Professional Documents
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Research Team
Katarina SETIAWAN
Head of Research
Equity Daily
ksetiawan@kimeng.co.id
+6221 2557 1125 Plantation: London Sumatra (LSIP IJ) posted a strong 1H10 net
Ricardo SILAEN, CFA
profit of Rp418b, up 46% y/y on the back of higher ASP, especially
rsilaen@kimeng.co.id rubber, and lower costs. Sales increased by 8% y/y to Rp1,556b.
+6221 2557 1126 Gross and operating profits rose by 25% and 43% to Rp750b and
Rahmi MARINA
Rp571b, respectively.
rmarina@kimeng.co.id
+6221 2557 1128 Telco: Indosat (ISAT IJ) announced that its 1H10 net income was
down 71% y/y to Rp287b from Rp1t in 1H09. Revenue was up 6%
Lucky ARIESANDI, CFA
lariesandi@kimeng.co.id
y/y to Rp9.661.8b while EBITDA increased 7% to Rp4,608b.
+6221 2557 1127 EBITDA margin was up to 47.7% in 1H10 from 47.0% in 1Q10, and
47.3% in 1H09. Number of subscribers was up 0.1% q/q and
Adi N. WICAKSONO
anwicaksono@kimeng.co.id
34.5% y/y to 37.8 million.
+6221 2557 1130
Heavy equipment: United Tractors (UNTR IJ) released another
Arwani PRANADJAYA strong operational performance for July. Sales volume of
apranadjaya@kimeng.co.id
+6221 2557 1129 Komatsu came in at 468 units, down 8% m/m. YTD sales volume
for Komatsu is 3,200 units, up 87% y/y.
Key Indices
Last Point % chg
IDX Index 3,114.9 ‐13.8 ‐0.4
IDR/USD 8,980.0 ‐10.5 ‐0.1
SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Equity Daily 25 August 2010
London Sumatra (BUY): Robust 1H10 result
London Sumatra posted a strong 1H10 net profit of Rp418b, up 46% y/y
on the back of higher ASP, especially rubber, and lower costs.
Sales increased by 8% y/y to Rp1,556b. Gross and operating profits rose
by 25% and 43% to Rp750b and Rp571b, respectively.
Analyst comment:
On volume basis, sales of CPO in 1H10 was down 3% to 159.3k tons, while
rubber down 13.1% y/y to 9.7k tons. However, on q/q basis, sales volume
of CPO increased by 30% to 90k tons.
Gross and operating margins improved to 48% and 36% in 1H10 from 42%
and 28% in 1H09.
Net profit in 2Q10 came in at Rp250b, up 49% q/q, on higher sales.
We also see that operating costs declined, mostly on lower G&A
expenses.
Overall, result is in line with our expectation. We believe strong rubber
price in 1H10 was the major contributor to the strong result.
Currently the stock is trading at 13.1x FY10 PER. We recommend BUY
with target price Rp11,300 with 22% upside potential.
Figure 1: London Sumatra 1H10 results
(Rp b) 1H10 1H09 % chg y/y 2Q10 1Q10 % chg q/q
Sales 1,566 1,446 8 876 690 27
COGS (816) (844) ‐3 (460) (356) 29
Gross Profit 750 602 25 426 325 31
Operating expenses (180) (204) ‐12 (88) (91) ‐3
Operating profit 571 398 43 337 233 44
Pretax profit 564 406 39 338 225 50
Tax (146) (119) 22 (88) (57) 54
Net profit 418 287 46 250 168 49
Gross margin (%) 48 42 49 47
Operating margin (%) 36 28 39 34
Net margin (%) 27 20 29 24
Source: Company data, Kim Eng
Indosat (HOLD): 1H10 net income down 71% y/y
Indosat announced that its 1H10 net income was down 71% y/y to
Rp287b from Rp1t in 1H09.
Revenue was up 6% y/y to Rp9.661.8b while EBITDA increased 7% to
Rp4,608b.
EBITDA margin was up to 47.7% in 1H10 from 47.0% in 1Q10, and 47.3%
in 1H09.
Number of subscribers was up 0.1% q/q and 34.5% y/y to 37.8 million.
Analyst comment:
On top lines, we see that strong cellular business (+14% y/y) mitigated
INDONESIA EQUITY RESEARCH
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Equity Daily 25 August 2010
declines on revenue from MIDI (‐12% y/y) and fixed phone (‐26% y/y).
