Bank Indonesia has just released data on commercial banks as of Jun10. Except for deposit rates which trended up, other indicators remained strong with loans growing by 18.8% yoy and NPL falling to 3.0% in Jun10. Meanwhile, even though some state banks saw increasing NPLs, we expect this to improve in the forthcoming quarters, justifying our ! overweigh t stance on the sector. BBRI remains to be our top picks.
Loans remained strong... Commercial banks reported strong loan growth of 9.0% qoq in 2Q10 bringing total loan growth to 18.8% yoy. Rupiah loans posted higher growth of 21.5% yoy vs. 5.0% yoy for forex-denominated loans. Of the total loans, investment loans posted the highest growth of 25.2% yoy followed by consumer loans (+ 25.0% yoy). This showed that investment climate has improved (which will increase the capacity in the economy) and consumer demand remained strong. The breakdown by sector showed that the highest growth stemmed from social services (i.e. school and hospitals) and minin! g sector. We expect loans to grow by 20.0% yoy for FY10F with consumer loans still posting the highest growth of between 20-25% yoy.
… and NPLs improved. In contrast to some large banks which posted increasing NPLs, NPLs for commercial banks improved to 3.0% as of end Jun10 from 3.4% at end Mar10. This trend also was seen on NPLs from SME segment, which fell from 3.3% at end Mar10 to 2.8% at end Jun10. Looking at these figures, there should be no worries on commercial banks’ performance in Indonesia. We, in fa! ct, expect NPLs from banks under our coverage to fall to 2.9% at end Dec10 from 3.5% in Jun10.
However, deposit rates has trended up. However, the one-month time deposit rate has showed an increasing trend from 5.6% in Mar10 to 6.6% in Jun10 compared with a decline in average 1 month SBI rate from 6.4% to 6.3%, respectively. We believe this was partly triggered by strong loan growth during the quarter. We expect such rate to sustain toward the end of the year as our economist also projected an increase of 50bps in SBI rates in 4Q10.
Maintain BBRI as our top picks. Among banks under our coverage, we maintain BBRI as our top picks. We still like BBRI as it continues to record strong NIM and ROAE.
Kamis, 19 Agustus 2010
Citigroup Indosat - Heading for a Consensus Miss
v Downgrade to Sell — We cut our rating to Sell from Buy with a new target price of Rp4000 based on our DCF model. Our downgraded EPS estimates are 46-54% below consensus on higher depreciation, opex and interest as we think the street is too optimistic on Indosat’s prospects in the absence of active company guidance. Release of a weak 2Q10 numbers may act as a catalyst for de-rating.
v Elevated cash capex will weigh on performance — Management recently guided for cash capex to reach US$1-1.2bn for FY10 as compared to its guided budgeted capex of US$550-700m as previous years’ capex backlog is filled. This will weigh on network, depreciation and financing charges as well as NPV in the absence of material revenue uplift from network expansion due to competition.
v Rising gearing levels — Given the material cash capex requirements, we find the company needing to further tap the debt market contrary to regional trends of deleveraging and capital management for telcos. We see gearing further rising to a
high 1.4x for FY10 from 1.2x in FY09. This high degree of leverage should prevent the company from any meaningful return of capital over the next 3 years.
v No growth, low yield, no recovery yet — Due to increased network and financing costs, we see FY10 profits diving 43% YoY. Room for recovery for FY11 will be limited given continued cost pressures and slowing revenue growth on market saturation and competition. Amongst the Asian telcos we cover, Indosat presents the weakest earnings growth momentum combined with soft yield for FY10-12.
v No sign of a revenue turnaround — Our channel checks yield no material improvement on Indosat to signal a turnaround in revenue/subscriber momentum. Without revenue outperformance, we see limited capacity to lift profit and EBITDA margins. This makes it particularly expensive at 28x FY10-11 PER with a yield of just 2%. With this report, we transfer coverage of Indosat to Arthur Pineda.
v Elevated cash capex will weigh on performance — Management recently guided for cash capex to reach US$1-1.2bn for FY10 as compared to its guided budgeted capex of US$550-700m as previous years’ capex backlog is filled. This will weigh on network, depreciation and financing charges as well as NPV in the absence of material revenue uplift from network expansion due to competition.
v Rising gearing levels — Given the material cash capex requirements, we find the company needing to further tap the debt market contrary to regional trends of deleveraging and capital management for telcos. We see gearing further rising to a
high 1.4x for FY10 from 1.2x in FY09. This high degree of leverage should prevent the company from any meaningful return of capital over the next 3 years.
