INVESTOR DIGEST Equity Research | 30 July 2020
Economic Data HIGHLIGHT Latest 2020F • Jul-20 Inflation Preview: Deflation in Sight 7-DRRR (%), eop 4.00 4.00 • Banking Industry - 15 banks to distribute Rp100tr guaranteed loans Inflation (YoY %) 1.96 2.52 • Ace Hardware: 2Q20 Short-Form Result: Expected but Below Consensus (ACES; US$ 1 = Rp, period avg 14,543 14,745 Rp1,740; Neutral; TP: Rp1,500) • Astra Agro Lestari: 2Q20 Results (AALI; Rp9,700; Non Rated) • Astra International: Weak Earnings Are Expected (ASII; Rp5,075; Buy; TP: Rp5,000) Stock Market Data (29 July 2020) • Bank BJB: 2Q20 Results & Analyst Meeting Takeaways (BJBR; Rp965; Buy; TP: Rp860) • Bank Jatim: 1H20 Results & Analyst Meeting Takeaways JCI Index 5,111.1 -0.04% • Bank Niaga 1H20 Results - Flat PPOP Growth, Rising CoC (BNGA; Rp780; Buy; TP: Trading T/O ( Rp bn ) 6,789.1 Rp840) Market Cap ( Rp tn ) 5,922.4 • BTPN Syariah: 1H20 Results and Analyst Call Takeaways (BTPS; Rp3,430; Buy; TP:
Rp3,200)
• Bank Panin 1H20 Results: Loan Growth Continues Weak Trend (PNBN; Rp805; Buy;
Market Data Summary* TP: Rp1,100)
• Bekasi Fajar: 2Q20: Continued Core Loss (BEST; 125; Neutral; TP: Rp130) 2020F 2021F • Charoen Pokphand Indonesia 2Q20 Earnings: Better than Expectations (CPIN;
Rp6,200; Buy; TP; Rp5,500) P/E (x) 20.2 14.6 • Erajaya Swasembada: 2Q20 Results: Above Expectations (ERAA; Rp1,450; Buy; TP: P/BV (x) 2.1 1.9 Rp1,500) EV/EBITDA (x) 13.2 11.6 • Indocement 2Q20: Below Estimates due to Seasonality (INTP; Rp12,400; Buy; TP: Div. Yield (%) 3.3 2.5 Net Gearing (%) 25.5 22.6 Rp14,500) ROE (%) 10.2 13.5 • Indosat 2Q20 Earnings Call Summary (ISAT; Rp2,340; Buy; TP: Rp3,200) EPS Growth (%) -26.4 38.1 • Japfa Comfeed 2Q20: Muted Cost Saving Initiatives on Top of Higher Interest EBITDA Growth (%) -9.7 13.4 Expenses (JPFA; Rp1,105; Buy; TP: Rp1,100) Earnings Yield (%) 4.9 6.8 • Kalbe Farma: 2Q20 Short-Form Result - In-line (KLBF; Rp1,525; Buy; TP: Rp1,650) • Mayora Indah: 2Q20 Short-Form Result - Below (MYOR; Rp2,350; Buy; TP: Rp2,650) * Aggregate of 76 companies in MS research universe, • Siloam Hospital: 2Q20 Results and Earnings Call Takeaways (SILO; Rp4,550; Buy; TP: representing 63.6%of JCI’s market capitalization Rp7,150) • Surya Citra Media 2Q20 Results: Margin Held Up Despite Pressures (SCMA; Rp1,280; Buy; TP: Rp1,800) • Tower Bersama 2Q20 Results: Revenue & Profit Growth Accelerated (TBIG; Rp1,300; Buy; TP: Rp1,400) • Unilever Indonesia 2Q20 EPS: In-Line with Ours; Below Consensus (UNVR; Rp8,250; Buy; TP: Rp9,500) • United Tractors: Dragged Down by Weak Coal Price (UNTR; Rp21,500; Buy; TP: Rp22,500) • Vale Indonesia: Anticipate Stronger Earnings in 3Q20 (INCO; Rp3,400; Buy; TP: Rp3,500)
Please see important disclosure at the back of this report Page 1 of 35 Equity Research | 30 July 2020
ECONOMY
Jul-20 Inflation Preview: Deflation in Sight
Monthly deflation is likely. We forecast Jul-20 consumer price index (CPI) to deflate by -0.05% MoM, bringing the annual figure to ease further to 1.59% YoY from 1.96% last month. In general, the deflation reflects the low demand and supply normalization. Meanwhile, we forecast core inflation to remain subdued despite gold and education price increase. The data will be released on Monday (3-Aug).
Inside the Jul-20 food basket. Based on our observation, the food group may have contributed -0.14 ppt to total monthly deflation, with onion and chicken as the main contributors (-0.12 ppt). We also notice decreasing sugar price (-0.04 ppt), owing to supply normalization after significant import in 2Q20 (108% YoY).
Muted demand-pull inflation. On the core inflation, the figure may have trimmed to 2.10% YoY (vs. 2.26% in Jun-20) on the back of weak domestic demand, despite the seasonal academic year. The recently rising gold price, which we calculate to add 0.05 ppt contribution, is possibly to prevent core inflation from decelerating further.
Manageable pressure in 2H20. All in all, inflation pressure will still be manageable in the second half. Specifically, the economic recovery path is viewed to be a gradual one (U-shaped or ”Nike-shaped”), spelling a modest consumption. Meanwhile, we do not see potential pressure on food supply, as the World Meteorological Organization suggests a very low El Nino probability at 10% for Jun-Nov 2020 period. At this moment, we are reviewing and planning to revise our initial 2.7% inflation forecast.
