· Krakatau Steel has delayed to announce the price for its IPO to tomorrow after the public expose. Media has reported of rumor that it will be between Rp1,000-Rp,1200 per share.
· The company will sell 3.15bn shares or 20.0% out of total shares. The company will sell another 10.0% next year as it has obtained approval from the House of Representatives to sell 30.0% of its shares to the public.
· 35.8% from total proceeds will be used to expand capacity of its steel production facility in order to support a production target of 3.5mn tons by 2013. Another 25.0% will be used to prepare land for a joint steel facility owned by KS and POSCO. 24.2% will be used for raw materials purchase and the remaining 15.0% will be used to increase ownership in its subsidiaries which operates in port management and electricity production.
· Underwriters are Bahana, Danareksa and Mandiri Sekuritas. Effective date will be on October 29, 2010. The shares will be offered November 2-4, 2010 and listed in November 10, 2010.
Senin, 11 Oktober 2010
Saratoga eyes for Arpeni (APOL, Rp108)
· It is reported that Saratoga is currently eyeing for a stake in Arpeni. The media reported the investment group will act as a stand by buyer on Arpeni’s right issue and also to buy as much as US$60mn of Arpeni’s convertible bonds.
· Despite no confirmations from both Arpeni and Saratoga, the news popped up after Arpeni’s official announcement for its US$60mn bonds and US$70mn new shares issuance plan.
· The company has met agreement with its investor for this issuance where the agreement also mentions 35% stakes acquisition. Arpeni and its investor is planning for due diligence, which will take of up to eight weeks.
· Despite no confirmations from both Arpeni and Saratoga, the news popped up after Arpeni’s official announcement for its US$60mn bonds and US$70mn new shares issuance plan.
· The company has met agreement with its investor for this issuance where the agreement also mentions 35% stakes acquisition. Arpeni and its investor is planning for due diligence, which will take of up to eight weeks.
Alam Sutera books Rp600.0bn of net revenue in 9M10 (ASRI, Rp225)
· Alam Sutera shared its revenue figure of Rp1.40tn, or net revenue of Rp600.0bn in 9M10 or 75% of the company’s 2010F target at Rp800.0obn. The company also indicated its net income will come in at Rp180.0bn assuming net margin ratio of 30%. This net income indication is 60% of the company’s 2010F net income target at Rp250.0bn. The company’s net revenue figure is 68.3% of the consensus’ expectation while net income is at 60% to the expectation.
· Meanwhile, for 2011F, Alam Sutera aims to spend up to Rp500.0bn in capex, Rp200.0bn of which is allocated for the company’s shopping mall project, Rp100.0bn for office area project and the remaining will be allocated for residential infrastructure development.
· Meanwhile, for its project in Tangerang, the company aims to complete the master plan next year in order to generate cash from this 600ha land bank.
· ASRI is trading at 2011F consensus PER of 10.2x and EV/EBITDA of 8.0x.
· Meanwhile, for 2011F, Alam Sutera aims to spend up to Rp500.0bn in capex, Rp200.0bn of which is allocated for the company’s shopping mall project, Rp100.0bn for office area project and the remaining will be allocated for residential infrastructure development.
· Meanwhile, for its project in Tangerang, the company aims to complete the master plan next year in order to generate cash from this 600ha land bank.
· ASRI is trading at 2011F consensus PER of 10.2x and EV/EBITDA of 8.0x.
NISP Summarecon optimistic to achieve Rp1.90tn revenue (SMRA, Rp1,120)
· Summarecon management shared that the company can book Rp1.90tn this year, up by 58.3% YoY from last year’s achievement of Rp1.20tn. The company’s had initially expected to make around Rp1.60tn in line with market expectation of Rp1.60tn,
· Previously the company has hinted that that it expects to book Rp165.0bn of net income in 3Q10, or 36.4% YoY increase.
· At the end of this month, the company will start sales for its Bekasi Cluster where it targets Rp200.0bn of sales.
· SMRA is trading at 2011F PER of 22.8x and EV/EBITDA of 12.9x.
· Previously the company has hinted that that it expects to book Rp165.0bn of net income in 3Q10, or 36.4% YoY increase.
· At the end of this month, the company will start sales for its Bekasi Cluster where it targets Rp200.0bn of sales.
· SMRA is trading at 2011F PER of 22.8x and EV/EBITDA of 12.9x.
NISP XL Axiata aims for second largest position (EXCL, Rp5,400)
· XL Axiata is optimistic it will book 40mn of total subscribers, which will make it hold the second largest position in Indonesia. The company has increased its target from its original expectation of 36mn subs as the company’s 9M10 data showed total subscribers of 38.5mn.
· The company has allocated US$450mn for 2010F capex in order to boost its subscribers where the company is currently supported by 21,650 units of BTS to serve its consumers.
· EXCL is trading at 2011F consensus PER of 13.7x and EV/EBITDA of 5.8x.
· The company has allocated US$450mn for 2010F capex in order to boost its subscribers where the company is currently supported by 21,650 units of BTS to serve its consumers.
· EXCL is trading at 2011F consensus PER of 13.7x and EV/EBITDA of 5.8x.
Deutsche Strategy Alert - Bank Indonesia Conf Call Summary
Deputy Governor of Bank Indonesia, Pak Budi Mulya, hosted a conf call; mostly focussed on inflation and capital inflows. On the whole, economic activity grew stronger; supported by prudent fiscal and monetary policy.
GDP growth could be at the high end of 6.0-6.3% for 2010 and he expects it to reach 6.3-6.5% in 2011. External trade is sound, BOP increase on current and capital account surplus; FX reserve US$86.6bn in Sept.
