investasinya," imbuh Bobby.
Pembelian kembali saham PT Bumi Resources Tbk (BUMI) telah dilakukan BNBR sebanyak 1,7%. Direncanakan perseroan akan melakukan pembelian kembali saham BUMI, setelah 1,7% dimiliki mereka setelah proses buyback .
Porsi saham PT Bakrieland Development Tbk (ELTY) juga telah ditambahkan BNBR dalam portofolio mereka, dengan jumlah saham sebanyak 6,4%.
(wep/dnl)
Bloomberg Gold Climbs to Record on Bank’s Bullion Purchase
Gold futures for December delivery rose $30.90, or 2.9 percent, to $1,084.90 an ounce on the Comex division of the New York Mercantile Exchange, a record settlement price. The contract touched $1,088.50, the all-time high intraday price. The previous record was $1,072 an ounce, set on Oct. 14.
Bloomberg Oil Rises as Gold Climbs to Record on Bank’s Bullion Purchase
Nov. 3 (Bloomberg) -- Crude oil rebounded from a two-week low as gold surged to a record in New York after India’s central bank purchased 200 metric tons of the metal from the International Monetary Fund.
Oil climbed 1.9 percent as the Indian gold purchase bolstered the appeal of commodities. Crude also got a technical bounce after touching $76.55 a barrel, the lowest intraday price since Oct. 15. When futures don’t drop further after reaching a new low, technical traders see it as a sign to purchase the contract.
“Oil is turning into a financial asset, the same type of thing as gold,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
Crude oil for December delivery climbed $1.47, or 1.9 percent, to settle at $79.60 a barrel at 3:03 p.m. on the New York Mercantile Exchange. Oil has risen 78 percent this year.
Prices were down from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles declined as supplies of distillate fuel, a category that includes heating oil and diesel, increased last week. December oil was up $1.27, or 1.6 percent, to $79.40 a barrel in electronic trading at 4:35 p.m.
Oil fell as much as 2 percent earlier today on the announcement that Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc received a second bailout from U.K. taxpayers, signaling that the global economy may take longer to recover from the worst recession since the 1930s.
Testing Support
“Oil tested support in the $76.50 area and failed to break through,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “From a technical standpoint, this was a sign that prices are moving higher.” more...
Oil climbed 1.9 percent as the Indian gold purchase bolstered the appeal of commodities. Crude also got a technical bounce after touching $76.55 a barrel, the lowest intraday price since Oct. 15. When futures don’t drop further after reaching a new low, technical traders see it as a sign to purchase the contract.
“Oil is turning into a financial asset, the same type of thing as gold,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.
Crude oil for December delivery climbed $1.47, or 1.9 percent, to settle at $79.60 a barrel at 3:03 p.m. on the New York Mercantile Exchange. Oil has risen 78 percent this year.
Prices were down from the settlement after the American Petroleum Institute reported at 4:30 p.m. that U.S. crude-oil stockpiles declined as supplies of distillate fuel, a category that includes heating oil and diesel, increased last week. December oil was up $1.27, or 1.6 percent, to $79.40 a barrel in electronic trading at 4:35 p.m.
Oil fell as much as 2 percent earlier today on the announcement that Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc received a second bailout from U.K. taxpayers, signaling that the global economy may take longer to recover from the worst recession since the 1930s.
Testing Support
“Oil tested support in the $76.50 area and failed to break through,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “From a technical standpoint, this was a sign that prices are moving higher.” more...
Reuters Australia's Newcastle coal exports rebound 13 pct
PERTH, Nov 3 (Reuters) - Coal exports at Australia's Newcastle port, the world's largest coal export terminal, rebounded by nearly 13 percent in the latest week, while ship queues stayed near a one-year low due to smooth port operations.
Exports from the eastern coast port, which ships mostly thermal coal used in power generation, rose to 2.17 million tonnes in the week to Nov 2, port data showed on Tuesday.
The number of coal ships arriving -- a key indicator of demand -- slipped by three to 22, while the average queue time fell for a third week to five days.
For more details on Newcastle port statistics, click on.
After swelling to a two-year high of over 50 ships in late August, vessel queues have eased significantly over the past month, after the port operator reinstated an export quota system to distribute port capacity among producers.
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 prices at Newcastle port, a benchmark for Asia, gained 2 percent to $74.63 a tonne in the latest week, according to the globalCOAL NEWC Index.
Exports from the eastern coast port, which ships mostly thermal coal used in power generation, rose to 2.17 million tonnes in the week to Nov 2, port data showed on Tuesday.
The number of coal ships arriving -- a key indicator of demand -- slipped by three to 22, while the average queue time fell for a third week to five days.
For more details on Newcastle port statistics, click on
After swelling to a two-year high of over 50 ships in late August, vessel queues have eased significantly over the past month, after the port operator reinstated an export quota system to distribute port capacity among producers.
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 prices at Newcastle port, a benchmark for Asia, gained 2 percent to $74.63 a tonne in the latest week, according to the globalCOAL NEWC Index.
Reuters Indonesia Adaro Q3 net profit jumps on coal demand
* Q3 net profit up 131.6 percent to 1.27 trillion rupiah
* Q3 revenue up 56.8 percent to 7.12 trillion rupiah
JAKARTA, Oct 31 (Reuters) - Indonesia's largest coal
producer by market value PT Adaro Energy Tbk (ADRO.JK) posted a
131.6 percent increase in its third quarter net profit, based on
Reuters calculations, amid increasing coal demand for both
exports and domestic use.
Adaro, which has a market capitalisation of $5.14 billion,
sells to 48 customers in 18 countries worldwide, including power
utilities Thai Power and Indonesian state electricity firm
Perusahaan Listrik Negara (PLN). Exports account for more than
70 percent of its sales.
The firm had said that the demand for its coal strengthened
at the end of June and expected the trend to continue until the
end of the year with increasing sales to Asian customers.
Adaro posted a 58.9 percent increase of coal exports and
55.7 percent increase of domestic coal sales in the
July-September period.
Its net profit grew 131.6 percent to 1.27 trillion rupiah
from 546.5 billion rupiah a year ago, while the revenue jumped
56.8 percent to 7.12 trillion rupiah.
The figures were based on Reuters calculations from the
nine-months and first-half earnings published by the company.
Adaro aims to produce 42-45 million tonnes of coal this
year, up from 38.5 million tonnes in 2008, and to raise
production to 80 million tonnes per year in the next five years.
With higher sales volume, Adaro has forecast double-digit growth
in revenue and net profit this year.
Shares in Adaro closed at 1,540 rupiah on Friday.
($1 = 9,540 rupiah)
(Reporting by Telly Nathalia, editing by Sunanda Creagh)
* Q3 revenue up 56.8 percent to 7.12 trillion rupiah
JAKARTA, Oct 31 (Reuters) - Indonesia's largest coal
producer by market value PT Adaro Energy Tbk (ADRO.JK) posted a
131.6 percent increase in its third quarter net profit, based on
Reuters calculations, amid increasing coal demand for both
exports and domestic use.
Adaro, which has a market capitalisation of $5.14 billion,
sells to 48 customers in 18 countries worldwide, including power
utilities Thai Power and Indonesian state electricity firm
Perusahaan Listrik Negara (PLN). Exports account for more than
70 percent of its sales.
The firm had said that the demand for its coal strengthened
at the end of June and expected the trend to continue until the
end of the year with increasing sales to Asian customers.
Adaro posted a 58.9 percent increase of coal exports and
55.7 percent increase of domestic coal sales in the
July-September period.
Its net profit grew 131.6 percent to 1.27 trillion rupiah
from 546.5 billion rupiah a year ago, while the revenue jumped
56.8 percent to 7.12 trillion rupiah.
The figures were based on Reuters calculations from the
nine-months and first-half earnings published by the company.
Adaro aims to produce 42-45 million tonnes of coal this
year, up from 38.5 million tonnes in 2008, and to raise
production to 80 million tonnes per year in the next five years.
With higher sales volume, Adaro has forecast double-digit growth
in revenue and net profit this year.
Shares in Adaro closed at 1,540 rupiah on Friday.