INFLATION SUMMARY Jun-20 Jul-20
MS Forecast Market Consensus Headline inflation (%, YoY) 1.96 1.59 1.70 Headline inflation (%, MoM) 0.18 -0.05 0.02 Core inflation (%, YoY) 2.26 2.10 2.11 Sources: CEIC, Mandiri Sekuritas estimate
FOOD PRICES OBSERVATION IN JUL-20 THE GOLD PRICE INCREASED BY 5% MOM IN JUL-20, CONTRIBUTING 0.05 PPT TO CPI CHANGE BASED ON OUR ESTIMATION Jul-20 Commodity Contribution Gold Price MoM Inflation % MoM (ppt) 8.0% Rice -0.21 (0.01) Broiler chicken meat -4.38 (0.05) 6.0% Beef -0.04 (0.00) 4.0% Broiler chicken egg 3.64 0.02 2.0% Red onion -25.43 (0.07) Garlic -17.52 (0.03) 0.0% Red chili 8.43 0.03 -2.0% Chili pepper (Rawit) 2.86 0.00 Cooking oil -0.19 (0.00) -4.0% 19 20 18 19 18 19 19 20 18 19 20 19 20 ------Sugar -7.04 (0.04) - - Jul Jul Jul Jan Jan Sep Sep Nov Nov Mar Mar Total Food Group (0.14) May May
Source: National Strategic Food Information Center (PIHPS), Mandiri Sekuritas Source: Bloomberg estimate (as of 28Jul20)
Leo Rinaldy(+6221 5296 9406) [email protected] Imanuel Reinaldo(+6221 5296 9651) [email protected]
Please see important disclosure at the back of this report Page 2 of 35 Equity Research | 30 July 2020
SECTOR
Banking Industry - 15 banks to distribute Rp100tr guaranteed loans
The government has collaborated with 15 banks in the latest move to jumpstart the economy through working capital loans extension that are guaranteed by state companies. The government estimates Rp51tr of new working capital loans are needed to reopen the economy in the remaining five months of 2020 and Rp81tr in 2021. − The 15 banks are: Bank Central Asia, Bank Danamon Indonesia; Bank DBS Indonesia, Bank HSBC Indonesia, Bank ICBC Indonesia, Bank Maybank Indonesia, Bank Resona Perdania, Standard Chartered Bank, Bank UOB Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Tabungan Negara, Bank DKI, Bank MUFG. There is no detail on how much loans are allocated for each banks. − The banks will distribute Rp100tr working capital loans until 2021. − The loans are for non-MSME segments and non-SOE companies with loan size of between Rp10bn (USD 0.69m) to Rp1tr (USD 69m). − The loans are targeted for the export-oriented industries and/or labor intensive companies with >300 staffs. − At least 60% of the credit risk will be borne by state institutions: Lembaga Penjaminan Expor Impor and PT Penjamin Infrastruktur Indonesia. Up to 80% of credit risk will be borne by the two institutions if the loans are extended to the priority sectors: tourism related (hotel, restaurants), automotive, textile and textile products, footwear, electronics, wood processing, furniture. − The government pays 100% of the insurance premium for loans up to Rp300bn and 50% for loans between Rp300bn to Rp1tr. The source of funds are from the national economic recovery (PEN) budget. − Lending rate is expected at 7% pa.
Comments: This move is aimed for banks to help the industry players to restart the business activities again after months of lockdown. The industry now looks at 4-5% loan growth for 2020 and have started extending loans again since June. While the expected loans to be restructured is set at 20-30%, around 18% has been done especially for the micro and SME segments. The government earlier placed Rp30tr funds in four state banks, which are required to triple the amount as their new loans and another Rp9.5tr to regional development banks, for them to extend new loans twice as much as the funds placement. Of the 15 banks for the new move, eight of them are listed banks. We keep our Overweight on the banking industry.
Tjandra Lienandjaja (+6221 5296 9617) [email protected]
CORPORATE
Ace Hardware: 2Q20 Short-Form Result: Expected but Below Consensus (ACES; Rp1,740; Neutral; TP: Rp1,500)
Overall earnings came below market forecast though the performance is well expected. Operating deleverage caused the weakness but working capital and product mix trends are encouraging. ACES is the most resilient fashion retailer in 2Q20 thus far.
2Q20 Revenue of Rp1.7tn (-19% YoY) came below estimates; overall 1H20 Revenue of Rp3.6tn (-8% YoY) met 51%/47% of our/consensus’ FY20 estimates. The performance is expected given ACES’ 1H20 SSSG of -8% YoY, store closure, and the slow-down of store expansion. The 2Q20 figure was dragged down primarily by Apr-May’20 numbers which was the lowest performance during PSBB, while SSSG recovery has materialized in Jun’20, where all stores were also opened.
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2Q20 EBIT of Rp141bn (-52% YoY) came below estimates; overall 1H20 EBIT of Rp408bn (-28% YoY) formed 54%/43% of our/consensus’ FY20 estimates. Gross profit margin improved 2.2ppt YoY to 49.2%, as product mix shifted to lifestyle and high-ticket items such as sports and kitchen utensils. Nevertheless, the sales drop caused an operating de-leverage in 2Q20, with operating margin declining by 5.7ppt YoY to only 8.4%.
2Q20 NPAT of Rp114bn (-51% YoY) came below estimates; overall 1H20 NPAT of Rp360bn (-24% YoY) formed 51%/41% of our/consensus’ FY20 estimates. ACES’s cash flow remains healthy YTD, with 53% higher operating cash flow YoY from lower payments to suppliers and lower taxes paid. Inventory days also remained resilient at c.200 days given a good inventory management.
2Q20 RESULTS SUMMARY Rp bn 2Q20 1Q20 %qoq 2Q19 %yoy 6M20 6M19 %yoy % Mansek % of Cons Net Sales 1,685 1,967 -14% 2,080 -19% 3,652 3,962 -8% 51% 47% Gross Profit 829 975 -15% 976 -15% 1,804 1,867 -3% 55% 49% Operating Profit 141 267 -47% 294 -52% 408 569 -28% 54% 43% Pretax 136 296 -54% 290 -53% 432 584 -26% 49% 40% Net Profit 114 246 -53% 236 -51% 360 473 -24% 51% 41% bps bps bps change change change Gross margin 49.2% 49.6% (41) 46.9% 226 49.4% 47.1% 227
Operating margin 8.4% 13.6% (525) 14.1% (577) 11.2% 14.4% (319)
Pretax margin 8.1% 15.1% (700) 14.0% (591) 11.8% 14.8% (293)
Net margin 6.8% 12.5% (569) 11.3% (455) 9.9% 11.9% (207)
Source: Company, Boomberg, Mandiri Sekuritas estimates
Lakshmi Rowter (+6221 5296 9549) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]
Astra Agro Lestari: 2Q20 Results (AALI; Rp9,700; Non Rated)
1H20 net profit was broadly inline. AALI recorded a net profit of Rp.21bn (231%+ yoy/-94% qoq) in 2Q20 bringing 1H20 net profit to Rp.392bn (+796% yoy) which was slightly above at 56% of consensus forecast. 1H20 revenue stood at Rp.9.1tn (+7% yoy) driven by significantly higher CPO at Rp.8.1k (+26% yoy), but dragged by lower volume at 752k ton (-14% yoy). As such, gross margin and operating margin increased by 6ppt to 14% and 8%.
