Refer to Important disclosures in the last page of this report
Premier Insight
26 January 2018
News & Analysis
Corporates
CTRA : Ciputra Development (CTRA IJ; Rp1,250; Buy) set a conservative target for FY18 with flat marketing sales of Rp7.6tn in FY17. CTRA allege that FY17 marketing sales was helped by a one off block sales worth Rp675bn. However, company targets FY18 revenue to grow by 15-20% as some of the sales made in FY17 will be recognized in FY18. (Bisnis Indonesia).
Comment: This marketing sales target is way below our FY18 target by 44%. We will review our call and forecast for CTRA given FY18 conservative growth.
PGAS: Perusahaan Gas Negara (PGAS IJ; Rp2,650; Hold) received shareholder’s approval for restructuring with Pertamina to form oil and gas holding company. Within 60 days, the Government has to issue government regulation to govern this corporate action. It is likely, that this holding will adopt the previous scheme of the mining holding. Up to this point nothing has been mentioned about Pertagas merger and whether oil and gas asset under Saka energy will need to be spin off. (Kontan).
Comment: We take neutral stance on this merger, since structure and valuation is not declared. The Government need to be clear how to create new synergy from these new structure.
TOWR: Menara Sarana (TOWR IJ; Rp3,880; Buy) reported that Sapta Adhikari Investama (SAI), its main shareholder increase its holding from 48.8% to 50.03%, following its increase from 32.7% to 48.8% in Nov17. SAI is an investment vehicle fully owned by Hartono family (Djarum Group). According to the official filling, SAI bought 125mn shares at Rp3,930.
WIKA: Wijaya Karya (WIKA IJ; Rp2,110; Buy) received a loan from China 2017. Reiterate Buy on WIKA with TP of Rp2,900.
Markets & Sector
Mining sector: China nickel import jumped 116% yoy to 41.3k tons (nickel content) in Dec’17 after the government of China reduced import tax for nickel sulfate from 5.5% to 2% in Dec’17. Nickel sulfate is mostly used for NCM and NCA batteries for electric vehicles. (SMM).
Comment: Positive sentiment for nickel which reached US$13,700 per ton yesterday. Several data that we follow indicate rising nickel demand in China for non-stainless steel applications, mostly for electric vehicle battery. We maintain our positive view for Vale Indonesia (INCO IJ; Rp3,660; Buy) while reviewing our forecast and valuation for the company.
JCI Index
Index Closing 1 day 1 year YTD
JCI 6,615 0.0% 24.4% 4.1%
Commodities Last price Ret 1 day Ret 1 year
PremierInsight
2
Refer to Important disclosures in the last page of this report
Economic
Reference rate: BI governor Agus Martowardojo says that the central bank has limited room to undertake rate cut, given the US’ plan to increase its benchmark rate. Therefore, measures will be directed toward other monetary instruments, as what happened early in Jan18’s meeting. (Jakarta Globe).
Head Office
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period
ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
DISCLAIMERS