($1 = 9,540 rupiah)
(Reporting by Telly Nathalia, editing by Sunanda Creagh)
Palmoil HQ Likely 500,000 tonne cut in Malaysia palm oil output
KUALA LUMPUR: Palm oil output could be cut by 500,000 tonnes a year temporarily because of a government replanting initiative for smallholders, according to Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.“Taking into account the limited land available in the country and the need to preserve the environment, the current focus of the Government (replanting initiative) is geared towards enhancing productivity,” he said at the 7th Roundtable Meeting on Sustainable Palm Oil yesterday. Dompok said the Government had allocated RM100mil for the 2009-2010 period to assist smallholders in the replanting programme.
This investment was part of the Government’s push to boost productivity as the country was running short of additional estate land.
He said the replanting scheme was also in line with the Government’s longer-term target to produce a national average of 35 tonnes of fresh fruit bunches per ha per year by 2020 from the current level of 20 tonnes.
Dompok said the country had 157,000ha producing more than 1 million tonnes of palm oil that was certified as sustainable.
“While the certified palm oil is mostly from the plantation sector, it is also important due attention be given to bring on board the smallholders,” he said.
“In Malaysia, close to 40% of the planted areas are managed by smallholders and, as such, outreach efforts need to be made to bring on board this particular segment of the industry.”
To assist smallholders, the Government had allocated RM50mil, he said, adding: “This fund will be used for educating smallholders on the importance of adapting sustainability practices, as well as in the certification process.”
Indopremier PTBA (BUY TP Rp 18600)
Among listed coal mine companies under our coverage, in terms of profitability, end of all measures, PTBA excels (Graph 1). Meanwhile, expansion plan to achieve 47mn ton production in 2015 is in progress ( Graph 3). Valuation wise ( Table 6), PTBA is trading at a proper level, still below that of the market. 9M09 results is in-line with our estimates and that will take a stellar 74% earnings growth this year. We have made several adjustments to our basically-unchanged estimates, and at WACC 14.3% and LTG2%, we get an equivalent of target price of Rp18.600 per share. Maintain BUY recommendation
KimEng Bank Central Asia: NPL back on track, HOLD
Strong deposit franchise remains..
With its competitors starting to reduce Rupiah time-deposit rate on request from Bank Indonesia, BCA managed to expand its deposit franchise beyond our estimate by posting 11.8% YTD increase in 9M09. We believe this upward trend in third party fund will continue, bringing the number to a new height of Rp240.3b by YE09 and further to Rp265.3b by YE10. The expansion will not come at higher cost, providing the bank with high liquidity at an estimated low CoF of 3.7% in 2009 and down to 3.4% in 2010F. This progress, however, will not be accompanied by the lending side as proven by rising amount of unused loan facilities.
..but with shortcoming on loan book
Being one of the big banks that suffer from negative loan growth in early 2009, BCA has just managed to bring its balance back at par with YE08 position to Rp112.7b by 9M09. Taking this slower-than-expected progress into account, we cut our YE09 loan book forecast down from Rp129.7b to Rp121.8b, now implying 5.2% YoY net increase. Included in our assumption is acceleration in loan withdrawal approaching year-end, commonly made by companies for tax purpose. We expect BCA’s lending growth to hover around 15% YoY from 2010F onwards on the back of economic recovery. We also estimated a lower benchmark interest rate at an average of 7% in 2010F vs. 7.5% in 2009, which should boost appetite for loan.
Maintain HOLD, TP at Rp4,040/share
We expect BCA’s consumer lending, which is continuously on the rise, to provide a soft buffer on the bank’s yield. In addition, its tight credit approval will result in low NPL, hence lower provisioning expense. Our earnings forecast for 2009 and 2010F is increased by an average of 10% to around Rp6.8t as provision expense is projected to decline from Rp3.0t (1.6% NPL) to Rp2.6t (1.1% NPL), respectively. Thus, we raised our TP for BCA to Rp4,040/share with HOLD recommendation. It implies 11.7% downside potential from current price at 2010F PER of 14.6x and PBV of 3.3x.
With its competitors starting to reduce Rupiah time-deposit rate on request from Bank Indonesia, BCA managed to expand its deposit franchise beyond our estimate by posting 11.8% YTD increase in 9M09. We believe this upward trend in third party fund will continue, bringing the number to a new height of Rp240.3b by YE09 and further to Rp265.3b by YE10. The expansion will not come at higher cost, providing the bank with high liquidity at an estimated low CoF of 3.7% in 2009 and down to 3.4% in 2010F. This progress, however, will not be accompanied by the lending side as proven by rising amount of unused loan facilities.
..but with shortcoming on loan book
Being one of the big banks that suffer from negative loan growth in early 2009, BCA has just managed to bring its balance back at par with YE08 position to Rp112.7b by 9M09. Taking this slower-than-expected progress into account, we cut our YE09 loan book forecast down from Rp129.7b to Rp121.8b, now implying 5.2% YoY net increase. Included in our assumption is acceleration in loan withdrawal approaching year-end, commonly made by companies for tax purpose. We expect BCA’s lending growth to hover around 15% YoY from 2010F onwards on the back of economic recovery. We also estimated a lower benchmark interest rate at an average of 7% in 2010F vs. 7.5% in 2009, which should boost appetite for loan.
Maintain HOLD, TP at Rp4,040/share
We expect BCA’s consumer lending, which is continuously on the rise, to provide a soft buffer on the bank’s yield. In addition, its tight credit approval will result in low NPL, hence lower provisioning expense. Our earnings forecast for 2009 and 2010F is increased by an average of 10% to around Rp6.8t as provision expense is projected to decline from Rp3.0t (1.6% NPL) to Rp2.6t (1.1% NPL), respectively. Thus, we raised our TP for BCA to Rp4,040/share with HOLD recommendation. It implies 11.7% downside potential from current price at 2010F PER of 14.6x and PBV of 3.3x.
KimEng Bank Mandiri: Waiting for bigger earnings booster, HOLD
Robust loan growth not yet in fashion
Given the 7.1% YTD loan growth achievement as of 9M09, Mandiri’s FY09 result is not likely to reach our optimistic estimate of 20.4%. With rising idle loan facility as evidence, we do not see loan appetite from corporate and commercial segment to accelerate until 2010, while that of the high-yield segment, although keeps increasing, is still too low to provide significant boost to the overall loan book. Nevertheless, a full year growth as low as 16% in 2009 will not jeopardize the bottom line earnings forecast even when coupled with a declining trend in yield. Supporting the downward pressure is a lower-than-expected provisioning expense.
Peak of NPL is last season
Bigger loan repayment from Rp270b in 2Q09 to Rp400b in 3Q09, although resulted in lower outstanding amount, also indicates improving loan quality. On QoQ basis, NPL has gradually slided down from 5.9% in 1Q09 to 3.8% in 3Q09. We estimate the YE09 rate to remain low at 4.1%, which translates into reduction in the provisioning expense from previously Rp3t to Rp2.5t.
NIM unchanged at 5.1%
Mandiri is included in the list of banks that benefit from the agreement to limit time-deposit (TD) rate at 8%. Less than two months after implementation, the bank managed to press its CoF from 4.9% in 2Q09 to 4.8% in 3Q09. We expect the downward trend to continue to 4.3% in 4Q09 as more deposit re-pricing will take place along with further reduction in TD ceiling rate to 7%. At an estimated 8.7% deposit growth in 2009, it will counter the effect from declining yield, which we projected to touch 8.9% in 4Q09. The net outcome is a remaining stable NIM at 5.1% by YE09.
Maintain HOLD, TP at Rp4,600/share
The above mentioned adjustments resulted in averagely 6% increase in profit, to Rp6.4t in 2009 and Rp8.1t in 2010F. Note that we already took into account Rp1.01t debt settlement with Garuda Indonesia, which is subject to IPO of the airline company. We increase our TP on Bank Mandiri to Rp4,600/share implying 2010F PER of 12.6x and PBV of 2.4x. HOLD.
Given the 7.1% YTD loan growth achievement as of 9M09, Mandiri’s FY09 result is not likely to reach our optimistic estimate of 20.4%. With rising idle loan facility as evidence, we do not see loan appetite from corporate and commercial segment to accelerate until 2010, while that of the high-yield segment, although keeps increasing, is still too low to provide significant boost to the overall loan book. Nevertheless, a full year growth as low as 16% in 2009 will not jeopardize the bottom line earnings forecast even when coupled with a declining trend in yield. Supporting the downward pressure is a lower-than-expected provisioning expense.