2Q performance was impacted by covid. AALI 2Q20 net profit stood at Rp.21bn (+231% yoy/-94% qoq) following 10% higher yoy CPO ASP, but declined 19% qoq dragged by soft demand during lockdown and plunging crude oil prices. CPO sales volume pickup 15% qoq on improving FFB yield, although on yoy basis was still 3% lower due to last year drought. Gross profit margin and operating margin stood at 8.8% and 2.7% respectively in 2Q20 (vs. 9.2% and 2.5% in 2Q19), .
Rp bn 2Q20 2Q19 %yoy 1Q20 %qoq 6M20 6M19 %yoy % of Cons Net Sales 4,285 4,294 0% 4,796 -11% 9,081 8,526 7% 50% Gross Profit 377 396 -5% 927 -59% 1,304 729 79% 47% Operating Profit 117 109 7% 640 -82% 756 143 429% 54% EBITDA 426 423 1% 951 -55% 1,378 774 78% 48% Pretax 43 62 -30% 605 -93% 648 135 380% 54% Net Profit 21 6 231% 371 -94% 392 44 796% 56%
Gross margin 8.8% 9.2% 19.3% 14.4% 9%
Operating margin 2.7% 2.5% 13.3% 8.3% 2%
EBITDA margin 9.9% 9.8% 19.8% 15.2% 9%
Pretax margin 1.0% 1.4% 12.6% 7.1% 2%
Net margin 0.5% 0.1% 7.7% 4.3% 1%
Wesley Louis Alianto (+6221 5296 9510) [email protected]
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Astra International: Weak Earnings Are Expected (ASII; Rp5,075; Buy; TP: Rp5,000)
ASII’s weak 1H20 net profit was expected. We expect recovery in 2H20 following recovery in auto sales and lower impairment from financing unit. Valuation remains attractive at 0.9x FY21F PBV, near the 2008 level during the global financial crisis.
Weak 1H20 was expected. ASII’s 2Q20 net profit of Rp6.6tn (+43% YoY/+37% QoQ) was due to Rp5.9tn one-off gain from the divestment of BNLI. Stripping out BNLI’s one-off gain, 2Q20 net profit was Rp.687bn (-85% YoY/-86% QoQ), bringing 1H20 net profit to Rp.5.5tn(-44% YoY), representing 38% of our FY20F of Rp14.5tn. Weak earnings in 1H20 were expected across division with automotive (-79% YoY; 13% NP) and financial services (-27% YoY; 38% NP) among the hardest hit during lockdown, in addition to lower earnings from UNTR (-29% YoY; 43% NP) due to weak coal prices, while earnings from AALI recovered (+236% YoY; 6% NP) following significant YoY increase in CPO prices. We expect earnings contribution from automotive and financing to pick up in 2H20 following recovery in auto sales and lower NPL from financing, while earnings from UNTR will remain muted due to weak coal price outlook.
Key points to highlight in 2Q20: 1) Automotive: 4W and 2W posted net losses of Rp.804bn and Rp.89bn, respectively, following sharp decline in the sales volumes of ASII car (-92% YoY/-93QoQ) and motorcycle (-80%YoY/QoQ). As such, automotive distribution’s tight OPM turned negative in 2Q20 to -2.79% (2Q19: 0.98%, 1Q20: 0.24%), driven by weak topline, while gross margin was flat at 11%. 2) Total equity income in 2Q20 turned negative, at Rp.609bn, including a combined net loss of Rp369bn from AHM and ADM as a result of running at half capacity during the large-scale social restriction (PSBB), and we expect total equity to gradually increase until the end of the year. 3) UNTR’s NP (-13% YoY/ +23% QoQ) was driven by weak coal prices (-24%YTD) despite an increase in contribution from gold mines. 4) Financing was also adversely affected, with earnings at Rp.694bn (-52% YoY/-50% QoQ) due to increased provisions of potential NPL.
Cementing dominance in 4W market. We still like ASII for its dominance in the automotive sector despite short-term headwinds from the pandemic. We believe ASII should benefit from the crisis by gaining more market share in the 4W market, which is necessary to support higher margins. Valuation remains attractive at 0.9x FY21F PBV (-2 SD), which is near the 2008 level during the global financial crisis.
FINANCIAL SUMMARY YE Dec (Rp Bn) 2018A 2019A 2020F 2021F 2022F EBITDA 35,703 34,637 31,404 31,245 32,444 Net Profit 21,673 21,707 14,710 17,216 19,149 Fully-diluted EPS 535 536 363 425 473 Fully-diluted EPS growth (%) 15.0 0.2 (32.2) 17.0 11.2 P/E Ratio (x) 9.5 9.5 14.0 11.9 10.7 EV/EBITDA (x) 8.5 9.0 8.9 9.1 8.7 P/B Ratio (x) 1.5 1.4 1.3 1.3 1.2 Dividend Yield (%) 3.7 4.2 4.8 3.2 3.8 ROAE (%) 16.6 15.2 9.8 10.9 11.3 Source: Company (2018-2019), Mandiri Sekuritas (2020-2022)
RESULTS SUMMARY % of % of RpBn 2Q20 2Q19 %YoY 1Q20 %QoQ 6M20 6M19 %YoY FY20F ours cons Revenue 35,793 56,575 -37% 54,002 -34% 89,795 116,182 -23% 194,876 46% 47% Gross Profit 8,087 11,856 -32% 12,087 -33% 20,174 24,468 -18% 37,088 54% 51% Operating Profit 2,078 5,848 -64% 5,732 -64% 7,810 12,762 -39% 18,350 43% 42% Pretax Profit 7,719 7,379 5% 7,267 6% 14,986 15,696 -5% 22,820 66% 59% Net Profit 6,568* 4,588 43% 4,810 37% 11,378* 9,803 16% 14,449 79% 72% *includes gain on sale of investment in Permata Bank
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% of % of RpBn 2Q20 2Q19 %YoY 1Q20 %QoQ 6M20 6M19 %YoY FY20F ours cons Gross Margin (%) 23% 21% 22% 22% 21%
Operating Margin (%) 6% 10% 11% 9% 11%
Pretax Margin (%) 22% 13% 13% 17% 14%
Net Margin (%) 18.3% 8.1% 9% 13% 8%
Revenue breakdown
Automotive 9,105 24,327 -63% 23,221 -61% 32,326 49,958 -35% 70,061 46%
Financial services 5,375 5,688 -5% 5,400 0% 10,775 10,456 3% 17,380 62%
Heavy equipment and mining 14,863 20,337 -27% 18,361 -19% 33,224 42,987 -23% 76,511 43%
Agribusiness 4,119 3,960 4% 4,860 -15% 8,980 8,133 10% 19,979 45%
Others 1,790 2,263 -21% 2,700 -34% 4,490 4,647 -3% 10,945 41%
Total 35,793 56,575 -37% 54,002 -34% 89,795 116,182 -23% 194,876 46%
Net profit breakdown
Automotive (1,209) 1,526 -179% 1,924 -163% 715 3,431 -79% 4,246 17%
Financial services 694 1,442 -52% 1,395 -50% 2,089 2,843 -27% 4,150 50%
Heavy equipment and mining 1,306 1,505 -13% 1,058 23% 2,364 3,333 -29% 5,338 44%
Agribusiness 41 68 -39% 289 -86% 330 98 236% 352 94%
Others (144) 47 -407% 144 -200% 0.00 98 -100% 362 0%
Total 687* 4,588 -85% 4,810 -86% 5,497* 9,803 -44% 14,449 38%
*before gain on sale of investment in Permata Bank Source: Company, Mandiri Sekuritas Estimates
Ariyanto Kurniawan (+6221 5296 9682) [email protected] Wesley Louis Alianto (+6221 5296 9510) [email protected]
Bank BJB: 2Q20 Results & Analyst Meeting Takeaways (BJBR; Rp965; Buy; TP: Rp860)
BJBR booked net income of Rp807bn in 1H20, +1% YoY, accounting for 64% of consensus/Mansek’s expectations. Loan growth is still in the low double digit, while deposit growth was muted. NIM was maintained at 5.5% in 1H20, while NPL declined to 1.6%. The bank has restructured around 2.1% of its loan book as of Jun-20. Maintain Buy.
