Mandiri Sekuritas Sumalindo: EGM results and debt restructuring plan (SULI, Rp108, Not rated)

Sumalindo is a plywood manufacturer with Rp266bn market cap.
􀂄 EGM results: SULI’s EGM yesterday decided that the company agreed to its president commissioner resignation (Ambran Sunarko) and replaced him with Wijiasih Cahyasasi. The company also decided to retain the President Director (Amir Sunarko) and Director (David), even though both of them become the suspect in illegal logging
accusation by Kutai police office.
􀂄 Debt restructuring plan: the company is also asking its creditors to restructure the outstanding debts. As of June 30’ 2010, the company has debt matured in 2010 amounting to Rp475bn while the cash position was only Rp29bn and equity position of only Rp268bn. During 1H10, the company’s operating cash flow is minus Rp55bn as it posted operating loss of Rp53bn. The company posted net gearing level of 4.4x as of June 30’ 2010.
􀂄 Currently, there is no analyst covers SULI stock. The stock price has increased by 9.1% this month.

Mandiri Sekuritas Charoen Pokphand : Launching buyback program (CPIN, Rp7,650, Not rated)

Charoen Pokphand Indonesia (CPIN) will launch a buyback program with maximum amount of Rp50bn to buy a maximum of 7mn shares (implying a maximum price of Rp7,143/share). CPIN share was closed yesterday at Rp7,650/share. Impact on the buyback if it is fully exercised at Rp7,600/share on proforma June 30, 2010 is higher ROE by 43bps from 29.15% to 29.58%. Buyback shares will not be resold and will be used to reduce paid up capital. CPIN will hold its EGM on October 19, 2010 to get shareholders approval on the buyback program and its planned stock split. We did not have a rating on the stock. At current share price, CPIN is traded at PER11F Bloomberg consensus of 13.0x, and EV/EBITDA11F of 8.8x.

Mansek BW Plantation:1H10 results were below consensus estimates (BWPT,Rp820,Not rated)

BWPT reported 1H10 net income of Rp86bn (-20.1%yoy),represented 34.4%of consensus estimates.These results were below consensus expectation due to decrease in CPO production volume by 16.6%yoy from 46,339 ton in 1H09 to 38,663 ton in 1H10,which resulted a decrease in CPO sales volume by 16.8%yoy from 47,426 ton in 1H09 to 39,438 ton in 1H10.The main reason of decrease in CPO production was seasonality and bad weather.
At current price,BWPT is trading at 2010 Consensus and 2011Consensus PER of 12.7x and 11.1x.

Mandiri Sekuritas BFI Finance Indonesia: Takeaway from Analyst Meeting (BFIN, Rp2,350, Not Rated)

􀂄 During the analyst meeting yesterday, BFI Finance highlighted 1H10 results whereby net profit grew by 29% yoy to Rp177bn despite a decline in revenue by 6% yoy to Rp441bn. This was mainly enabled by lower operating expenses (-27% yoy to Rp208bn) as the company did not allocate provisioning for bad debt in 1H10 vs Rp41 bn in 1H09.

􀂄 The company's new booking was actually quite strong at Rp1.8 tn in H10 from Rp838bn in 1H09, however tighter competition and lower interest rate environment caused yield to decline which affecting revenue. The company targets new booking to reach Rp3.5 tn this year (+70% yoy) as it see strong demand across all business segment including demand for heavy equipment leased in 2H10.

􀂄 At current price, BFI is trading at 2010F PER of 5.0x and P/BV of 1.1x. We have no rating on this counter.

Mansek Gajah Tunggal:Net income up 186.8%yoy (GJTL,Rp1,230,Not Rated)

Net sales 1H10 was Rp4.8tn (+27.3%yoy)due to strong volume growth.The company targeted net sales may up by 20- 25%this year,due to increasing demand from Michelin.Demand from Michelin in FY09 was 1.9mn unit,in FY10F was 3mn units and up to 5mn unit in 2011.

Around 40%of sales contributed from export.In FY09 the company sales radial totaling 7.6mn unit,bias tire was 3.5mn and motorcycle tire was 16.9mn unit.

Gross margin 1H10 up to 20.7%from 15.9%in previous year due to successful managing of raw materials costs and
passing on some of the increases to customers as well as a higher margin product mix.Resulted net income 1H10 totaling Rp415bn (+186.8%yoy).

We don ’t cover GJTL,currently only 1 analyst cover it.Based on consensus,it trades at PER10F of 7.3x.

