● Indonesia’s February domestic cement data continued to maintain its strong YoY growth of 13%, despite a drop in MoM due to the shorter number of days. On a YTD basis, the data jumped 13% YoY.
● Geographically, we continued o see Java areas (led by east and central Java) outperforming other regions. Meanwhile, Sumatra posted the weakest growth.
● After maintenance, SMGR’s plants have started to operate normally, the reason for the recovery in market share. Holcim Indonesia posted the highest growth on YoY, due to the low-base, although the trend has been declining in the past four months.
● Interestingly, despite Indonesia’s cement price (ASP) being high by regional standards, we see its ASP rising in the past three months by 3%, driven by non-Java and Sumatra areas.
● We continue to maintain our OVERWEIGHT stance on the sector.
Our top picks are Indocement, due to its quality and growth profile, and Semen Gresik, on valuations.
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