BJBR booked net income of Rp807bn in 1H20, +1% YoY, accounting for 64% of consensus and Mansek’s FY20 expectations. PPOP declined -14% YoY due to faster increase in opex than in operating income growth. Meanwhile, operating profit declined -8% YoY, helped by reduction in provision expenses by -63% YoY. BJBR’s 2Q20 net income stood at Rp391bn, +3% YoY/-6% YoY.
Loan growth at +10% YoY/+4% QoQ, deposit growth at +1% YoY/+2% QoQ. Loan growth was mainly supported by the consumer segment (64% of total loans) at +8% YoY, followed by commercial segment (22%) at +19% YoY, mortgage (7%) at +6% YoY, and micro segment (7%) at +5% YoY. Deposit growth was supported by saving accounts at +7% YoY, while time deposit growth was flat and demand deposits declined -2% YoY. LDR increased to 95% in Jun-20 from 88% a year ago, while CASA ratio was stable at 50%.
NIM was maintained at 5.5% in 1H20 and 1H19, while on quarterly basis, NIM improved to 5.6% in 2Q20 from 5.4% in 1Q20 over reduction in CoF, while asset yield was relatively stable.
NPL declined to 1.6% in Jun-20 from 1.7% in Jun-19 but stable since Mar-20. Improvement in NPL is seen in the commercial segment NPL to 5.1% from 6.0% in Jun-19, followed by the micro segment to 2.5% from 3.4%, while other segments saw stable NPL YoY. SML increased to 3.0% in Jun-20 from 2.8% in Mar-20, restructured loans to 2.1% from 0.3%, hence loan at risk increased to 6.5% from 4.7%. Cost of credit declined to 0.1% in 1H20 from 0.3% in 1H19, while on
Please see important disclosure at the back of this report Page 6 of 35 Equity Research | 30 July 2020
the quarterly basis, BJBR reported a small write-back in 2Q20. Coverage ratio declined to 131% in Jun-20 from 140% in Mar-20. BJBR indicates that write-off in 1H20 stood at Rp174bn vs. Rp151bn last year.
Restructured loans progress. The management stated that BJBR has restructured Rp1.9tn of loans (2.1% of total loans) belonging to 4.8k debtors as of Jun-20, wherein total loans in the pipeline were at Rp4tn (4.4% of total loans), belonging to 6.5k debtors. The largest portion of the restructured loans came from the commercial segment at around 20%, followed by SME at 14%, mortgage at 8%, while consumer loans remained small at only 0.2%.
State fund placement totaled Rp2.5tn, at 3.2% rate pa. The funds will be disbursed to productive loans, particularly to SMEs. The bank plans to disburse the funds through secondary bank (BPR).
Merger update with Bank Banten (BEKS). The bank claimed it is still on due diligence process, which is expected to be finalized in Jul-20. It will announce the results on its AGM on 1-Sep-20. BEKS’s shareholders are currently working to re- capitalize the bank by converting Rp1.5tn of regional funds into capital to support BEKS’s CAR requirement.
Maintain Buy with TP of Rp860. BJBR is now trading at 0.9x 2020F P/BV. FY2020 targets: loan growth of 4-5%, deposit growth of 9-10%, NPL of 1.6-1.8%, NIM of 5.4-5.7%, CAR of 16.5-17.0%.
BJBR 1H20 RESULTS % of Income Statement FY20 6M19 6M20 % YoY 2Q19 1Q20 2Q20 % YoY % QoQ FY20F % FY20F FY20F (Rp bn) Cons Cons Net interest income 2,970 3,075 4 1,475 1,499 1,577 7 5 5,976 51
Non interest income 499 601 20 253 333 268 6 (19) 1,073 56
Fees and Commisions 24 22 (7) 12 13 9 (21) (27) 61 36
Forex Income 7 26 282 8 10 16 100 56 14 189
Others 469 553 18 233 310 243 4 (22) 998 55
Operating income 3,469 3,677 6 1,728 1,832 1,845 7 1 7,049 52 7,468 49 Provision expense (124) (46) (63) (62) (55) 9 (115) (117) (622) 7
Operating expense (2,262) (2,640) 17 (1,148) (1,230) (1,409) 23 15 (4,817) 55
Personnel Expenses (1,028) (1,265) 23 (491) (572) (693) 41 21 (2,065) 61
Other Expenses (1,235) (1,375) 11 (657) (658) (717) 9 9 (2,752) 50
Operating profit 1,082 991 (8) 518 546 445 (14) (19) 1,609 62 1,587 62 PPOP 1,206 1,037 (14) 580 601 436 (25) (28) 2,231 46
Pre-tax profit 1,029 998 (3) 493 539 459 (7) (15) 1,579 63 1,635 61 Net profit 800 807 1 380 417 391 3 (6) 1,260 64 1,267 64
Balance Sheet (Rp bn) Jun-19 Mar-20 Jun-20 % YoY % QoQ
Gross loan 83,194 88,071 91,291 10 4
Demand deposit 27,487 25,097 26,975 (2) 7
Saving deposit 19,874 19,470 21,204 7 9
Time deposit 47,714 49,241 47,878 0 (3)
Total deposit 95,076 93,807 96,057 1 2
CASA to deposits (%) 49.8 47.5 50.2
Ratio (%) 6M19 6M20 2Q19 1Q20 2Q20
CAR 16.7 15.6 16.7 16.9 15.6
Tier 1 CAR 14.4 12.9 14.4 14.3 12.9
LDR 87.5 95.0 87.5 93.9 95.0
NIM 5.50 5.51 5.47 5.40 5.62
ROE 14.4 14.4 13.7 14.5 14.5
NPL, cat.3-5 (bank only) 1.7 1.6 1.7 1.6 1.6
SML 3.6 3.0 3.6 2.8 3.0
Cost of credit 0.3 0.1 0.3 0.3 (0.0)
Loan loss coverage (bank only) 95 131 95 140 131
Restructured Loans 0.1 2.1 0.1 0.3 2.1
Loan at Risk 5.5 6.5 5.5 4.7 6.5
Cost to Income 65.2 71.8 66.5 67.2 76.4
Source: Company, Mandiri Sekuritas estimates
Silvony Gathrie (+6221 5296 9544) [email protected] Tjandra Lienandjaja (+6221 5296 9617) [email protected]
Please see important disclosure at the back of this report Page 7 of 35 Equity Research | 30 July 2020
Bank Jatim: 1H20 Results & Analyst Meeting Takeaways
BJTM’s net income stood at Rp770bn in 1H20, accounting for 64% of consensus and 67% of our expectation. PPOP declined -3% YoY, mainly over the weak margin. Loans affected by COVID-19 stood at 3.1% of total loans in Jun-20, amongst the lowest in the industry. Maintain Buy.