v No growth, low yield, no recovery yet — Due to increased network and financing costs, we see FY10 profits diving 43% YoY. Room for recovery for FY11 will be limited given continued cost pressures and slowing revenue growth on market saturation and competition. Amongst the Asian telcos we cover, Indosat presents the weakest earnings growth momentum combined with soft yield for FY10-12.
v No sign of a revenue turnaround — Our channel checks yield no material improvement on Indosat to signal a turnaround in revenue/subscriber momentum. Without revenue outperformance, we see limited capacity to lift profit and EBITDA margins. This makes it particularly expensive at 28x FY10-11 PER with a yield of just 2%. With this report, we transfer coverage of Indosat to Arthur Pineda.
Rabu, 18 Agustus 2010
DBS Indosat: Hold; Rp4,550; TP Rp5,500; ISAT IJ
2Q10 below market expectations
Indosat's 1H10 result highlight was released yesterday. 2Q10 EBITDA of Rp2.4tr (up 6.8% qoq) was inline with our expectations but below market expectations. Net profit of only Rp9bn (down 96.7% qoq) was much below our and market expectations. While the company did not indicate the reason for lower profit, we believe that higher depreciation and forex losses could be the key reasons.
EBITDA margins improved to 48.9% in 2Q10 from 47% in 1Q10, due to cost cutting efforts. Operationally the company added only 0.1m cellular subscribers, disappointing but mostly expected after over 6m additions in 1Q10. Full results would be released on 24th August followed by conference call.
Indosat's 1H10 result highlight was released yesterday. 2Q10 EBITDA of Rp2.4tr (up 6.8% qoq) was inline with our expectations but below market expectations. Net profit of only Rp9bn (down 96.7% qoq) was much below our and market expectations. While the company did not indicate the reason for lower profit, we believe that higher depreciation and forex losses could be the key reasons.
EBITDA margins improved to 48.9% in 2Q10 from 47% in 1Q10, due to cost cutting efforts. Operationally the company added only 0.1m cellular subscribers, disappointing but mostly expected after over 6m additions in 1Q10. Full results would be released on 24th August followed by conference call.
Credit Suisse Indosat (ISAT IJ, BUY, TP IDR 5,900)
Pricing in low expectations
Indosat is scheduled to report its consolidated Q2 2010 results on August 19 and we expect a recovery in revenue growth as Indosat monetizes the strong growth in net subscriber additions acquired in Q1 (+36% QoQ) by cross-selling data and other services to its subscribers. Coupled with cost and capex discipline initiatives to improve operating efficiencies, we expect Indosat to yield margin improvement in the coming quarters. In addition, Indosat has begun to increase its presence in selected non-Java markets and this is also expected to contribute to top-line growth. The market in pricing in low expectations for the restructuring at Indosat and we expect increasing signs of a sustainable operational turnaround at the quarterly results as a key catalyst for the stock.
Upgrade to BUY
The share price of Indosat has corrected over 20% since we downgraded the stock in May. We are upgrading Indosat to a BUY recommendation due to the attractive valuations. We maintain our view on Indosat being a restructuring story and forecast EBITDA margin to reach 46.5% in FY 2010 before improving further to 48% in FY 2011. We maintain our HOLT-derived 12M target price of IDR 5,900, implying an undemanding one-year forward P/E of 13 and trading at a discount to its peers and the broad market.
Indosat is scheduled to report its consolidated Q2 2010 results on August 19 and we expect a recovery in revenue growth as Indosat monetizes the strong growth in net subscriber additions acquired in Q1 (+36% QoQ) by cross-selling data and other services to its subscribers. Coupled with cost and capex discipline initiatives to improve operating efficiencies, we expect Indosat to yield margin improvement in the coming quarters. In addition, Indosat has begun to increase its presence in selected non-Java markets and this is also expected to contribute to top-line growth. The market in pricing in low expectations for the restructuring at Indosat and we expect increasing signs of a sustainable operational turnaround at the quarterly results as a key catalyst for the stock.
Upgrade to BUY
The share price of Indosat has corrected over 20% since we downgraded the stock in May. We are upgrading Indosat to a BUY recommendation due to the attractive valuations. We maintain our view on Indosat being a restructuring story and forecast EBITDA margin to reach 46.5% in FY 2010 before improving further to 48% in FY 2011. We maintain our HOLT-derived 12M target price of IDR 5,900, implying an undemanding one-year forward P/E of 13 and trading at a discount to its peers and the broad market.