We see there are four main factors that contributed to the weak result: 1)
higher depreciation and amortization costs (Rp2.99t, +25% y/y), higher
marketing expenses (Rp509b, +34% y/y), lower forex gain (Rp370b, ‐49%
y/y), and higher financing cost (Rp1083b, +23% y/y).
The result is below our expectation. In the mean time, HOLD.
Figure 2: Indosat’s 1H10 results
(Rp b) 1H10 1H09 % chg y/y
Operating revenues
Cellular 7,678 6,711 14
MIDI 1,222 1,397 ‐12
Fixed phone 761 1,028 ‐26
Operating revenues 9,662 9,135 6
Operating expenses 8,048 7,216 12
Operating profit 1,614 1,919 ‐16
Other income (expenses) (1,116) (454) 146
Gain/loss on fair value of derivatives (263) (208) 26
Gain (loss) on foreign exchange ‐ net 370 729 ‐49
Interest income 71 104 ‐32
Financing costs (1,083) (883) 23
Amortization of goodwill (113) (118) ‐4
Others ‐ net (98) (78) 26
Net income 287 1,007 ‐71
EBITDA 4,608 4,319 7
Diluted EPS (Rp) 52.8 185.4 ‐71
Margins (%):
Operating margin 16.7 21.0
EBITDA margin 47.7 47.3
Net margin 3.0 11.0
Source: Company data
United Tractors (BUY): Strong July operational figures
The company released another strong operational performance for July.
Sales volume of Komatsu came in at 468 units, down 8% m/m. YTD sales
volume for Komatsu is 3,200 units, up 87% y/y.
Pamapersada delivered 6.3m tons of coal and removed 53.7m bcm of
overburden in July, similar to those in the previous month. YTD,
Pamapersada delivered 44.1m tons of coal (+22% y/y) and removed
368.5m bcm of overburden (+13% y/y).
Coal production from DEJ mine came in at 219k tons, rose 29% compared
to June. YTD, coal production from DEJ is 1.42m tons (+2% y/y).
Analyst comment:
Sales of Komatsu in July is still driven by mining with 296 units (‐9% m/m),
followed by agro with 97 units (+5% m/m).
We believe the company is on track to meet our target of selling 5,000
units of Komatsu and Pama to produce 77m tons of coal in FY10.
We recommend BUY with target price Rp22,600, implying 21% upside
potential.
INDONESIA EQUITY RESEARCH
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Equity Daily 25 August 2010
AKR Corporindo (HOLD): Expect FY10 revenue to reach Rp11.65t, denied
rumour on Sorini’s divestment
Investor Daily quoted Director of AKR Corporindo, Vembu Suresh,
expecting FY10 AKR’s revenue to reach Rp11.65t‐Rp12.1t, up by 30‐35%
y/y.
Higher revenue will be supported from petroleum distribution business.
He expects FY10 petroleum sales volume to reach to 1.3m KL, or increase
by 27.5% from 1.02m KL in FY10. Meanwhile, price of petroleum is
expected to increase by 22% y/y in FY10.
In separate news, Suresh denied a rumor that the company is to divest its
stake in Sorini Agro Asia (SOBI). Previously, it was reported that Cargill
planned to buy stake in Sorini from AKR Corporindo.
Analyst comment:
The management’s FY10 revenue target is in line with our estimate.
As Sorini is the biggest contributor to AKR’s profit, we do not think that at
this moment AKR would divest the unit. AKR owned 68.83% stake in
Sorini.
We view the stock is trading at its fair price. Therefore, we downgrade
our recommendation to HOLD from BUY. TP Rp1,320.
Bank Bukopin: Company visit
Below are the key takeaways from our visit to Bank Bukopin:
We learned that aside from BULOG, Bank Bukopin has formed “outlet
business model” with several institutions such as PLN (State Power
Company), Pertamina (State Oil Extraction Company), Jamsostek, and a
number of hospitals. The bank is also tapping loans to pensioners through
cooperation with Koperasi Nusantara and Koperasi Pensiunan Nasional.
Bukopin indicated that in this model, it is open for tighter working
relationship, should it provide a wider opportunity for product cross‐
selling. However, it refuses to comment on the widespread news about
the possibility of Jamsostek acquiring stakes in the bank.
Our crosscheck with Bank Rakyat Indonesia also suggests that there has
been no formal talk on the prospect of BRI purchasing majority shares in
Bukopin. BRI is still focusing on its acquisition of Bank Agroniaga.