Peak of NPL is last season
Bigger loan repayment from Rp270b in 2Q09 to Rp400b in 3Q09, although resulted in lower outstanding amount, also indicates improving loan quality. On QoQ basis, NPL has gradually slided down from 5.9% in 1Q09 to 3.8% in 3Q09. We estimate the YE09 rate to remain low at 4.1%, which translates into reduction in the provisioning expense from previously Rp3t to Rp2.5t.
NIM unchanged at 5.1%
Mandiri is included in the list of banks that benefit from the agreement to limit time-deposit (TD) rate at 8%. Less than two months after implementation, the bank managed to press its CoF from 4.9% in 2Q09 to 4.8% in 3Q09. We expect the downward trend to continue to 4.3% in 4Q09 as more deposit re-pricing will take place along with further reduction in TD ceiling rate to 7%. At an estimated 8.7% deposit growth in 2009, it will counter the effect from declining yield, which we projected to touch 8.9% in 4Q09. The net outcome is a remaining stable NIM at 5.1% by YE09.
Maintain HOLD, TP at Rp4,600/share
The above mentioned adjustments resulted in averagely 6% increase in profit, to Rp6.4t in 2009 and Rp8.1t in 2010F. Note that we already took into account Rp1.01t debt settlement with Garuda Indonesia, which is subject to IPO of the airline company. We increase our TP on Bank Mandiri to Rp4,600/share implying 2010F PER of 12.6x and PBV of 2.4x. HOLD.
KimEng AALI: 9M09 result in line, HOLD
Net profit in line both at operating level and net profit level
Astra Agro Lestari published its 9M09 result with net profit of Rp1,248b, a 41% drop compared to that of last year period, in line with our expectation, but lower than consensus estimate. Revenue was down by 18% to Rp5,463b on the back of 21% lower CPO price. Gross and operating profits were also down by 34% and 38% to Rp2,255b and Rp1,913b (from Rp3,408b and Rp3,109b in 9M08 respectively). Gross and operating margins were down to 41.3% and 35%, from previously 50.9% and 46.4%. Below operating line, the company booked financing expenses of Rp23b, mostly for financial charges related to total US$150m loan facilities from a group of lenders consists of The Bank of Tokyo-Mitsubishi UFJ Ltd, OCBC, Standard Chartered Bank, NATIXIS and Sumitomo Mitsui. The loan facility was taken earlier, but is yet to be utilized, for capital expenditure to anticipate deteriorating cash flow in case of low CPO price persists.
Robust production from nucleus in 3Q09
The company harvested 1.14m tons of FFB from its nucleus and plasma estates in 3Q09, a total of 4% growth QoQ compared to that in 2Q09. Robust production of FFB from nucleus is the main driver, in our view, with growth of 6% QoQ to 908k tons, while production from plasma and purchased from third party was actually down by total 6% QoQ to 321.1k tons. The lower FFB purchase from plasma and third party also contributed to improved quarterly gross margin in 3Q9 at 46.8% (vs. 45.5% in 2Q09) despite of 12% QoQ lower CPO price (Rp6,247/kg in 3Q09). Geographically, Sumatra and Kalimantan grew by 4% and 7% with total contribution of 77% or 942k tons to total FFB processed. CPO production in 3Q09 is a record high with 286k tons, even when there was a long holiday due to the Muslim festive. YTD the company has produced 3.14m tons of FFB and 786k tons of CPO and 169k tons of kernel. With the El Nino is expected to be mild, we see the company should not have any problem to meet our production estimate of 1.02m tons of CPO. In terms of production, we see the risk would be more on the upside.
Reaching fair value
We expect CPO price to remain relative stable hovering at MYR2200/ton in 4Q09. However, we estimate higher CPO price in 2010, assuming MYR2500/ton, as we expect global economic recovery to boost edible oil consumption. We have fined tune our forecast and slightly increased our CPO production estimate by 1% from 1.01m tons to 1.02m tons. We reckon a strengthening rupiah may put pressure on margin in 4Q09, since CPO price is mostly quoted in US$ but costs are in rupiah. With El Nino is expected to be relatively mild and come in June 2010, later than earlier estimate, we expect production in 2010 should be relatively strong with 2% growth. We use DCF method for valuation with WACC 14%, which arrives at fair value of Rp21,921 a share. Our target price translates into HOLD recommendation. At present the stock trading at 19.5x -16.2x FY09-10 PE.
Astra Agro Lestari published its 9M09 result with net profit of Rp1,248b, a 41% drop compared to that of last year period, in line with our expectation, but lower than consensus estimate. Revenue was down by 18% to Rp5,463b on the back of 21% lower CPO price. Gross and operating profits were also down by 34% and 38% to Rp2,255b and Rp1,913b (from Rp3,408b and Rp3,109b in 9M08 respectively). Gross and operating margins were down to 41.3% and 35%, from previously 50.9% and 46.4%. Below operating line, the company booked financing expenses of Rp23b, mostly for financial charges related to total US$150m loan facilities from a group of lenders consists of The Bank of Tokyo-Mitsubishi UFJ Ltd, OCBC, Standard Chartered Bank, NATIXIS and Sumitomo Mitsui. The loan facility was taken earlier, but is yet to be utilized, for capital expenditure to anticipate deteriorating cash flow in case of low CPO price persists.
Robust production from nucleus in 3Q09
The company harvested 1.14m tons of FFB from its nucleus and plasma estates in 3Q09, a total of 4% growth QoQ compared to that in 2Q09. Robust production of FFB from nucleus is the main driver, in our view, with growth of 6% QoQ to 908k tons, while production from plasma and purchased from third party was actually down by total 6% QoQ to 321.1k tons. The lower FFB purchase from plasma and third party also contributed to improved quarterly gross margin in 3Q9 at 46.8% (vs. 45.5% in 2Q09) despite of 12% QoQ lower CPO price (Rp6,247/kg in 3Q09). Geographically, Sumatra and Kalimantan grew by 4% and 7% with total contribution of 77% or 942k tons to total FFB processed. CPO production in 3Q09 is a record high with 286k tons, even when there was a long holiday due to the Muslim festive. YTD the company has produced 3.14m tons of FFB and 786k tons of CPO and 169k tons of kernel. With the El Nino is expected to be mild, we see the company should not have any problem to meet our production estimate of 1.02m tons of CPO. In terms of production, we see the risk would be more on the upside.
Reaching fair value
We expect CPO price to remain relative stable hovering at MYR2200/ton in 4Q09. However, we estimate higher CPO price in 2010, assuming MYR2500/ton, as we expect global economic recovery to boost edible oil consumption. We have fined tune our forecast and slightly increased our CPO production estimate by 1% from 1.01m tons to 1.02m tons. We reckon a strengthening rupiah may put pressure on margin in 4Q09, since CPO price is mostly quoted in US$ but costs are in rupiah. With El Nino is expected to be relatively mild and come in June 2010, later than earlier estimate, we expect production in 2010 should be relatively strong with 2% growth. We use DCF method for valuation with WACC 14%, which arrives at fair value of Rp21,921 a share. Our target price translates into HOLD recommendation. At present the stock trading at 19.5x -16.2x FY09-10 PE.
CIMB AALI - Mayora Indah Result note - Beat expectations by a wide margin
(MYOR IJ / MYOR.JK, OUTPERFORM - Upgraded, Rp2,950 - Tgt. Rp3,950, Consumer)
We upgrade Mayora to Outperform from Underperform with a higher target price of Rp3,950 (from Rp3,600), still DCF-based. Mayora's 3Q09 results were significantly ahead of consensus and our forecasts from higher-than-expected sales and margins. Consequently, 9M09 core profit, which grew 92.6% yoy, forms 97% of our FY09 forecast and 110% of consensus. Our target price upgrade comes on the back of our earnings upgrade of 1-18%, powered by the better-than-expected 3Q09 results. While our previous concern over its margin sensitivity to rising commodity costs (sugar specifically) remains, this has been mitigated by our stronger currency view. Share-price catalysts remain better-than-expected earnings growth, in our view.
We upgrade Mayora to Outperform from Underperform with a higher target price of Rp3,950 (from Rp3,600), still DCF-based. Mayora's 3Q09 results were significantly ahead of consensus and our forecasts from higher-than-expected sales and margins. Consequently, 9M09 core profit, which grew 92.6% yoy, forms 97% of our FY09 forecast and 110% of consensus. Our target price upgrade comes on the back of our earnings upgrade of 1-18%, powered by the better-than-expected 3Q09 results. While our previous concern over its margin sensitivity to rising commodity costs (sugar specifically) remains, this has been mitigated by our stronger currency view. Share-price catalysts remain better-than-expected earnings growth, in our view.