A Cup of Tea 18 Aug'10
The Dow Jones industrial average rose 103.84, or 1 percent, to 10,405.85. Investors had some good news from the latest inflation reading. Prices at the wholesale level rose 0.2 percent last month. This was the first increase in producer prices since March and matched expectations of economists polled by Thomson Reuters. Excluding volatile food and energy costs, the index rose 0.3 percent in July, more than the 0.1 percent growth predicted by economists.
Our market still on consolidation, but will close positive. Telco, metal and bank will be a trigger for today. Some shares like INCO, ANTM, TINS, TLKM, BBNI and BBRI will support our market. BoW on Indosat, BDMN, SMGR, ASII, LSIP and PTBA.
PTBA was looking attractive for medium term investment.
ISAT subscriber Indosat recorded 37.8 million, up 34.5 percent
ISAT recorded a decline in net profit in 1H10 amounted to 71.5 percent when compared to the same period the previous year. Net profit in 1H10 amounted to Rp287, 1 billion or decrease up to Rp720 billion compared to the same period in 2009 and then recorded to reach Rp1, 007 trillion.
Operating revenues increased by Rp9, 66 trillion, up 5.8 percent compared with the 1H09, an increase of 4.1 percent compared with 1Q10 achievement that only Rp4, 73 trillion.
Cellular business to grow at 7.7 percent compared to 1Q10, or 14.4 percent compared with 1H09.
Outstanding earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to Rp4, 6 trillion, up 6.8 percent yoy. EBITDA improvement was driven programs pursued cost efficiency and company management.
Moreover, to position the company currently reaches debt also increased by 8.9 percent or Rp24, 7 trillion yoy.
Total cellular subscriber Indosat recorded 37.8 million, up 34.5 percent yoy.
I think at this level ISAT is very attractive for medium term investment. Indosat would continue to implement its strategy of acquiring value customers and would focus to improve its ARPU mix by retaining a larger share of medium to high end customers. Indosat expects to achieve growth in the wireless segments of ex. Java regions while growth in Java would be primarily broadband driven. The new management team is also actively crunching operating costs and capex. Rising EBITDA should facilitate Indosat’s first ever positive cellular operating free cash flow (OPFCF) result in FY10, positive consolidated OPFCF and positive consolidated free cash flow to equity. Now ISAT trade at 14.15x PE’10 and 11.84x PE’11 (EPS Consensus). Maintain Buy ISAT, I put target price for ISAT at IDR 5586 (14.3x PE’11 consensus).
Are we quite tired @ BUMI? ... HOLD
PT Bumi Resources Tbk (BUMI) is expected to record net profit increase very significantly in the second quarter-2010.
The increase in net profit is donated by the increase in revenue. The Company is also expected to record gross profit margin increase from 34% to 44.8%. In 1Q10 quarter, BUMI has increased net profit of 38% or U.S. $ 71.14 million.
BUMI tax debt decreased to U.S. $ 369.1 million, compared to the same period in 2009 of approximately U.S. $ 626.06 million.
BUMI also recorded a revenue increase of U.S. $ 1.016 billion, compared to the previous same period is only U.S. $ 832.663 million. In addition, the company also managed to pocket the profit on foreign exchange, from loss about U.S. $ 8.575 million before.
What DO U Think? ELTY Landbank (Jonggol & Bukit Sentul) four times bigger than Bogor CIty ... BUY
PT Bakrieland Development Tbk (Bakrieland) immediately build access roads connecting the Jonggol - Bukit Sentul along the 10 kilometers and will be completed late 2010.
Access roads with a width of 60 meters will be connected with road network, including highways Ciawi Bogor - Sukabumi.
Through the acquisition of both regions, PT Bakrieland Development Tbk has an area of 14 000 hectares of land bank (ha) or one-fifth of Jakarta or Bogor city four times.
The acquisition process itself is completed in June 2010 on an area of 10 400 ha Jonggol area, while the remaining 20 percent comes from land Bukit Sentul, this region will be integrated with the residential project which began the process of handover in 2010.
Development of new areas require funds of around Rp 5.5 trillion, Rp 5 trillion to Bukit Jonggol and Rp 500 billion for Bukit Sentul and diharapkam in 2011 is expected this project will contribute to the company.
PT Bakrieland Development Tbk (ELTY) has set a 40% increase in its revenue target to Rp1.5 trillion this year.
Three foreign institutions Pictet Hongkong Capital, Swiss Chartered, and Savilla Fund have exercised their rights to buy Bakrieland's new shares.