BJTM’s 1H20 net income was at Rp770bn, -6% YoY, accounting for 64% of consensus FY20 expectation and 67% of ours. Weak top-line growth (despite decent loan growth) and rising provision expenses both led to the decline in net income growth. PPOP declined 3% YoY while 2Q20 net income totaled Rp331bn, -19% YoY/-25% QoQ, still due to weak top-line growth, rising provisioning expenses, and opex growth trending up.
Loan growth at +13% YoY/+2% QoQ, deposit growth at +10% YoY/+11% QoQ. Loan growth came mainly from the consumer segment (60% of total portfolio) at +10% YoY/flat QoQ, followed by commercial segment (24%) at +18% YoY/+8% QoQ and SME (16%) at +16% YoY/+1% QoQ. Meanwhile, deposit growth was driven by saving deposits at +17% YoY, followed by time deposits at +13% YoY, and demand deposits at +4% YoY (government funds in current accounts slid by -6% YoY and in time deposits by -24% YoY due to regional budget relocation). This brings CASA ratio to 68% in Jun-20 from 69% last year, while LDR stood at 61% vs. 60% over the same period. The bank plans to raise LDR level to 62-65% for 2020.
NIM declined to 6.0% in 1H20 from 6.6% in 1H19, mostly on declining asset yield, while on quarterly basis, NIM also declined to 6.1% from 6.2% in 1Q20 due to rising CoF.
NPL increased to 4.27% in Jun-20 from 3.35% in Mar-20. The largest deterioration in NPL was seen in the SME segment to 7.86% from 5.42% in Mar-20, followed by the commercial segment to 11.57% from 10.02%, and the consumer segment, which posted a slight increase in NPL to 0.39% from 0.32%. The significant increase in SME segment NPL was due to the time it takes to review and process loan restructuring proposals before approval (BJTM’s approval rate close to 100%). Hence, we should expect SME segment NPL to improve next quarter. Moreover, SML increased to 3.8% from 3.5% in Mar-20. Cost of credit increased to 1.5% in 1H20 from 1.2% in 1H19, while coverage ratio declined to 73% from 83% in Mar-20. The bank indicated write-off in 1H20 totaled Rp45bn vs. Rp379bn in 1H19.
Restructured loans progress. BJTM has restructured Rp1.2tn of loans belonging to 1.9k debtors as of Jun-20, equivalent to 3.1% of outstanding loans, while another Rp311bn loans are still under process. The largest portion came from the commercial segment at 2.3% of total loans, followed by SME at 0.7%, while consumer segment’s restructured loans remained small at only 0.1%, given they are mostly salary based loans. The bank indicates that restructured loans as of 24-Jul-20 have increased to Rp1.4tn (3.6% of total loans) to 2.2k debtors, with Rp466bn under process.
State funds disbursement strategy. BJTM targets to disburse the state funds placement in the bank amounting to Rp2tn to the following segments: ~Rp2tn for commercial segment, ~Rp800bn for micro and retail, and ~Rp1tn for consumer segment.
Maintains Buy with TP of Rp590. BJTM is trading at 0.9x 2020F P/BV. The bank mentioned the revised FY20 targets as follows: loan growth at 6-8%, deposit growth at 4-6%, NPL at 4.2-4.5%, NIM at 5.9-6.2%, and pretax profit growth of -25 to -30% YoY (vs. our forecast at -23% YoY for 2020F).