Credit Suisse - Lower-than-expected 9M09 earnings ANTM (TP Rp2,200)
● Antam reported net profit of Rp293 bn in 9M09, down 82% YoY due to lower nickel price and ferronickel sales volume. This is significantly lower than market expectation due to the impact of the appreciation of rupiah. Antam’s revenue is USD based and the company reports in rupiah.
● The company has not announced the operational results, but indicated earlier that ferronickel output was around 10,500 tonnes in 9M09, down 25% YoY. Sales revenue was down 17% YoY to Rp6.3 tn reflecting the lower volume and price. However, Antam was able to offset the decline in ferronickel sales volume with more gold trading activities.
● We believe that the market has been pricing in the upside risks on Antam due to positive movement in nickel price and the possibility for taking over 14% stake in Batu Hijau. We upgrade our target price to Rp2,200 (from Rp950), which is based on 2.2x P/B 10E, reflecting the average P/B in the rising nickel price environment.
We retain our NEUTRAL rating, recommend profit taking.
● The company has not announced the operational results, but indicated earlier that ferronickel output was around 10,500 tonnes in 9M09, down 25% YoY. Sales revenue was down 17% YoY to Rp6.3 tn reflecting the lower volume and price. However, Antam was able to offset the decline in ferronickel sales volume with more gold trading activities.
● We believe that the market has been pricing in the upside risks on Antam due to positive movement in nickel price and the possibility for taking over 14% stake in Batu Hijau. We upgrade our target price to Rp2,200 (from Rp950), which is based on 2.2x P/B 10E, reflecting the average P/B in the rising nickel price environment.
We retain our NEUTRAL rating, recommend profit taking.
CIMB Unilever Indonesia Result note - Too early to tell
(UNVR IJ / UNVR.JK, UNDERPERFORM - Maintained, Rp10,700 - Tgt. Rp11,200, Consumer)
Maintain Underperform on Unilever. We have raised our earnings estimate for FY09 by 2% on the back of changes in our cost and currency assumptions and raised our target price to Rp11,200 (from Rp8,730), still based on 24x P/E (63% premium to JCI based on historical average) but rolled over to CY10. 9M09 earnings were ahead to our estimate, adjusted for seasonality, forming 83% of our FY09 forecast mainly due to lower cost spent during the period compare to our previous estimate. Yet, we haven't seen improvements in Unilever's financials following competition with P&G in personal care products. Thus, we maintain Underperform.
Maintain Underperform on Unilever. We have raised our earnings estimate for FY09 by 2% on the back of changes in our cost and currency assumptions and raised our target price to Rp11,200 (from Rp8,730), still based on 24x P/E (63% premium to JCI based on historical average) but rolled over to CY10. 9M09 earnings were ahead to our estimate, adjusted for seasonality, forming 83% of our FY09 forecast mainly due to lower cost spent during the period compare to our previous estimate. Yet, we haven't seen improvements in Unilever's financials following competition with P&G in personal care products. Thus, we maintain Underperform.
Mandiri Sekuritas Summarecon Agung: 9M09 results are above consensus and our estimates (SMRA, Rp 580, Sell, TP: 200)
Summarecon Agung’s 9M09 results were above our estimates and consensus. Revenue and net profit increased by 11.9% yoy and 45.0% yoy, respectively. Such increase was particularly due to the decline in non operating expense (- 19% yoy) supported by higher forex gain and lower loss in derivative instrument.
On qoq basis, revenue and net income grew by 44.9% yoy and 11.9% yoy, respectively as a result of higher revenue realization from its 2008 marketing sales, which is mainly supported by project development in Kelapa Gading & Summarecon Serpong.
In Kelapa Gading, the company will operate their first hotel in May 2010 with total development cost of Rp150bn. The hotel is a 3-star hotel with 300 rooms available targeted to local business people and travelers. This hotel operation will provide additional recurring income to the company, in addition to mall and apartment (source: Kontan Newspaper)
Currently, we have a sell rating on this stock, which is trading at 24% discount to our NAV09F and PER09-10F of 11.3x and 8.4x respectively. We are still reviewing our forecast and recommendation, and still keep our target revenue Rp1tn for FY09F.
On qoq basis, revenue and net income grew by 44.9% yoy and 11.9% yoy, respectively as a result of higher revenue realization from its 2008 marketing sales, which is mainly supported by project development in Kelapa Gading & Summarecon Serpong.
In Kelapa Gading, the company will operate their first hotel in May 2010 with total development cost of Rp150bn. The hotel is a 3-star hotel with 300 rooms available targeted to local business people and travelers. This hotel operation will provide additional recurring income to the company, in addition to mall and apartment (source: Kontan Newspaper)
Currently, we have a sell rating on this stock, which is trading at 24% discount to our NAV09F and PER09-10F of 11.3x and 8.4x respectively. We are still reviewing our forecast and recommendation, and still keep our target revenue Rp1tn for FY09F.
Mandiri Sekuritas Lautan Luas: 9M09 results are below our expectation (LTLS, Rp770, Buy, TP: Rp1,100)
Lautan Luas’ 3Q09 net income dropped by 55.8% qoq, with 9M09 net income only represented 45.3% of our FY09F (no consensus for this stock)
This lower bottom line was due to lower forex gain booked during 3Q09 of Rp33.6bn compared to Rp76.9bn in 2Q09.
However, operating wise, the company showed better performance (qoq).
We still maintain our Buy recommendation on LTLS with TP of Rp1,100/share. The stock is trading at PER09-10F of 4.5x-2.8x and PBV09-10F of 0.7x-0.6x.
We are reviewing our forecast for possible downgrade on earnings estimates
This lower bottom line was due to lower forex gain booked during 3Q09 of Rp33.6bn compared to Rp76.9bn in 2Q09.
However, operating wise, the company showed better performance (qoq).
We still maintain our Buy recommendation on LTLS with TP of Rp1,100/share. The stock is trading at PER09-10F of 4.5x-2.8x and PBV09-10F of 0.7x-0.6x.
We are reviewing our forecast for possible downgrade on earnings estimates
CIMB Bank Rakyat Indonesia Result note - Defying sector trends
(BBRI IJ / BBRI.JK, OUTPERFORM - Maintained, Rp7,100 - Tgt. Rp9,600, Financial Services)
We have a higher DDM-based (discount rate 16.4%) target price of Rp9,600 for BRI (from Rp7,150) as we roll over to CY10. High loan growth which defied sector trends is still the main reason for our Outperform rating. Micro loan growth has proven resilient again. While 3Q09 results show a slight increase in the NPL ratio, we believe this was a hiccup. 3Q09 core profit was in line with our expectations. However, we have raised our FY09 net profit by 8% to incorporate non-recurring income. Our new target price implies 3.9-3.3x P/BV and 15.2-11.9 CY10-11 P/Es.
We have a higher DDM-based (discount rate 16.4%) target price of Rp9,600 for BRI (from Rp7,150) as we roll over to CY10. High loan growth which defied sector trends is still the main reason for our Outperform rating. Micro loan growth has proven resilient again. While 3Q09 results show a slight increase in the NPL ratio, we believe this was a hiccup. 3Q09 core profit was in line with our expectations. However, we have raised our FY09 net profit by 8% to incorporate non-recurring income. Our new target price implies 3.9-3.3x P/BV and 15.2-11.9 CY10-11 P/Es.
CIMB Bank Central Asia Result note - Helped by non-recurring gains
(BBCA IJ / BBCA.JK, UNDERPERFORM - Maintained, Rp4,575 - Tgt. Rp4,700, Financial Services)
We maintain our Underperform rating on BCA with an unchanged target price of Rp4,700 (DDM valuation, discount rate 15.8%). 3Q09 core profit met our expectation. Nevertheless, we have raised our FY09 forecast by 5%, to incorporate non-recurring gains. With 5% qoq loan growth, BCA was finally able to close its chapter on loan contractions in the previous two quarters. Loads of effort would be needed to lift its asset growth, however, as its current strength on the liabilities side is unlikely to power profitability growth. As the priciest bank in Indonesia with few catalysts expected, BCA seems to have little scope to outperform the market notably, in our view.