Mansek Bukopin:1H10 earnings increased by12.9%yoy (BBKP,Rp650,Not Rated)

BBKP reported earnings increased by 12.9%yoy to Rp226.6bn in 1H10,as the bank managed to reduce its interest expense by -22.3%yoy,despite slow down in interest income of -5.0%yoy due to low credit expansion (+5.2%).This brought net interest income to Rp868.3bn (+25.7%yoy).

However,third party fund grew by 21.2%to Rp21.5tn supported by strong growth in demand deposits and savings by 34.1%and 37.6,respectively.As a result,NIM is resided at 4.85%increased from 4.17%from same period last year.

NPL gross was recorded at 2.85%,declined from 3.96%in 1H09,as reduction in bad debt,especially on its commercial portfolio by -25.6%. Meanwhile LDR was at 80.3%(vs 93.7%1H09)and ROE 18.2%(vs.19.7% 1H09)

As per yesterday ’s price,BBKP trades at P/BV 1.5x and trailing-PE10 10x. There is no analyst covering the stock at the moment.

Mansek Lippo Karawaci:LPKR 1H10 sales result meets 42%of 2010 target (LPKR,Rp490,Not Rated)

LPKR released its 1H10 marketing sales result,which booked Rp849bn,or 42%of their targeted sales this year.Housing sales contributed the majority of the book,covered 64%(Rp545bn),mainly from its Lippo Cikarang (Rp262bn)portfolio, followed by Karawaci (Rp159bn).Condominium portfolio shared Rp304bn of sales,to split the contribution,40.1%and 59.7%,respectively.

In the remaining year,the company plans to launch 2 new apartment towers,each in St Moritz and Kemang Village, which expect to meet their condominium sales target of Rp960 this year.The company set Rp2,030 bn marketing sales target this year,with housing sales will be their main contributor.

As per yesterday ’s closing price,LPKR trades at 66%discount to their internal NAV,with consensus PE10 16.4x.We don ’ t have rating on the stock.

Mansek Intiland Development:DILD reported earnings boost (DILD,Rp550,Not Rated)

DILD recorded earnings surge for its 1H10 result,to reach Rp223bn from only Rp6bn in the same period last year,which above consensus estimates (76.1%).The net profit jump was a result from boosted revenue by +134.0%to Rp455bn, majorly contributed from their low yield assets which covered 53.2%of total revenue.

As of 1H10,DILD has posted Rp587.8bn total marketing sales,58.8%from target sales this year,as achievement in solid housing sales in Taman Semanan Indah (34.4%)and Graha Famili (26.0%),besides contribution from 1Park Residences apartment units (30.8%).

Company has conducted 2:1 stock split which commenced yesterday.This should be positive for company,especially in creating more liquidity to the stock trades,yet cheaper in line with other property stock nominal price in the market.As per yesterday ’s closing price,DILD is trading at 42%discount to its internal NAV10,and consensus PE10 19.6x,in compared to our property basket which currently at an average of 57%trading discount to our NAV10 and PE10 average 22.8x

Mansek Pembangunan Perumahan:Obtained new contract bookings of Rp2.6tn (PTPP,Rp770,Not rated)

The company has obtained new contract worth Rp2.6tn up to current,it only represent 20%from its FY10 target of Rp13tn.In 2H10,they are aiming to get 3 power plant contracts worth Rp6.2tn,aside from its own 2x150MW power plant projects worth Rp3.6tn.They targeted the project to start in October 2010.

The company indicated that 1H10 net profit will be more than double compared to 1H09 of Rp11.3bn,despite slightly lower revenue.This is due to higher income from joint operation project,thus reflected better margin. As for FY10,they are aiming to book revenue and net profit of Rp6.7tn and Rp335bn,respectively.Note that their latest net profit target is lower from its previous target of Rp359bn,despite of higher revenue from previously Rp6.3tn.

Mansek BW Plantations:takeaway from a company visit (BWPT,Rp730,Not rated)

BWPT is an oil palm plantation company with focus on upstream business.As of 30 June 2010,BWPT managed 46,048 ha oil palm plantation.Its nucleus area of 42,632 ha represents 92.6%of total area.Meanwhile,its mature area of 15,270ha represents 33.2%of total area.Average age of plantation is 9.8 years old.

Although BWPT ’s 1H10 CPO production decreased by 16.6%yoy to 38,663 ton,BWPT still positive to achieve FY10F CPO production growth of 10%yoy.

BWPT targets to achieve CPO production growth of 12%in 2011,25%in 2012 and 30%in 2013.The main driver of this growth is higher FFB yield due to more plantation area that enter into peak production phase.