BJTM 1H20 RESULTS % of Income Statement % of FY20 6M19 6M20 % YoY 2Q19 1Q20 2Q20 % YoY % QoQ FY20F FY20F (Rp bn) FY20F Consensus Consensus Net interest income 1,974 2,007 1.7 994 1,015 991 (0) (2) 4,162 48
Non-interest income 278 265 (4.5) 143 142 123 (14) (13) 599 44
Fees and Comms. 210 219 4.2 110 113 106 4 (7) 442 49
Others 68 46 (31.5) 33 29 17 (48) (40) 157 30
Operating income 2,252 2,272 0.9 1,137 1,157 1,114 (2) (4) 4,761 48 4,623 49 Provision expense (197) (281) 42.4 (89) (120) (160) 80 33 (620) 45
Please see important disclosure at the back of this report Page 8 of 35 Equity Research | 30 July 2020
% of Income Statement % of FY20 6M19 6M20 % YoY 2Q19 1Q20 2Q20 % YoY % QoQ FY20F FY20F (Rp bn) FY20F Consensus Consensus Operating expense (944) (1,004) 6.3 (487) (478) (526) 8 10 (2,740) 37
Personnel Expenses (417) (456) 9.2 (205) (205) (251) 22 23 (1,311) 35
Other Expenses (527) (548) 4.0 (283) (273) (275) (3) 1 (1,429) 38
Operating profit 1,110 987 (11.1) 560 559 428 (24) (23) 1,401 70 1,519 65 PPOP 1,307 1,268 (3.0) 650 680 588 (9) (13) 2,021 63
Pre-tax profit 1,118 981 (12.3) 565 563 418 (26) (26) 1,432 68 1,563 63 Net profit 816 770 (5.6) 411 439 331 (19) (25) 1,146 67 1,198 64
Balance Sheet (Rp bn) Jun-19 Mar-20 Jun-20 % YoY % QoQ
Gross loan 34,769 38,415 39,181 13 2
Demand deposit 22,644 18,737 23,470 4 25
Saving deposit 17,146 18,023 20,068 17 11
Time deposit 18,143 21,004 20,471 13 (3)
Total deposit 57,933 57,764 64,008 10 11
CASA to deposits (%) 68.7 63.6 68.0
Ratio (%) 6M19 6M20 2Q19 1Q20 2Q20
CAR 23.2 21.1 23.2 22.9 21.1
Tier 1 CAR 22.3 20.1 22.3 21.9 20.1
LDR 60.0 61.2 60.0 66.5 61.2
NIM 6.6 6.0 6.6 6.2 6.1
ROE 18.9 16.6 18.8 18.7 14.1
NPL, cat.3-5 3.16 4.27 3.16 3.35 4.27
SML, cat. 2 1.8 3.8 1.8 3.5 3.8
Cost of credit 1.2 1.5 1.0 1.3 1.7
Loan loss coverage 92.4 73.0 92 83 73
Cost to Income 41.9 44.2 42.9 41.3 47.2
Restructured Loans 0.4 3.5 0.4 0.3 3.5
Loan at risk 5.2 11.5 5.2 7.0 11.5
Source: Company, Mandiri Sekuritas
Silvony Gathrie (+6221 5296 9544) [email protected] Tjandra Lienandjaja (+6221 5296 9617) [email protected]
Bank Niaga 1H20 Results - Flat PPOP Growth, Rising CoC (BNGA; Rp780; Buy; TP: Rp840)
BNGA posted 1H20 net income of Rp1.7tn, -12% yoy, represented 62% of FY20 consensus and 75% of our expectations. PPOP grew flat with operating income grew flat and opex declined -1% yoy. 2Q20’s net income was Rp690bn, -33% yoy/-35% yoy, on rising provision expenses and weak non-interest income growth.
Loan growth -2%yoy/ -4% qoq, deposit growth +3% yoy/+1% qoq. We believe Loan growth comes from the consumer lending, but this was offset by commercial segment consolidation due to the high NPL. On the deposit side, savings deposit posted the highest growth at +16% yoy followed by demand deposits at 8% yoy while time deposits contracted by -6% yoy; hence CASA ratio improved to 54% in Jun-20 from 49% in Jun-19. LDR stood at 91% in Jun-20 vs. 96% a year ago.
NIM declined to 4.9% in 1H20 from 5.2% in 1H19 on faster reduction in asset yield than in CoF. 2Q20’s NIM remained stable at 4.9% since 1Q20.
Cost to income ratio was kept at 51% in Jun-20 and Jun-19.
Please see important disclosure at the back of this report Page 9 of 35 Equity Research | 30 July 2020
NPL increased to 3.9% in Jun-20 from 3.0% in Mar-20 and 2.8% in Jun-19. SML declined to 5.1% from 7.8% in Mar-20, restructured loans jumped to 17.7% from 3.4% in Mar-20 while loan at risk is now at 22.6% vs. 12.6%. Cost of credit increased to 2.1% in 1H20 from 1.6% in 1H19 with coverage ratio declined to 150% in Jun-20 from 177% in Mar-20.
Maintain Buy with TP Rp840. BNGA is currently trading at 0.5x 2020F P/BV.
Income Statement 6M19 6M20 YoY 2Q19 1Q20 2Q20 YoY QoQ FY20 % FY20Cons % (Rp bn) Net interest income 6,316 6,203 (2) 3,279 3,068 3,134 (4) 2 12,492 50
Non-interest income 2,331 2,422 4 1,128 1,341 1,081 (4) (19) 5,225 46
Fees and 1,548 1,261 (19) 752 777 484 (36) (38) 3,069 41 Commissions Others 783 1,161 48 375 564 597 59 6 2,156 54
Operating income 8,647 8,625 (0) 4,406 4,410 4,215 (4) (4) 17,717 49 16,810 51 Provision expense (1,520) (2,021) 33 (809) (747) (1,275) 58 71 (5,434) 37
Operating expense (4,453) (4,418) (1) (2,195) (2,295) (2,123) (3) (8) (9,257) 48
Personnel Expenses (2,045) (2,109) 3 (1,002) (1,074) (1,035) 3 (4) (5,237) 40
Other Expenses (2,408) (2,309) (4) (1,192) (1,221) (1,088) (9) (11) (4,020) 57
Operating profit 2,674 2,185 (18) 1,403 1,368 817 (42) (40) 3,026 72 3,444 63 PPOP 4,194 4,206 0 2,212 2,115 2,092 (5) (1) 8,460 50
Pre-tax profit 2,677 2,270 (15) 1,393 1,429 840 (40) (41) 3,076 74 3,467 65 Net profit 1,977 1,745 (12) 1,032 1,055 690 (33) (35) 2,340 75 2,822 62
Balance Sheet (Rp bn) Jun-20 Mar-20 Jun-21 YoY QoQ
Gross loan 190,532 194,282 186,084 (2) (4)
Demand deposit 48,373 52,541 52,462 8 (0)
Saving deposit 49,175 57,467 56,956 16 (1)
Time deposit 100,301 92,555 94,270 (6) 2
Total deposit 197,849 202,563 203,688 3 1
CASA to deposits (%) 49.3 54.3 53.7
Ratio (%) 6M19 6M20 2Q19 1Q20 2Q20
CAR 20.6 20.0 20.6 19.4 20.0
Tier 1 CAR 19.4 18.8 19.4 18.1 18.8
LDR 96.3 91.4 96.3 95.9 91.4
NIM 5.2 4.9 5.4 4.9 4.9
ROE 9.7 8.5 10.2 10.3 6.6
NPL, cat.3-5 2.8 3.9 2.8 3.0 3.9
Special mention loans 3.7 5.1 3.7 7.8 5.1
Cost of credit 1.6 2.1 1.6 1.5 2.2
Loan loss coverage 100.4 150.0 100.4 177.2 150.0
Restructured loans 3.4 17.7 3.4 3.4 17.7
Loan at risk 8.5 22.6 8.5 12.6 22.6
Cost to Income 51 51 50 52 50
Silvony Gathrie (+6221 5296 9544) [email protected] Tjandra Lienandjaja (+6221 5296 9617) [email protected]
BTPN Syariah: 1H20 Results and Analyst Call Takeaways (BTPS; Rp3,430; Buy; TP: Rp3,200)
BTPS booked Rp407bn net income in 1H20, -33% YoY, forming 43% of consensus and 34% of our expectation. Loans grew by only +2% YoY, while deposits grew +7% YoY. 1H20 NIM declined to 23.3% from 29.9% last year, while NPL increased to 1.79% from 1.43%. BTPS’s communities under red zone now stand at 30%, recovering from the peak at 55% in May-20. Maintain Buy.