We maintain our Underperform rating on BCA with an unchanged target price of Rp4,700 (DDM valuation, discount rate 15.8%). 3Q09 core profit met our expectation. Nevertheless, we have raised our FY09 forecast by 5%, to incorporate non-recurring gains. With 5% qoq loan growth, BCA was finally able to close its chapter on loan contractions in the previous two quarters. Loads of effort would be needed to lift its asset growth, however, as its current strength on the liabilities side is unlikely to power profitability growth. As the priciest bank in Indonesia with few catalysts expected, BCA seems to have little scope to outperform the market notably, in our view.
CIMB Astra Internasional Result note - Auto shine
(ASII IJ / ASII.JK, OUTPERFORM - Upgraded, Rp31,300 - Tgt. Rp39,300, Automobiles and Parts)
Upgrade Astra to Outperform from Neutral with a higher target price of Rp39,300 (from Rp36,800), still using sum of the parts and implying 16x and 14x CY10-11 earnings, at a slight discount to our market P/E target of 15x. 3Q09 results were ahead of our forecast and market consensus by 8% and 5% respectively, due to stellar performances from the auto and heavy equipment divisions. Astra 3Q09 financials prove beyond doubt the auto sector's recovery, in our view. We upgrade our earnings estimates by 7-13% largely on higher margin assumptions for the motorcycle business. Our sum-of-the-parts valuation has been raised by 7% on a 20%-plus increase in auto valuations.
Upgrade Astra to Outperform from Neutral with a higher target price of Rp39,300 (from Rp36,800), still using sum of the parts and implying 16x and 14x CY10-11 earnings, at a slight discount to our market P/E target of 15x. 3Q09 results were ahead of our forecast and market consensus by 8% and 5% respectively, due to stellar performances from the auto and heavy equipment divisions. Astra 3Q09 financials prove beyond doubt the auto sector's recovery, in our view. We upgrade our earnings estimates by 7-13% largely on higher margin assumptions for the motorcycle business. Our sum-of-the-parts valuation has been raised by 7% on a 20%-plus increase in auto valuations.
CIMB Indocement Result note - Steady as it goes
(INTP IJ / INTP.JK, OUTPERFORM - Maintained, Rp11,050 - Tgt. Rp15,000, Construction and Materials)
Maintain Outperform on Indocement. 9M09 results met our expectations, forming 77% of our FY09 estimate. We expect a consensus upgrade as the results already form 82% of consensus expectations for FY09. We are maintaining our earnings forecasts and target price of Rp15,000, based on DCF (WACC 13%, LTG 5.5%). Catalysts should include margin expansion due to cost cutting and sales volume growth in 2010.
Maintain Outperform on Indocement. 9M09 results met our expectations, forming 77% of our FY09 estimate. We expect a consensus upgrade as the results already form 82% of consensus expectations for FY09. We are maintaining our earnings forecasts and target price of Rp15,000, based on DCF (WACC 13%, LTG 5.5%). Catalysts should include margin expansion due to cost cutting and sales volume growth in 2010.
Mandiri Sekuritas Economy: Oct09 CPI Inflation: Remain muted
Inflation rate eased to 0.19% mom in Oct09 and 2.57% yoy, undershooting our and consensus expectation of 0.35% mom and 0.44% mom respectively. Lower raw food inflation and deflation in transportation tariffs drove inflation lower than we anticipated.
Although Oct09 inflation was lower than our expectation, we don’t think that it would significantly affect our full-year forecast. We are still comfortable with our inflation forecast of around 4% yoy in 2009 and likely increase to 6.3% in 2010 on the back of improvement in domestic demand, higher commodity prices, and possible increase in administered prices.
Accordingly, we still expect Bank Indonesia to maintain its policy rate flat at 6.5% for the rest of the year. We think at the current rate the monetary policy remains accommodative to economic growth, while helping anchor inflation expectation next year. We think BI would start to increase the rate in Jun 2010 by 25bps each month to 7.25% by YE10.
Although Oct09 inflation was lower than our expectation, we don’t think that it would significantly affect our full-year forecast. We are still comfortable with our inflation forecast of around 4% yoy in 2009 and likely increase to 6.3% in 2010 on the back of improvement in domestic demand, higher commodity prices, and possible increase in administered prices.
Accordingly, we still expect Bank Indonesia to maintain its policy rate flat at 6.5% for the rest of the year. We think at the current rate the monetary policy remains accommodative to economic growth, while helping anchor inflation expectation next year. We think BI would start to increase the rate in Jun 2010 by 25bps each month to 7.25% by YE10.
DBS Indocement Tunggal: 3Q09 results not encouraging (Hold prev Buy, TP Rp10,500)
At a Glance
· 9M09 net earnings of Rp1,868bn (+78% y-o-y) inline with our forecast.
· Net earnings grew 4.0% q-o-q; slight decline in EBITDA margin.
· Downgrade to Hold.
Comment on Results
3Q09 results not too exciting. INTP reported 3Q09 flat sales of Rp2,628bn despite 4.8% growth in domestic sales and more export and clinker sales during the quarter. As such, its EBITDA margin saw a slight decline to 39.8% from 40.1% in 2Q09. As INTP did some restatement of its 9M09 financial statement, we believe that 5.2% q-o-q increase in gross profit may not reflect the actual situation for the quarter. Nevertheless, the average sales/ton of the company fell 7.9% q-o-q as more export and clinker sales meant lower margin. G&A increased 12.1% q-o-q on the back of higher salary expenses.
Still in net gearing position. INTP’s balance remains healthy with net cash position. Short-term loans were Rp242bn and guaranteed by its parent company, Heidelberg Cement.
Recommendation
Downgrade to Hold. We remain upbeat on cement sales on the back of growing economic momentum. We believe that infrastructure developments will be accelerated. However, we believe that the valuation of the stock is demanding. We downgrade our call to Hold with TP remaining unchanged.
· 9M09 net earnings of Rp1,868bn (+78% y-o-y) inline with our forecast.
· Net earnings grew 4.0% q-o-q; slight decline in EBITDA margin.
· Downgrade to Hold.
Comment on Results
3Q09 results not too exciting. INTP reported 3Q09 flat sales of Rp2,628bn despite 4.8% growth in domestic sales and more export and clinker sales during the quarter. As such, its EBITDA margin saw a slight decline to 39.8% from 40.1% in 2Q09. As INTP did some restatement of its 9M09 financial statement, we believe that 5.2% q-o-q increase in gross profit may not reflect the actual situation for the quarter. Nevertheless, the average sales/ton of the company fell 7.9% q-o-q as more export and clinker sales meant lower margin. G&A increased 12.1% q-o-q on the back of higher salary expenses.
Still in net gearing position. INTP’s balance remains healthy with net cash position. Short-term loans were Rp242bn and guaranteed by its parent company, Heidelberg Cement.
Recommendation
Downgrade to Hold. We remain upbeat on cement sales on the back of growing economic momentum. We believe that infrastructure developments will be accelerated. However, we believe that the valuation of the stock is demanding. We downgrade our call to Hold with TP remaining unchanged.
DBS Bank Rakyat Indonesia: 9M09 results inline (Buy, TP Rp10,400)
At a Glance
· 9M09 net profit inline with our FY09 estimate
· NIM declined slightly, but it should stabilize. Gross NPL still slightly increase but it should normalize.
· Loan should grow strong going forwards.
· Maintain Rp10,400 based on 4X FY10 PBV.
Comment on Results
3Q09 result within expectation. BBRI’s net interest income grew 4.7% while NIM declined slightly to c.9.13% in 3Q09. Interest revenue grew 4.6% q-o-q driven mainly by strong loan growth in 2Q09 that grew 11.7% q-o-q so that 9M09 loan growth was 20.5% YTD. Interest expenses grew 4.6% q-o-q as cost of fund declined to 6.27% from 6.4% in 2Q09. Provision expenses grew 52.4% on the back by strong loan growth. Cost efficiency ratio rose to 43.0% driven by increase in operating expenses by 21.4% q-o-q.
Loans grew higher than the sector. Loans grew 5.0% q-o-q in 3Q09 driven by micro and small consumer segments. While gross NPL increased to 3.92% in 3Q09 from 3.7% in 2Q09, loan quality from medium and corporate deteriorated. However, with provision expenses in 3Q09, banks’ NPL coverage improved to 168.2%. Third party funds grew 2.1% q-o-q with CASA portion relatively stable at 57.9%.