Bukopin is eyeing 15% y/y loan growth in 2010 to ~Rp28t. This is lower
than its 1H10 position (27% YTD growth to Rp29.5t) as loan book
contracts in 2H10 on seasonality.
The bank still focuses on SME (loan size Rp500m‐Rp10b), with loan to
BULOG made up 30% of its total portfolio. The YE10 target for this
segment is ~Rp15t.
Expansion plan will also be supported by micro lending (loan size <
Rp500m for Jakarta, or < Rp150m outside Jakarta), which is projected to
reach ~Rp2t by YE10. With micro lending rate of ~20% (vs. 12%‐13% for
SME), Bukopin expects to see NIM improvement.
At an expected deposit growth of 20% y/y (to ~Rp38t), Bukopin’s 2010
LDR will hover around 70%. This suggests a possible upward (downward)
adjustment on loan (deposit) target to comply with the upcoming LDR‐
linked reserve requirements from the central bank. Note that the
INDONESIA EQUITY RESEARCH
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Equity Daily 25 August 2010
accepted LDR will likely be in 75%‐102% range.
Our main concern is on depleting CAR, from 16.0% in 1Q10 to 13.3% in
2Q10. The bank stated that it is planning to restore CAR back to ~16%
through secondary offering or subdebt issuance, which we think is likely
to happen this year.
Figure 3: Bank Bukopin’s ratios compares to industry
(%) 12mo06 12mo07 12mo08 12mo09 3mo10 6mo10 Industry
CAR 15.8 12.8 11.2 14.4 16.0 13.3 18.1
NPL 3.7 3.6 4.9 2.8 3.0 2.9 3.0
ROA 1.9 1.6 1.7 1.5 1.6 1.6 3.0
ROE 22.1 22.3 18.8 16.5 17.9 18.2
NIM 5.2 4.3 4.8 4.1 5.1 4.9 5.8
LDR 58.9 65.3 83.6 76.0 73.2 80.3 75.3
Source: Company data
Chart Pointers
IDX: Regional market is in negative zone this morning. We think this
condition will affect IDX today too. On the other hand, we still see oil
price to weaken further with target at USD66 per barrel, based on daily
TD sequential sell countdown chart. Our recommendation is Take Profit,
and rebalance the portfolio into small and medium cap stocks. Today’s
trading range is between 3050‐3074‐3094 (support) and 3140‐3152‐3210
(resistance).
AALI: MaCD indicated golden cross, positive signal. This is inline with
increasing buying volume. We believe the lowest level for today is at
Rp19400. BUY ON WEAKNESS.
BNGA: The stock price still stays above 20day moving average. In
addition, candlestick pattern is in solid formation too. TRADING BUY.
INDONESIA EQUITY RESEARCH
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Equity Daily 25 August 2010
Commodities 24‐Aug‐10 23‐Aug‐10 Change (US$) Change (%)
Nickel (US$/ton) 20,540.50 21,139.50 (599.00) (2.83)
Tin (US$/ton) 20,420.00 20,505.00 (85.00) (0.41)
Gold (US$/t.oz) 1,230.65 1,226.15 4.50 0.37
CPO Malaysia (US$/ton) 848.02 867.50 (19.47) (2.24)
Oil NYMEX (US$/barrel) 71.63 73.10 (1.47) (2.01)
Coal ‐ ARA region (US$/ton) 91.50 92.34 (0.84) (0.91)
Key corporate actions
Cum date Ex‐date Company Action Price (Rp) Note
27‐Aug‐10 30‐Aug‐10 HEXA Interim dividend 10 US$0.0145
2‐Sep‐10 3‐Sep‐10 TSPC Final dividend 09 35
6‐Sep‐10 7‐Sep‐10 MAIN Final dividend 09 56
7‐Sep‐10 15‐Sep‐10 BPFI Final dividend 09 1
7‐Sep‐10 15‐Sep‐10 HMSP Final dividend 09+spec 08 615
16‐Sep‐10 17‐Sep‐10 MERK Interim dividend 10 3,570
7‐Oct‐10* 8‐Oct‐10* BBNP Rights issue: 6 (n) : 19 (o) 1,000 *Tentative date
INDONESIA EQUITY RESEARCH
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Equity Daily 25 August 2010
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INDONESIA EQUITY RESEARCH
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Equity Daily 25 August 2010
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INDONESIA EQUITY RESEARCH
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