1H20 net income stood at Rp407bn, -33% YoY, forming 43% of consensus and 34% of our FY20 expectations. Declining net income was mainly attributed to declining net interest income growth by -7% YoY and rising provisioning expenses by +175% YoY. Meanwhile, cost saving initiatives brought down opex by -12% YoY. PPOP declined by -3% YoY. In 2Q20 alone, net profit stood at a mere Rp4bn, -99% YoY/-99% QoQ, due to deterioration in margin and significant increase in provision expenses, as the lockdown ruling has prohibited BTPS from doing regular collection and disbursement to around 55% of its communities at the peak in May-20 before recovering to 30% in Jun-20.
Please see important disclosure at the back of this report Page 10 of 35 Equity Research | 30 July 2020
Loan growth at +2% YoY/-5% QoQ, deposit growth of +7% YoY/-2% QoQ. Muted loan growth was due to a combination of +4.2% YoY increase in number of customers, while the average ticket size was stable. Deposit growth was driven by saving deposits at +9% YoY, time deposits at +6% YoY, and demand deposits at +1% YoY. CASA ratio stood at 21% in Jun-20 vs. 20% in Jun-19, while LDR declined to 92% in Jun-20 vs. 96% in Jun-19.
NIM declined to 23.3% in 1H20 from 29.9% in 1H19, mainly due to lower asset yield. 2Q19 NIM also declined quite significantly to 17.4% from 28.8% in 1Q20 over the same reason, since the sharia principle restricted BTPS from accruing interest during the lockdown period.
Cost-to-income ratio increased to 44.5% in 1H20 from 47.1% in 1H19. 2Q20 cost-to-income ratio increased to 52.6% from 39.7% in 1Q20.
NPL increased to 1.79% in Jun-20 from 1.43% in Mar-20. SML declined to 0.3% from 1.7% in Mar-19, while restructured loans rose significantly to 68.6% from 2.6% in Mar-20. Hence loan at risk increased to 70.0% from 5.6% in Mar-20. Cost of credit increased to 8.7% in 1H20 from 3.6% in 1H19, while coverage ratio increased to 351% from 230% in Mar-20.
Analyst call takeaways: − BTPS’s communities under red zone now stand at 30%, improving from the peak at 55% in May-20, since the large- scale social distancing has been lifted in their areas. BTPS stated that 25% of its communities are able to pay their due without requesting specific relaxation. The remaining 30% under red zone have continued to receive payment holiday, with field officers resuming to check on customers’ businesses and lockdown statuses on a bi-weekly basis through phone calls. Most of the customers under red zone are now in cycle 4 and above, followed by those in cycle 1. − BTPS plans to start its restructuring process in Jul-20, expecting that by then, the social distancing rule will have been mostly lifted and BTPS will be allowed to conduct visitations. Businesses that are severely affected by COVID-19 will be given additional 6 months of payment holiday, while those that are not will be given additional 3 months. BTPS anticipates that 20% of the communities will still need payment holiday until year end. − The management notes that only a small number of customers has actually applied for government interest subsidy program, since most BTPS customers don’t have tax ID and they prefer it that way. Meanwhile, BTPS has recently signed an agreement with Askrindo and Jamkrindo Syariah on a government loan guarantee program, which will reduce BTPS’s risk weighted asset (RWA) calculation from the average of 75% currently to 20% for new loans extended. − BTPS claimed to have started to disburse new loans starting in Jun-20, under the requirement that the customers’ businesses are still running and that good communication can be maintained. For customers in green areas (mostly outside Java), field officers are given the flexibility to look for new customers. − Cost of credit guidance has been revised up to 9% for now from previously 5-6%, but this is highly dependent on the lockdown status as well as customers’ repayment capacity post lockdown. − Cost savings have been made through negotiation with vendors, delaying non-pivotal development plans. BTPS has also made some adjustment in variable costs, particularly salary expenses.
We have a Buy rating with TP of Rp3,200. The counter is currently trading at 4.0x P/BV 2020F.
BTPS 1H20 RESULTS % of Income Statement % of FY20 6M19 6M20 % YoY 2Q19 1Q20 2Q20 % YoY % QoQ FY20F FY20F (Rp bn) FY20F Cons Cons Net interest income 1,807 1,672 (7) 949 1,048 624 (34) (40) 3,946 42
Non interest income 9 14 55 4 8 6 47 (20) 19 73
Fees and Commisions 0 3 1,156 0 1 2 1,484 97 2 193
Others 9 11 26 4 7 4 4 (37) 17 62
Operating income 1,816 1,686 (7) 954 1,055 630 (34) (40) 3,965 43 3,587 47 Provision expense (142) (391) 175 (76) (99) (292) 282 195 (421) 93
Operating expense (854) (751) (12) (448) (419) (332) (26) (21) (1,993) 38
Please see important disclosure at the back of this report Page 11 of 35 Equity Research | 30 July 2020
% of Income Statement % of FY20 6M19 6M20 % YoY 2Q19 1Q20 2Q20 % YoY % QoQ FY20F FY20F (Rp bn) FY20F Cons Cons Personnel Expenses (518) (498) (4) (266) (276) (223) (16) (19) (821) 61
Other Expenses (337) (252) (25) (182) (143) (109) (40) (24) (1,171) 22
Operating profit 819 544 (34) 429 537 7 (98) (99) 1,551 35 1,224 44 PPOP 961 935 (3) 505 636 299 (41) (53) 1,973 47
Pre-tax profit 818 547 (33) 428 538 9 (98) (98) 1,548 35 1,249 44 Net profit 610 407 (33) 321 402 4 (99) (99) 1,189 34 943 43
Balance Sheet (Rp bn) Jun-19 Mar-20 Jun-20 % YoY % QoQ
Gross loan 8,544 9,166 8,741 2 (5)
Demand deposit 25 27 25 1 (10)
Saving deposit 1,755 2,032 1,922 9 (5)
Time deposit 7,104 7,620 7,516 6 (1)
Total deposit 8,884 9,679 9,462 7 (2)
CASA to deposits (%) 20.0 21.3 20.6
Ratio (%) 6M19 6M20 2Q19 1Q20 2Q20
CAR 39.4 42.3 39.4 42.4 42.3
Tier 1 CAR 38.7 41.6 38.7 41.8 41.6
LDR 96.2 92.4 96.2 94.7 92.4
NIM 29.9 23.3 30.4 28.8 17.4
ROE 28.4 14.7 28.9 28.8 0.3
NPL, cat.3-5 1.34 1.79 1.34 1.43 1.79
SML 1.09 0.26 1.09 1.72 0.26
Cost of credit 3.6 8.7 3.8 4.4 13.0
Loan loss coverage 223 351 223 230 351
Restructured Loan 1.1 68.6 1.1 2.6 68.6
Loan at risk 3.5 70.0 3.5 5.6 70.0
Cost to Income 47.1 44.5 47.0 39.7 52.6
Source: Company, Mandiri Sekuritas estimates
Silvony Gathrie (+6221 5296 9544) [email protected] Tjandra Lienandjaja (+6221 5296 9617) [email protected]
Bank Panin 1H20 Results: Loan Growth Continues Weak Trend (PNBN; Rp805; Buy; TP: Rp1,100)
PNBN reported Rp1.3tn net income in 1H20, -18% YoY, equivalent to 52% of consensus FY20 expectation and 66% of ours. Loan growth continued its declining trend to -9% YoY, with all segments demonstrating declining growth YoY. 1H20 NIM slightly improved due to reduction in CoF, while loan at risks increased. Maintain Buy.