Recommendation
Maintain Buy. Going forward, we expect loans to grow stronger. We foresee BBRI’s loans to grow 22% this year and 25% next year, higher than sector’s average. BBRI’s micro and commercial should become the main drivers. At the same time, loan quality will continue to normalize. We maintain our recommendation and forecast for the stock.
· 9M09 net profit inline with our FY09 estimate
· NIM declined slightly, but it should stabilize. Gross NPL still slightly increase but it should normalize.
· Loan should grow strong going forwards.
· Maintain Rp10,400 based on 4X FY10 PBV.
Comment on Results
3Q09 result within expectation. BBRI’s net interest income grew 4.7% while NIM declined slightly to c.9.13% in 3Q09. Interest revenue grew 4.6% q-o-q driven mainly by strong loan growth in 2Q09 that grew 11.7% q-o-q so that 9M09 loan growth was 20.5% YTD. Interest expenses grew 4.6% q-o-q as cost of fund declined to 6.27% from 6.4% in 2Q09. Provision expenses grew 52.4% on the back by strong loan growth. Cost efficiency ratio rose to 43.0% driven by increase in operating expenses by 21.4% q-o-q.
Loans grew higher than the sector. Loans grew 5.0% q-o-q in 3Q09 driven by micro and small consumer segments. While gross NPL increased to 3.92% in 3Q09 from 3.7% in 2Q09, loan quality from medium and corporate deteriorated. However, with provision expenses in 3Q09, banks’ NPL coverage improved to 168.2%. Third party funds grew 2.1% q-o-q with CASA portion relatively stable at 57.9%.
Recommendation
Maintain Buy. Going forward, we expect loans to grow stronger. We foresee BBRI’s loans to grow 22% this year and 25% next year, higher than sector’s average. BBRI’s micro and commercial should become the main drivers. At the same time, loan quality will continue to normalize. We maintain our recommendation and forecast for the stock.
Selasa, 03 November 2009
GlobalCoal Newcastle Coal Index
Monthly Index NEWC Index
Oct-2009 71.74
Sep-2009 68.16
Aug-2009 73.14
Jul-2009 75.12
Weekly Index NEWC Index
30-Oct-2009 73.48
23-Oct-2009 72.53
16-Oct-2009 70.97
09-Oct-2009 71.88
Oct-2009 71.74
Sep-2009 68.16
Aug-2009 73.14
Jul-2009 75.12
Weekly Index NEWC Index
30-Oct-2009 73.48
23-Oct-2009 72.53
16-Oct-2009 70.97
09-Oct-2009 71.88
Palmoil HQ Crude Palm Oil Futures End Flat; Output May Outstrip Exports
Crude palm oil futures on Malaysia's derivatives exchange ended flat Monday in volatile trade, with the market staying in the red for most of the day due to fears output may outstrip exports, but higher exports in October versus September helped cap losses, said trade participants.The benchmark January contract on the Bursa Malaysia Derivatives ended flat at MYR2,208 a metric ton after moving in a MYR2,154-MYR2,177/ton range.
Malaysia's October palm oil exports rose 16% from September to 1.42 million tons, according to estimates by cargo surveyor Intertek Agri Services.
Intertek had estimated exports at 1.23 million tons in September.
Similarly, cargo surveyor SGS (Malaysia) Bhd. revealed higher estimates for exports in October.
October exports were estimated at 1.43 million tons, up from 1.27 million tons in September.
Both sets of estimates fell within market expectations of 1.33-1.42 million tons.
"(The estimates) didn't exceed expectations, which was needed as participants fear output may outstrip demand," said a Kuala Lumpur-based trader.
October output is expected to rise 20% from September and end-month stocks may reach 1.8 million tons, up from 1.58 million tons, said a Singapore-based trader.
Trade was also thin because many participants were away at a conference on sustainable palm oil.
"There just weren't any buyers today. Many prefer to broker deals only when all participants are back at work. Most buyers are well-stocked for November and December delivery and are not in a hurry to make purchases for future months," said the Singapore trader.
At the conference, members of the Roundtable on Sustainable Palm Oil, which include palm oil buyers and non-governmental organizations, decided for the time being against including mandatory greenhouse emission standards for its "green" palm oil certification process.
The RSPO had previously planned to announce emission standards at its annual conference –which precedes by a month a key international gathering to set global emissions targets in Copehagen — but decided against compulsory measures.
Cash palm olein for January/February/March was traded at $675/ton. Cash CPO for prompt shipment was offered MYR30 lower at MYR2,170/ton.
A total of 18,601 lots of CPO was traded on the BMD, versus 10,571 lots Friday.
The open interest stood at 94,956 lots Monday, down from 81,429 lots. One lot is equivalent to 25 tons.
CIMB United Tractors Result note - Superior margin expansion
(UNTR IJ / UNTR.JK, OUTPERFORM - Maintained, Rp15,000 - Tgt. Rp20,500, Industrial Goods and Services)
We maintain Outperform and unchanged target price Rp20,500 (15x FY11 P/E). 9M09 net profit grew 42% yoy to Rp2.96tr, while core net profit up 34% yoy to Rp2.81tr. This is above our and consensus expectations by 7-10% largely due to lower-than-expected cost and better margins, particularly at Pama due to rapid growth in strip ratio as well as economies of scale. Pama's margins as well as the united tractors' overall consolidated margins are now one of the highest in their history. We are raising FY09 core EPS by 7% from lower cost at Pama. We still see upside in earnings especially into FY10, especially given the current undemanding margin expectations. We believe consensus earnings upgrades are imminent, which would be a catalyst for share price. So, we maintain our Outperform call and our end-2010 target price of Rp20,500 which is based on FY11 P/E.
We maintain Outperform and unchanged target price Rp20,500 (15x FY11 P/E). 9M09 net profit grew 42% yoy to Rp2.96tr, while core net profit up 34% yoy to Rp2.81tr. This is above our and consensus expectations by 7-10% largely due to lower-than-expected cost and better margins, particularly at Pama due to rapid growth in strip ratio as well as economies of scale. Pama's margins as well as the united tractors' overall consolidated margins are now one of the highest in their history. We are raising FY09 core EPS by 7% from lower cost at Pama. We still see upside in earnings especially into FY10, especially given the current undemanding margin expectations. We believe consensus earnings upgrades are imminent, which would be a catalyst for share price. So, we maintain our Outperform call and our end-2010 target price of Rp20,500 which is based on FY11 P/E.
CIMB Adaro Energy Result note - Continues to deliver
(ADRO IJ / ADRO.JK, OUTPERFORM - Maintained, Rp1,540 - Tgt. Rp1,900, Basic Resources)
Maintain Outperform on Adaro with an unchanged DCF-based target price of Rp1,900 (WACC 13%, LTG 0%). 9M09 net profit was up 412% yoy while core net profit was up 178% yoy due to a jump in ASPs. The results were 4% above our expectation and 2% above consensus, largely due to the better ASPs. We are raising our FY09 EPS forecast by 3% on the back of the higher-than-expected ASPs. 4Q09 net profit could be lower than 3Q09 because of potential production disruptions from the rainy season, but is likely to be similar to 2Q09, in our view. Operational improvements aside, a potential IPO of SIS early next year could unlock more value, we believe.
Maintain Outperform on Adaro with an unchanged DCF-based target price of Rp1,900 (WACC 13%, LTG 0%). 9M09 net profit was up 412% yoy while core net profit was up 178% yoy due to a jump in ASPs. The results were 4% above our expectation and 2% above consensus, largely due to the better ASPs. We are raising our FY09 EPS forecast by 3% on the back of the higher-than-expected ASPs. 4Q09 net profit could be lower than 3Q09 because of potential production disruptions from the rainy season, but is likely to be similar to 2Q09, in our view. Operational improvements aside, a potential IPO of SIS early next year could unlock more value, we believe.
NISP ASII Solid Performance Despite Tough Environment
• Tough environment in automotive market has not severely hurt Astra International’s performance in 9M09 where the company's revenue and net profit declined moderately by only 4.2% YoY and 3.6% YoY to Rp70.6tn and 7.1tn respectively.
• The company's revenue from automotive business fell slightly by 7.6% YoY to Rp36.7tn amid steep decline in its sales volume. Astra’s car sales dropped to 194,876 units (-17.4% YoY) while motorcycle sales faltered to 1.9mn units (-15.6% YoY). Such moderate decrease in revenue was due to Astra’s ability in implementing effective pricing strategy in order to minimize the impact of slower domestic economic growth condition on its financial performance.