BWPT ’s CPO ASP increased from Rp6,211/kg in 1H09 to Rp6,502/kg in 1H10.The Average Sales Price gap between BWPT and AALI narrowed due to BWPT ’s jetty has been completed.In 1H09,AALI ‘s ASP was Rp 6,386/kg vs BWPT ’s ASP of Rp6,211/kg.In 1H10,AALI ’s ASP was Rp 6,590/kg vs BWPT ’s ASP of Rp6,502/kg.

We have yet covered BWPT.Currently,BWPT trades at FY10F PER of 11.3x and FY11F of .8x based on consensus estimates. Plantation Industry in Indonesia trades at FY10F PER of 12.9x and FY11F PER of 11.2x.

Mansek Bank Jabar-Banten:BJBR earnings increase by 37.5%(BJBR,Rp1200,Not Rated)

BJBR reported net profit of Rp548.3bn for its 1H10 result,an increase of 37.5%yoy,which was slightly above the consensus estimates (58.6%).The earnings jump was resulted from the strong net interest income which grew by 28.8%yoy to Rp1.3tn,as loan expanded by 14.1%yoy to Rp20.4tn.

The bank ’ s third party fund recorded at Rp32.1tn (+38.4%),which time deposits covered the majority (56.0%),hence NIM only slightly increased to 7.7%(vs.7.5%1H09).Gross NPL was at 1.86%,double from 0.99%1H09,as new bad debt recorded on each segments,including SMEs,non SMEs and property.

Based on consensus,BJBR is currently trading at 2011F P/BV of 2.1x,and PER of 10.8x,while our bank stocks trades at an average of 2.8x and PE11 11.2x,respectively.

Mandiri Sekuritas Modern Internasional : Indonesia’s 7-11 (MDRN, Rp740, Not rated)

􀂄 Starting out 7-11. MDRN through its subsidiary, MPRI obtained the rights and license to develop and operate “7-Eleven” brand convenience store outlets in Java island,Indonesia for twenty (20) years period and extension period for ten (10) years. MDRN currently has 6 7-11 stores, and plan to have 24 stores by end 2010. In 2011, MDRN planned to open another 36 stores. MDRN investments in infrastructures are to accommodate 300 stores. MDRN which currently managed 1,000 stores of Fuji Image Plaza (FIP) with 100 stores owned, plans to gradually launch 7-11 by converting feasible FIP stores,allowing faster deployments.

􀂄 Progress so far, has been good. MDRN put a target of 1,000 transactions/store/day with average ticket of Rp 25,000- Rp30,000 with gross margin aimed at 28%. Results from t he 6 stores so far has been encouraging, with tickets averaging north of 1,000/day and gross margin of 30-35%. Around 75% of the revenue is coming from food and beverage. MDRN estimates its 7-11 stores to book net margin of 5%, better than current FIP stores of 3%. MDRN paid upfront fees of US$1.5mn and royalty fee from revenue at less than 1%.

􀂄 Question: how to finance capex. MDRN has Rp250bn in debt, with Rp329bn in eguity and Rp10bn of cash by end FY09. Assuming Rp3bn capex/stores, MDRN has to provide Rp54bn capex in 2010, and Rp108bn in 2011. Asset turnover in 2009 was 1.1x and operating margin 1.7%. With other business pulling down the performance, capital rising is need as the operational performance is difficult to service interest payment even if the ratios improved. Assuming asset turnover of 1.5x and operating margin of 5%, the return on invested capital is just 7.5%.

􀂄 Valuation: earnings has to catch up. MDRN made a profit of Rp12bn (EPS: Rp19), a 84.0% yoy increase, with operating income of Rp16bn (-66.1% yoy). At Rp740/share, MDRN is trading at 38.9x FY09 PER and 1.4x FY09 P/BV.

Mandiri Sekuritas Intiland Development: DILD reports net profit jump for 1Q2010 performance (DILD, Rp990, Not rated)

􀂄 DILD reported surged in net profit to reach Rp85 bn for 1Q2010 performance, compared Rp3 bn last year during the same period, as a result from the residential sales and inventory sales of the company’s assets that give only low single digit yield to the company, which provide greater margin. The company will continue to divest its inventory assets this year (about 15 ha), to expect quadruple increase in revenue from 2009 levels (Rp386.8 bn FY09), despite contribution from the sold out 108 units of the 3 towers planned 1Park apartment, worth ±Rp152.5 bn and other recurring income of its investment properties which as per Des09 contributed 30.4% of the total revenue. Currently, the company has total land bank of 1,400 ha.

􀂄 Over the next 3-4 years, the company intends to develop mixed use high-rise properties which include a Simatupang project as well as projects in Tangerang and in Pantai Mutiara. The company expects to generate revenues of about Rp14tn over the
period.