Inflation has been creeping up, mainly from volatile food prices, but BI still focuses alot on headline inflation. 2010 inflation may exceed its 5% +/-1% range slightly, hence BI recent quantitative measure (SRR up from 5 to 8%). But this should revert to 5% +/-1 % range in 2011.
Loan growth increased by 21.2% yoy in Sept. BI also share our view that as much of this growth can also be attributed to capex lending (+31% yoy). This shows that supply side expansion is responding to rising demand; hence strong loan growth isn't an immediate concern. Also, whilst loan growth had outstripped deposit (c. 17-18%), liquidity is sufficient.
BI will continue to support the policy of Rupiah appreciation. Indeed as most of exports are primary products as to manufactured products, a stronger Rupiah isn't an immediate threat to export competitiveness.
External inflow is a challenge for monetary policy esp in the context of sterilization. Offshore SBI holdings actually are higher than the level before implementation of the 1-mth holding period; now at Rp64.7tr. Still, BI doesn't think the inflow is too distributive; perhaps judging from the characteristic of the longer-dated holder.
GDP growth could be at the high end of 6.0-6.3% for 2010 and he expects it to reach 6.3-6.5% in 2011. External trade is sound, BOP increase on current and capital account surplus; FX reserve US$86.6bn in Sept.
Inflation has been creeping up, mainly from volatile food prices, but BI still focuses alot on headline inflation. 2010 inflation may exceed its 5% +/-1% range slightly, hence BI recent quantitative measure (SRR up from 5 to 8%). But this should revert to 5% +/-1 % range in 2011.
Loan growth increased by 21.2% yoy in Sept. BI also share our view that as much of this growth can also be attributed to capex lending (+31% yoy). This shows that supply side expansion is responding to rising demand; hence strong loan growth isn't an immediate concern. Also, whilst loan growth had outstripped deposit (c. 17-18%), liquidity is sufficient.
BI will continue to support the policy of Rupiah appreciation. Indeed as most of exports are primary products as to manufactured products, a stronger Rupiah isn't an immediate threat to export competitiveness.
External inflow is a challenge for monetary policy esp in the context of sterilization. Offshore SBI holdings actually are higher than the level before implementation of the 1-mth holding period; now at Rp64.7tr. Still, BI doesn't think the inflow is too distributive; perhaps judging from the characteristic of the longer-dated holder.
CLSA Timah (TINS IJ), the next rare earth?
Our diligent resource analyst Rania Rahmundita is having a look at Timah (TINS IJ), the world’s largest tin exporter.
Why TIN? Tin prices have shot up through the roof and has hit all time record high. It has been the pest-performing commodity within the metal complex this year, up 55% YTD. Due to its scarce supply and lower production; comparisons against rare earth have come in mind.
The four major producers – Indonesia, Congo, China and Peru (about 85% of total) are seeing lower productions. Indeed, the global reserves of tins has a mine life of only 16 years left! Not many substitutes either as lead is poisonous and gold, well, just too expensive.
Rania points out that TINS operating leverage is weaker than its peers, but this is perhaps priced in, as it is the cheapest, trading at 11.7x consensus earnings against average peer of 16x earnings. And with the high share price correlation with tin prices, TIN is an interesting play.
Key highlights from the report:
PT Timah is the world’s largest tin exporter and the largest producer in Indonesia, supplying 15% of global tin and ~30% of global seaborne tin.
Tin has been the best-performing within the base metal complex this year (+55% YTD). Arguably, against falling supply and depleting reserves, tin could also be considered scarce, with upside mirroring that of the rare earth complex.
While investors should be mindful of the company’s weaker operating leverage than peers, it is now still the cheapest, at slightly below its historical mean valuation of 13x forward P/E. Hence, in addition to tin price upside, there is also upside on valuations to its peak-cycle valuation of 16x P/E.
In the current world of scarcer tin, sky-rocketing tin prices, limited tin plays globally, and high share price correlation with tin prices; Timah is likely to continue to be one of the few key beneficiaries.
Why TIN? Tin prices have shot up through the roof and has hit all time record high. It has been the pest-performing commodity within the metal complex this year, up 55% YTD. Due to its scarce supply and lower production; comparisons against rare earth have come in mind.
The four major producers – Indonesia, Congo, China and Peru (about 85% of total) are seeing lower productions. Indeed, the global reserves of tins has a mine life of only 16 years left! Not many substitutes either as lead is poisonous and gold, well, just too expensive.
Rania points out that TINS operating leverage is weaker than its peers, but this is perhaps priced in, as it is the cheapest, trading at 11.7x consensus earnings against average peer of 16x earnings. And with the high share price correlation with tin prices, TIN is an interesting play.
Key highlights from the report:
PT Timah is the world’s largest tin exporter and the largest producer in Indonesia, supplying 15% of global tin and ~30% of global seaborne tin.
Tin has been the best-performing within the base metal complex this year (+55% YTD). Arguably, against falling supply and depleting reserves, tin could also be considered scarce, with upside mirroring that of the rare earth complex.
While investors should be mindful of the company’s weaker operating leverage than peers, it is now still the cheapest, at slightly below its historical mean valuation of 13x forward P/E. Hence, in addition to tin price upside, there is also upside on valuations to its peak-cycle valuation of 16x P/E.
In the current world of scarcer tin, sky-rocketing tin prices, limited tin plays globally, and high share price correlation with tin prices; Timah is likely to continue to be one of the few key beneficiaries.
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