• Meanwhile, the company’s financial service units managed to deliver a positive growth in revenue at Rp6.1tn, 6.7% YoY higher from Rp5.8tn in 9M08. This growth has increased the revenue contribution from financial service to 8.7% in 9M09 from 7.7% a year ago.
• For heavy equipment business, United Tractors managed to contribute a stable revenue at Rp21.3 tn (+1.3% YoY) backed by its mining contracting business that was able to post strong revenue growth at Rp11.0tn or increased by 32.9% YoY. Such growth balanced the decline in UT’s heavy equipment and coal mining units where revenue dropped to Rp8.1tn (-19.5% YoY) and Rp2.2tn (-20.1% YoY) respectively.
• Furthermore, Astra’s IT business also posted positive growth at Rp908bn or 52.0% YoY higher from Rp597bn in 9M08. Together with infrastructure and other business units, this business segment contributed Rp1.1tn of revenue to Astra International, 80.2% YoY higher from Rp616bn in 9M08.
• Nevertheless, the company’s agribusiness unit did not manage to flee from the impact of bleak condition in CPO price. The unit’s revenue tumbled to Rp5.5tn, or decreased by 18.4% YoY which was the largest decrease amongst Astra’s units. Lower CPO price and stronger Rupiah dragged down the unit’s revenue despite it managed to book higher sales volume at 767,946 tons (+8.8% YoY).
• On a quarterly basis, Astra managed to perform very well where its revenue posted 11.5% QoQ growth to Rp25.9tn in 3Q09 fueled by a recovery in domestic automotive market which pushed up Astra’s revenue from automotive business to Rp14.0tn, an 18.5% QoQ increase from Rp11.5% in 2Q09. The improvement in 3Q09 revenue has helped Astra’s net income to improve by a strong 20.8% QoQ to Rp2.9tn which was also the company’s highest quarterly net income so far.
• Overall, Astra’s 9M09 revenue and net income came in at 78.0% and 75.7% of our full year estimates and 78.2% and 85.3% of the consensus’ estimates.
• Currently the company is trading at 2010F PER of 12.4x and EV/EBITDA of 9.2x, we maintain our Buy recommendation.
• The company's revenue from automotive business fell slightly by 7.6% YoY to Rp36.7tn amid steep decline in its sales volume. Astra’s car sales dropped to 194,876 units (-17.4% YoY) while motorcycle sales faltered to 1.9mn units (-15.6% YoY). Such moderate decrease in revenue was due to Astra’s ability in implementing effective pricing strategy in order to minimize the impact of slower domestic economic growth condition on its financial performance.
• Meanwhile, the company’s financial service units managed to deliver a positive growth in revenue at Rp6.1tn, 6.7% YoY higher from Rp5.8tn in 9M08. This growth has increased the revenue contribution from financial service to 8.7% in 9M09 from 7.7% a year ago.
• For heavy equipment business, United Tractors managed to contribute a stable revenue at Rp21.3 tn (+1.3% YoY) backed by its mining contracting business that was able to post strong revenue growth at Rp11.0tn or increased by 32.9% YoY. Such growth balanced the decline in UT’s heavy equipment and coal mining units where revenue dropped to Rp8.1tn (-19.5% YoY) and Rp2.2tn (-20.1% YoY) respectively.
• Furthermore, Astra’s IT business also posted positive growth at Rp908bn or 52.0% YoY higher from Rp597bn in 9M08. Together with infrastructure and other business units, this business segment contributed Rp1.1tn of revenue to Astra International, 80.2% YoY higher from Rp616bn in 9M08.
• Nevertheless, the company’s agribusiness unit did not manage to flee from the impact of bleak condition in CPO price. The unit’s revenue tumbled to Rp5.5tn, or decreased by 18.4% YoY which was the largest decrease amongst Astra’s units. Lower CPO price and stronger Rupiah dragged down the unit’s revenue despite it managed to book higher sales volume at 767,946 tons (+8.8% YoY).
• On a quarterly basis, Astra managed to perform very well where its revenue posted 11.5% QoQ growth to Rp25.9tn in 3Q09 fueled by a recovery in domestic automotive market which pushed up Astra’s revenue from automotive business to Rp14.0tn, an 18.5% QoQ increase from Rp11.5% in 2Q09. The improvement in 3Q09 revenue has helped Astra’s net income to improve by a strong 20.8% QoQ to Rp2.9tn which was also the company’s highest quarterly net income so far.
• Overall, Astra’s 9M09 revenue and net income came in at 78.0% and 75.7% of our full year estimates and 78.2% and 85.3% of the consensus’ estimates.
• Currently the company is trading at 2010F PER of 12.4x and EV/EBITDA of 9.2x, we maintain our Buy recommendation.
NISP UNTR Started to Post A Recovery
• Amid tough environment for mining related business, United Tractors managed to post subtle growth in revenue of 0.9% YoY to Rp21.3tn from Rp21.1tn in 9M08. Such growth was mainly due to Pamapersada Nusantara (UT’s coal contracting unit) achievement to record 32.9% YoY growth in revenue to Rp11.0tn from Rp8.3tn in 9M08. This was attributable to strong production volume and also more favorable mining contracting fee during 9M09 period. Pama managed to dig 48.3mn tons of coal in 9M09, 9.3% YoY higher from 44.2mn tons a year earlier.
• The company’s strong contribution from mining contracting managed to offset the declining heavy equipment and coal mining units’ revenue contributions to UT’s total revenue. Heavy equipment’s revenue dropped by 19.5% YoY due to lower 9M09’s sales volume at 2,237 units versus 3,823 units in 9M08 (-41.5% YoY). Meanwhile, coal mining
business posted 20.1% YoY lower in revenue as Dasa Eka Jasatama, UT’s coal mining unit, produced 36.8% YoY lower of coal in 9M09 at 1.8mn tons as compared to 2.9mn tons a year ago.
• Despite the slight growth in revenue, UT’s gross profit in 9M09 jumped by 19.7% YoY to Rp5.0tn, backed by lower direct cost from the company’s mining contracting and heavy equipment business. This was seen from gross margin in mining contracting that increased to 22.4% from 12.4% in the same period amid the combination of higher
production volume during and a lower fuel cost.
• Heavy equipment business’ gross margin also helped UT’s profitability as this unit posted an increase in gross margin to 27.1% in 9M09 from 21.7%. Stronger US$ in 1Q09 had helped the heavy equipment’s margin to soar as it was sold in US$ and UT recorded the revenue in Rupiah. This was on top of gain from lower finished good’s inventory cost.
• On a quarterly basis, the company also managed to post some improvements where revenue and net income increased by 7.2% QoQ and 2.7% QoQ to Rp7.4tn and Rp1.1tn respectively amid higher sales volume.
• Overall, UT’s 9M09 revenue came in at 71% of our full year estimates and 74.9% of consensus estimates. However, the company’s 9M09 net income came in at above our expectation at 90.6% and consensus at 86.0%. We foresee that stronger Rupiah has helped UT’s to post a lower than expectation cost during 9M09.
• We put our recommendation and target price for United Tractors under review. The company is currently trading at 2010F PER of 13.7x and EV/EBITDA of 6.2x.
• The company’s strong contribution from mining contracting managed to offset the declining heavy equipment and coal mining units’ revenue contributions to UT’s total revenue. Heavy equipment’s revenue dropped by 19.5% YoY due to lower 9M09’s sales volume at 2,237 units versus 3,823 units in 9M08 (-41.5% YoY). Meanwhile, coal mining
business posted 20.1% YoY lower in revenue as Dasa Eka Jasatama, UT’s coal mining unit, produced 36.8% YoY lower of coal in 9M09 at 1.8mn tons as compared to 2.9mn tons a year ago.
• Despite the slight growth in revenue, UT’s gross profit in 9M09 jumped by 19.7% YoY to Rp5.0tn, backed by lower direct cost from the company’s mining contracting and heavy equipment business. This was seen from gross margin in mining contracting that increased to 22.4% from 12.4% in the same period amid the combination of higher
production volume during and a lower fuel cost.
• Heavy equipment business’ gross margin also helped UT’s profitability as this unit posted an increase in gross margin to 27.1% in 9M09 from 21.7%. Stronger US$ in 1Q09 had helped the heavy equipment’s margin to soar as it was sold in US$ and UT recorded the revenue in Rupiah. This was on top of gain from lower finished good’s inventory cost.