􀂄 The company is currently has an outstanding warrant of Rp1tn (sweetener from the recent rights issue) or equivalent 18% of the outstanding shares, which can be exercised on 22 Oct 2010 at Rp1,050/share. Based on latest colliers’ revaluation on the land bank, NAV of the company stood at Rp1,798/share, which the current price trading at 45% discount. The company is set to have a re-appraisal of the assets within the next couple of weeks. There is no analyst coverage on the stock.

Mandiri Sekuritas Intiland Development: Key takeaways from company visit (DILD, Rp1,060, Not Rated)

􀂄 The company is now on the on going process of the transformation of the business, which divesting its matured land bank that contributes only single digit yield to the company, and replace with new land banks, which the company has acquired recently, including Tangerang (500 ha), Banten (1,092 ha) and TB Simatupang (7 ha), which the fund sourced from the right issue (Rp2,07 tn) conducted at the beginning of the year. The company’s total land bank now is 2400 ha, which partly under joint venture agreement with other third parties (2,250 ha -net).

􀂄 In 2010, the company expects quadruple its revenue from 2009 levels (Rp386.8 bn FY09), with the sale of its old land banks (about 15 ha). Moving forward, the company intends to develop mixed use high-rise properties which include a Simatupang project as well as projects in Tangerang and in Pantai Mutiara. Over the next 3-4 years, the company expects to generate revenues of about Rp14tn.

􀂄 The company is currently has outstanding warrant of Rp1tn (sweetener from the recent rights issue) or equivalent 18% of the outstanding shares, which can be exercised on 22 Oct 2010 at Rp1,050/share. Based on latest colliers’ revaluation on the land bank, NAV of the company stood at Rp1,798/share, which the current price trading at 41% discount. The company is set to have a re-appraisal of the assets within the next couple of weeks. There is no analyst coverage on the stock.

Mandiri Sekuritas Pembangunan Perumahan: 1Q10 net profit jumps 26.2% yoy (PTPP, Rp710, Not rated)

􀂄 PTPP’s 1Q10 top line level dropped 18.9% yoy to Rp561bn. However, net profit grew 26.2%yoy to some Rp15bn, given better margins. 1Q10 financial figures reflects around 8-10% from Bloomberg consensus FY10 target. On the balance sheet level, we noticed that cash position increased to Rp525bn (from Rp75bn in 1Q09), as well as inventory level to Rp1.3tn from Rp269bn in 1Q09. The company targets FY10 revenue and net profit to reach Rp6.5tn (+54.6% yoy) and Rp359bn (+120.2% yoy), respectively. The target reflects PER10F of 9.6x, which is relatively similar with average construction companies.

PTPP 1Q10 Results
Rp bn 1Q10 1Q09 yoy (%)
Total revenue 561 692 -18.9
Gross profit (Loss) 48 55 -12.4
Operating profit (Loss) 44 39 12.9
Pre-tax profit (Loss) 31 22 39.4
Net profit (Loss) 15 12 26.2
Gross margin(%) 8.5 7.9
Operating margin (%) 7.9 5.6
Pre-tax margin (%) 5.6 3.2
Net margin (%) 2.7 1.8

Mandiri Sekuritas Alam Sutera: ASRI 1Q2010 earnings surge (ASRI, Rp215, Not Rated)

􀂄 ASRI reported 743% jump in net profit for its 1Q2010 result of Rp63bn, above the consensus estimate (+12.8%). As resulted from major contribution of the commercial area sales last year (70% of total sales) the company enjoyed better net profit margin this quarter(30% 1Q10 vs 14.6% 1Q09), which led to boost up in bottom line.

􀂄 In 2010, despite its further focus on the development of its commercial area, the company will develop some other more investment properties, including fashion mall and the extension of its current success flavor bliss dining area. As per 1Q10, the company recorded Rp1.2tn marketing sales, thus running above its FY10F target (37% of FY10F).

􀂄 Based on recent revaluation of the landbank (Rp8.3 tn), ASRI is now trading at 51.6% discount to its NAV. We don’t have recommendation on the stock.

Mandiri Sekuritas Bank Mandiri: 1Q2010 net profit jumped by 43.1% yoy (BMRI, Rp5,300, Not Rated)

􀂄 Bank Mandiri reported a 43.1%yoy surge in net profits in 1Q10 to reach Rp2tn, in line with consensus estimates.

