Refer to Important disclosures in the last page of this report
Premier Insight
25 January 2018
News & Analysis
Corporates
BBRI: Bank BRI (BBRI IJ; Rp3,830; Hold) reported good results with net profit of Rp29tn in FY17(+10.7% yoy) and Rp8.5tn in 4Q17 (+20% qoq) – this was 3% above our/consensus estimates due to much lower loan provision of Rp0.95tn in 4Q (3Q: Rp4.8tn) due to front loading in prior 3 quarters. Profit growth was driven by loan growth (11.4%), stable NIM (7.8%), modest opex growth (10%), despite 25% rise in provision (credit cost: 2.5%). Core profit grew by 13% in FY17 although lower in 4Q (-12% qoq) albeit offset by the steep fall in provision. NPL ratio improved to 1.0% (2016: 1.2%), due to higher write-offs of Rp9.5tn (FY16: Rp8.4tn), while provision/NPL improved to 195% (vs. 170%). Guidance for 2018: loan growth of 10-12%, NIM of 7.7-7.9%, opex growth of 10-12%, NPL of 2.0-2.2%, credit cost of 2.0-2.2%, profit growth of 9-11%. We keep our Hold rating at this stage. (Company).
KAEF: Kimia Farma (KAEF IJ; Rp2,450; Not Rated) has inaugurate their rapid test production facility in Denpasar, Bali. Rapid test is a kind of detector various illnes i.e. HIV, siphilis, hepatitis, malaria, and dengue. The management stated that they forrecast this rapid test production facility could contribute revenue around Rp100bn on its first year operation. This complete this facility, the company already spent around Rp26bn which already include building construction and production tools. (Kontan).
TOWR: Menara Sarana (TOWR IJ; Rp3,940; Buy) has allocated capex of Rp2.0tn for FY18 of which 30% is allocated for new tower development. Investment cost for a new tower ranges from Rp900mn-1bn. Currently, TOWR has built to suit order from XL Axiata and Hitchison 3 Indonesia. Furthermore, the company aims for revenue growth of 5-9% in FY18. (Bisnis Indonesia).
SMSM: Selamat Sempurna (SMSM IJ; Rp1,330; Buy) has budgeted capex of Rp120bn for FY18, which roughly similar with the previous years. Meanwhile, revenue is expected to grow by 10% in FY18. The company aims to increase its SKU by 10% for this year. Selamat Sempurna is currently running 6,000 SKU for filtration products and 2,000 SKU of radiator. (Bisnis Indonesia).
SMGR: Semen Indonesia’s (SMGR IJ; Rp10,725; Hold) sales volume was 28.9mn tons in FY18 (+10% yoy), consist of 27.1mn tons sold in the domestic market and 1.9mn tons sold to the export market. This year the company expects to grow its volume by 5%, relatively in line with industry in order to maintain market share of 40%. Semen Indonesia’s production capacity will increase to 35mn tons
with the completion of Rembang and Indarung plant. (Kontan).
Markets & Sector
Gas Sector: The Government is still exploring alternative ways to reduce gas selling price to US$6/MMBTU from current level of US$8-9/MMBTU. According to the Vice Minister of Energy and Mineral Resources, the Government could reduce non tax revenue in order to reduce gas price. If the Government reduce non tax revenue by US$4.3mn, gas selling price could be reduce by US$0.3-0.7/MMBTU. The Vice Minister also addressed, that it is unlikely to reduce gas selling price to US$6/MMBTU.
Index Closing 1 day 1 year YTD
JCI 6,615 - 0.3% 25.0% 4.1%
Commodities Last price Ret 1 day Ret 1 year
PremierInsight
2
Refer to Important disclosures in the last page of this report
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