• On a quarterly basis, the company also managed to post some improvements where revenue and net income increased by 7.2% QoQ and 2.7% QoQ to Rp7.4tn and Rp1.1tn respectively amid higher sales volume.
• Overall, UT’s 9M09 revenue came in at 71% of our full year estimates and 74.9% of consensus estimates. However, the company’s 9M09 net income came in at above our expectation at 90.6% and consensus at 86.0%. We foresee that stronger Rupiah has helped UT’s to post a lower than expectation cost during 9M09.
• We put our recommendation and target price for United Tractors under review. The company is currently trading at 2010F PER of 13.7x and EV/EBITDA of 6.2x.
CLSA Bank Rakyat (BBRI IJ) on the weaker side, from Bret Ginesky
BRI reported YTD09 EPS of Rp.439, which reflected 78% of our 09CL estimates , and 27% YoY increase. However, looking at 3Q09 results alone we were not impressed with this quarter. We are awaiting a call with management to discuss the adjusted methodology for computing Cost of Fund, Daily average versus previous monthly average which by our back of the envelope estimate fuelled an approximate +60bp to 6.27% increase in COF.
The loan growth was solid, but revenues decreased by 6% (lower fee income and the cost of funds issue). The LDR (Loan to deposit ratio) increased by 202bps to 87.35% as the banks loan growth continues to outpace its deposit growth.
ROA and ROE went in opposite directions, as ROA declined by 44bps to 3.47% and ROE increased by 71bps to 34.23%. Net profit increased to Rp1.8tn
Pre provision profit down 15%
We were expecting credit to deteriorate, as we modelled a relatively high provision for 2H09. However, BBRI managed to exceed our expectations, increasing YTD provision to Rp5.4tn, vs. our 09CL estimate of Rp4.7tn. NPL/Loans increased by 22bps to 3.92% as further deterioration in
The LLR increased by 21% QoQ to Rp13.5tn as the continued credit deterioration we were projecting remains in place. We believe this is a direct result of BRI growing its non-micro loan portfolio excessively over the last 2 years.
Deposit Growth
Deposits increased by1.7% QoQ fueled by demand deposit growth of 6% to Rp38.7tn. The other deposit categories reported very little growth.
Equity
CAR decreased by 118bps to 13.5%
The bank employed more leverage in the quarter as Equity/Assets decreased by 37bps to 9.41%.
Overall, our initial thoughts from this are that BCA looks more attractive and BRI looks less attractive. We will have a full analysis tomorrow AM.
The loan growth was solid, but revenues decreased by 6% (lower fee income and the cost of funds issue). The LDR (Loan to deposit ratio) increased by 202bps to 87.35% as the banks loan growth continues to outpace its deposit growth.
ROA and ROE went in opposite directions, as ROA declined by 44bps to 3.47% and ROE increased by 71bps to 34.23%. Net profit increased to Rp1.8tn
Pre provision profit down 15%
We were expecting credit to deteriorate, as we modelled a relatively high provision for 2H09. However, BBRI managed to exceed our expectations, increasing YTD provision to Rp5.4tn, vs. our 09CL estimate of Rp4.7tn. NPL/Loans increased by 22bps to 3.92% as further deterioration in
The LLR increased by 21% QoQ to Rp13.5tn as the continued credit deterioration we were projecting remains in place. We believe this is a direct result of BRI growing its non-micro loan portfolio excessively over the last 2 years.
Deposit Growth
Deposits increased by1.7% QoQ fueled by demand deposit growth of 6% to Rp38.7tn. The other deposit categories reported very little growth.
Equity
CAR decreased by 118bps to 13.5%
The bank employed more leverage in the quarter as Equity/Assets decreased by 37bps to 9.41%.
Overall, our initial thoughts from this are that BCA looks more attractive and BRI looks less attractive. We will have a full analysis tomorrow AM.
CLSA Here is a few key highlights
Astra International (ASII IJ) - Indonesians still buying lots of cars and motorcycles. No cash for clunkers here!
Reported net profit of Rp7.1tn in 9m09, in line with expectation and accounts for 76% of our full year forecast.
The net profit of Rp7.1tn is still 4% lower than last year but seen continuation of recovery on qoq basis. Pre-tax profit was up 11% qoq and net profit up 25% qoq
BCA (BBCA IJ) - Conservative lending giant feeling more optimistic on consumer spending
As reported earnings were 100.8% of our 09CL estimate. After adjusting for one time items and a lower than anticipated provision BCA’s earnings were 76% of 09CL core estimates.
BCA is aggressively growing consumer loans (+13% QoQ) in a serious bid to become the leading consumer bank in Indonesia. Mortgage market share increased 40bps to 9.8% and continues to increase with BCA originating over Rp400bn per month. Single digit mortgage rates are supported by an inexpensive funding base, as higher yielding auto loans, credit cards and motorcycle financing (2010) will increase margins in 2H10.
BCA appears to have decided to NOT INCREASE its RESERVE/LOAN ratio to 5% as anticipated. This led to lower provisioning in the quarter and Profitability continues to outperform Asia (xJapan) peers as ROA and ROE reached 3.4% and 31.8%, respectively.
Holcim (SMCB) - A lot of houses still being built here. No first time home buyer credit. Infrastructure spending will be the upside
Reported 9M09 revenue of 4.16tn, up 53% YoY. Net income was Rp566bn, up 270% YoY
Earnings were 70% of our full year forecast of Rp820bn; in line with our expectations
But consensus is for Rp602bn, so 9M09 is 94% of consensus and the street will need to make substantial revisions
Unilever Indonesia (UNVR) - Consumer staple giant
A very respectable result given the company is having a price war with P&G in shampoos since last five months. Hindustan Unilever margins dropped by more than 600bps in 2004 when it went on a price war with P&G.
Unilever Indonesia posted excellent 9M09 results, better than our expectations. It posted Net profit of Rp2.27tn for 9M09, up 11% yoy and 83% of our full year estimates.
Summarecon (SMRA IJ) - Model township developer see strong demand
posted 9M09 result: Revenue increased by 12% YoY, GP 12% and Net Profit 46%
While Rev and EBIT met consensus expectation, 9M09 Net Profit was already met full year consensus estimate
Reported net profit of Rp7.1tn in 9m09, in line with expectation and accounts for 76% of our full year forecast.
The net profit of Rp7.1tn is still 4% lower than last year but seen continuation of recovery on qoq basis. Pre-tax profit was up 11% qoq and net profit up 25% qoq
BCA (BBCA IJ) - Conservative lending giant feeling more optimistic on consumer spending
As reported earnings were 100.8% of our 09CL estimate. After adjusting for one time items and a lower than anticipated provision BCA’s earnings were 76% of 09CL core estimates.
BCA is aggressively growing consumer loans (+13% QoQ) in a serious bid to become the leading consumer bank in Indonesia. Mortgage market share increased 40bps to 9.8% and continues to increase with BCA originating over Rp400bn per month. Single digit mortgage rates are supported by an inexpensive funding base, as higher yielding auto loans, credit cards and motorcycle financing (2010) will increase margins in 2H10.
BCA appears to have decided to NOT INCREASE its RESERVE/LOAN ratio to 5% as anticipated. This led to lower provisioning in the quarter and Profitability continues to outperform Asia (xJapan) peers as ROA and ROE reached 3.4% and 31.8%, respectively.
Holcim (SMCB) - A lot of houses still being built here. No first time home buyer credit. Infrastructure spending will be the upside
Reported 9M09 revenue of 4.16tn, up 53% YoY. Net income was Rp566bn, up 270% YoY
Earnings were 70% of our full year forecast of Rp820bn; in line with our expectations
But consensus is for Rp602bn, so 9M09 is 94% of consensus and the street will need to make substantial revisions
Unilever Indonesia (UNVR) - Consumer staple giant
A very respectable result given the company is having a price war with P&G in shampoos since last five months. Hindustan Unilever margins dropped by more than 600bps in 2004 when it went on a price war with P&G.
Unilever Indonesia posted excellent 9M09 results, better than our expectations. It posted Net profit of Rp2.27tn for 9M09, up 11% yoy and 83% of our full year estimates.
Summarecon (SMRA IJ) - Model township developer see strong demand
posted 9M09 result: Revenue increased by 12% YoY, GP 12% and Net Profit 46%
While Rev and EBIT met consensus expectation, 9M09 Net Profit was already met full year consensus estimate
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