􀂄 BMRI’s 1Q10 net interest income increased by 5.5% yoy, however, the bank managed to have operating income of Rp6tn (+8.0% yoy), driven by strong increase of Non-Interest Income by 17.4%, as fee based income surged by 30.9% yoy. Although the bank posted a positive NII, NIM ratio declined to 5.2% (vs. 5.5% 1Q09), mainly caused by the drop in FX loan yields, which has given the bank absorbed lower spread.

􀂄 The bank maintained its NPL at low 2.6% (vs 2.6% FY09), despite a sustainable growth of gross loan (+2.4% qoq), which booked as upgrades and write-offs dominated the movements, led to provisioning recorded at moderate Rp692bn (-49.7%yoy). Coverage ratio remained high at 219.1%, while CAR is 17.0%, LDR 64.1% and ROE 30.1% (vs 15.6%, 59,2% and 21.8% FY09, respectively). In reporting its 1Q10, the bank’s management said that about 90% of the newly PSAK 50 – 55 reporting requirement has been met, and any remainder would not give any major impact on the books. At
present, BMRI is trading at P/BV10F of 2.8x and PER10F 13.4x. We do not have a recommendation on the stock.

Mandiri Sekuritas Bank Tabungan Pensiunan Nasional: BTPN 1Q2010 Result Increased Significantly (BTPN, Rp7,850, Not Rated)

􀂄 BTPN posted a significant increase in Net Profit of its 1Q2010 result to reach Rp154.6 bn (+165.2% yoy), which within our expectation based on the projection of our Bonds report and the consensus estimates.

􀂄 BTPN’s net interest income for 1Q2010 is reported at Rp782.2 bn, a 127.6% increase as the result from higher portion of its micro loan that gives higher margin for the bank, which this is reflected on the NIM figure that arrived at 14.9% (vs. 12.2% FY09 and 9.8% 1Q09.

􀂄 The bank booked gross loan of Rp17.7 tn (+12.7% qoq), which expected as the bank plans to gain more contribution from the micro loan this year. NPL is figured at 1.5% (vs. 0.5% Fy09), while ROE is 30.3%, LDR 87.5%, CAR 17.6% (vs. 23.0%, 84.9% and 18.5% for FY09, respectively. The bank plans to issue Rp750 bn conventional bonds on the 2Q this year, which aimed to support its long term funding. Third party funds of the bank is currently Rp20,2 tn (+9.1% qoq).

􀂄 Based on Bloomberg consensus, the bank is currently trading at P/BV10 3.0x and PER10 15.9x. We don’t have recommendation on the counter.

Mandiri Sekuritas Alam Sutera: ASRI Indicates a Surge in 1Q2010 Results (ASRI, Rp205, Not Rated)

􀂄 ASRI hints to post a surge on its 1Q2010 net profit as a result from the marketing sales hikes in 2009 that reached to Rp1.0 tn, compared to Rp492 bn in 2008. On the phone discussion with company’s corporate secretary yesterday, it is indicated that the revenue will be booked at around Rp200 bn (+290% yoy), thanks to higher margin from commercial area sales that booked around 70% of the total marketing sales last year, which slid to the bottom line to post around Rp72.5 bn (+866.7%)

􀂄 In 2010, the company sets its marketing sales Rp1.2 tn, a 20% increase of the 2009’s figure, that mainly be focusing on the development of 2 shophouses projects, Pasar 8 modern market and 300 units residential of Sutera Renata cluster on the 23 ha land bank. As per Mar10, the company has booked of total Rp458bn marketing sales, or 38% of total target this year

􀂄 Based on Bloomberg consensus, ASRI is currently trading at PER10 15.5x and P/BV10 3.5x. We still don’t have rating on the stock

Mandiri Sekuritas Bakrie and Brothers: FY09 performance below consensus, net loss Rp1.6tn (BNBR, Rp70/share, Not rated)

􀂄 Bakrie and Brothers posted FY09 net loss of Rp1.6tn, an improvement from FY08 net loss of Rp16.5tn as the company in FY08 booked Rp17.1tn loss from investment on subsidiaries sale.

􀂄 From the operational side, the company yoy performance worsened with revenues declining by 9.0%yoy due to 20%yoy revenues decline from UNSP, but offset by 25%yoy revenue growth from BTEL. Operating profit declined by 43.9%yoy due to decline in UNSP operating profit by 38%yoy and BTEL by 24%yoy.

􀂄 However, the main reasons of the poor 4Q09 net income were (1) loss from ENRG where ENRG posted Rp1.4tn loss in 4Q09 due to debt restructuring and financing charges, (2) interest expense of Rp821bn (+720%qoq), and (3) allowance from asset revaluation of Rp237bn.

􀂄 We have no coverage on the stock. Based on consensus, the stock is trading at PER10F of 17.2x