Bang Juntri
DISCLAIMER: This report is issued by Bang Juntri. Although the contents of this document may represent the personal opinion of Bang Juntri. We cannot guarantee its accuracy and completeness.
Our market still on consolidation, but will close positive. Telco, metal and bank will be a trigger for today. Some shares like INCO, ANTM, TINS, TLKM, BBNI and BBRI will support our market. BoW on Indosat, BDMN, SMGR, ASII, LSIP and PTBA. PTBA was looking attractive for medium term investment.
ISAT subscriber Indosat recorded 37.8 million, up 34.5 percent
ISAT recorded a decline in net profit in 1H10 amounted to 71.5 percent when compared to the same period the previous year. Net profit in 1H10 amounted to Rp287, 1 billion or decrease up to Rp720 billion compared to the same period in 2009 and then recorded to reach Rp1, 007 trillion.Operating revenues increased by Rp9, 66 trillion, up 5.8 percent compared with the 1H09, an increase of 4.1 percent compared with 1Q10 achievement that only Rp4, 73 trillion.
Cellular business to grow at 7.7 percent compared to 1Q10, or 14.4 percent compared with 1H09.
Outstanding earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to Rp4, 6 trillion, up 6.8 percent yoy. EBITDA improvement was driven programs pursued cost efficiency and company management.
Moreover, to position the company currently reaches debt also increased by 8.9 percent or Rp24, 7 trillion yoy.
Total cellular subscriber Indosat recorded 37.8 million, up 34.5 percent yoy.
I think at this level ISAT is very attractive for medium term investment. Indosat would continue to implement its strategy of acquiring value customers and would focus to improve its ARPU mix by retaining a larger share of medium to high end customers. Indosat expects to achieve growth in the wireless segments of ex. Java regions while growth in Java would be primarily broadband driven. The new management team is also actively crunching operating costs and capex. Rising EBITDA should facilitate Indosat’s first ever positive cellular operating free cash flow (OPFCF) result in FY10, positive consolidated OPFCF and positive consolidated free cash flow to equity. Now ISAT trade at 14.15x PE’10 and 11.84x PE’11 (EPS Consensus). Maintain Buy ISAT, I put target price for ISAT at IDR 5586 (14.3x PE’11 consensus).
Are we quite tired @ BUMI? ... HOLD
PT Bumi Resources Tbk (BUMI) is expected to record net profit increase very significantly in the second quarter-2010.
The increase in net profit is donated by the increase in revenue. The Company is also expected to record gross profit margin increase from 34% to 44.8%. In 1Q10 quarter, BUMI has increased net profit of 38% or U.S. $ 71.14 million.
BUMI tax debt decreased to U.S. $ 369.1 million, compared to the same period in 2009 of approximately U.S. $ 626.06 million.
BUMI also recorded a revenue increase of U.S. $ 1.016 billion, compared to the previous same period is only U.S. $ 832.663 million. In addition, the company also managed to pocket the profit on foreign exchange, from loss about U.S. $ 8.575 million before.
What DO U Think? ELTY Landbank (Jonggol & Bukit Sentul) four times bigger than Bogor CIty ... BUY
PT Bakrieland Development Tbk (Bakrieland) immediately build access roads connecting the Jonggol - Bukit Sentul along the 10 kilometers and will be completed late 2010.
Access roads with a width of 60 meters will be connected with road network, including highways Ciawi Bogor - Sukabumi.
Through the acquisition of both regions, PT Bakrieland Development Tbk has an area of 14 000 hectares of land bank (ha) or one-fifth of Jakarta or Bogor city four times.
The acquisition process itself is completed in June 2010 on an area of 10 400 ha Jonggol area, while the remaining 20 percent comes from land Bukit Sentul, this region will be integrated with the residential project which began the process of handover in 2010.
Development of new areas require funds of around Rp 5.5 trillion, Rp 5 trillion to Bukit Jonggol and Rp 500 billion for Bukit Sentul and diharapkam in 2011 is expected this project will contribute to the company.
PT Bakrieland Development Tbk (ELTY) has set a 40% increase in its revenue target to Rp1.5 trillion this year.
Three foreign institutions Pictet Hongkong Capital, Swiss Chartered, and Savilla Fund have exercised their rights to buy Bakrieland's new shares.
Bang Juntri
DISCLAIMER: This report is issued by Bang Juntri. Although the contents of this document may represent the personal opinion of Bang Juntri. We cannot guarantee its accuracy and completeness.
Langganan:
Postingan (Atom)