PNBN reported 1H20 net income of Rp1.3tn, -18% YoY, accounting for 52% of consensus and 66% of our expectation. Negative loan growth and rising provision expenses were the two culprits of declining bottom-line growth. PPOP grew flat, since opex growth was a tad higher than the flat operating income growth. On quarterly basis, 2Q20 net income was at Rp615bn, -22% YoY/-10% YoY, due to weaker margin and rising trend in provision expenses, which we think was caused by the rising number of restructured loans affected by the pandemic in the quarter.
Loan growth at -9% YoY/-7% QoQ, deposit growth at +1% YoY/+4% QoQ. The bank continued to lend less, with the largest decline in loan growth seen in the commercial and consumer loans, which both saw -13% YoY decline, followed by corporate loans at -8% YoY. Deposit growth was mainly driven by saving deposits at +5% YoY, while demand deposit grew flat and time deposits contracted by -1% YoY, resulting in CASA ratio of 36% in Jun-20 vs. 35% in Jun-19. Meanwhile,
Please see important disclosure at the back of this report Page 12 of 35 Equity Research | 30 July 2020
LDR improved to 99% in Jun-20 from 109% in Jun-19, with LFR remaining adequate at 85% in Jun-20 vs. 92% in Jun-19 due to bonds and sub-debt issuance.
NIM improved to 4.7% in 1H20 from 4.6% in 1H19 due to larger reduction in CoF than in asset yield. On quarterly basis, NIM declined to 4.3% from 5.1% in 1Q20, largely caused by reduction in asset yield, while CoF was stable. We believe the asset yield reduction was driven by rising restructured loans as well as central rate cut pass-through to customers.
Cost-to-income ratio was stable at 49% in 1H20 and 1H19, while on quarterly basis, the ratio declined to 46% in 2Q20 from 52% in 1Q20.
NPL was kept stable at 2.9% in Jun-20 and Mar-20. SML ratio declined to 4.5% in Jun-20 from 5.4% in Mar-20, while restructured loans jumped to 21.8% from 6.9%. This has brought loan at risk to increase to 25.2% in Jun-20 from 11.7% in Mar-20. Cumulative cost of credit increased to 1.3% in 1H20 from 0.6% in 1H19, similar with its quarterly trend, which increased to 1.4% in 2Q20 from 1.2% in 1Q20. PNBN’s coverage ratio slightly declined to 148% in Jun-20 from 159% in Mar-20.
Update on restructured loans. As of end of Jun-20, PNBN has given loan relaxations to around 20-22% of its loan book, mainly to loans in the SME/commercial and mortgage segments, while the corporate segment has been quite resilient. The bank has no definite loan restructuring target yet, but it thinks that 25% of loan book may need to be restructured for now.
Maintain Buy with TP of Rp1,100. PNBN is currently trading at 0.5x 2020F P/BV.
PNBN 1H20 RESULTS % of Income Statement % of FY20 6M19 6M20 % YoY 2Q19 1Q20 2Q20 % YoY % QoQ FY20F FY20F (Rp bn) FY20F Cons Cons Net interest income 4,347 4,453 2 2,198 2,404 2,049 (7) (15) 8,944 50
Non-interest income 796 708 (11) 371 481 227 (39) (53) 1,842 38
Fees and Commissions 379 246 (35) 191 147 100 (48) (32) 786 31
Forex Income 26 104 302 13 72 33 152 (55) 55 189
Others 391 358 (9) 167 263 95 (43) (64) 1,001 36
Operating income 5,144 5,162 0 2,569 2,885 2,276 (11) (21) 10,785 48 10,123 51 Provision expense (476) (960) 102 (206) (463) (497) 142 8 (3,018) 32
Operating expense (2,502) (2,529) 1 (1,280) (1,494) (1,035) (19) (31) (5,298) 48
Personnel Expenses (1,028) (1,012) (1) (516) (509) (504) (2) (1) (2,172) 47
Other Expenses (1,474) (1,516) 3 (764) (985) (531) (31) (46) (3,126) 49
Operating profit 2,166 1,673 (23) 1,083 929 744 (31) (20) 2,469 68 2,940 57 Non-operating profit 44 54 24 22 55 (1) (106) (102) 205 26
PPOP 2,642 2,633 (0) 1,289 1,391 1,242 (4) (11) 5,487 48
Pre-tax profit 2,209 1,727 (22) 1,105 984 743 (33) (24) 2,674 65 3,063 56
Net profit 1,595 1,300 (18) 792 684 615 (22) (10) 1,976 66 2,521 52
Balance Sheet (Rp bn) Jun-19 Mar-20 Jun-20 % YoY % QoQ
Gross loan 153,509 150,580 139,622 (9) (7)
Demand deposit 10,250 11,160 10,276 0 (8)
Saving deposit 38,966 40,624 41,015 5 1
Time deposit 91,285 84,137 90,025 (1) 7
Total deposit 140,500 135,920 141,315 1 4
CASA to deposits (%) 35.0 38.1 36.3
Please see important disclosure at the back of this report Page 13 of 35 Equity Research | 30 July 2020
Ratio (%) 6M19 6M20 2Q19 1Q20 2Q20
CAR 23.4 25.9 23.4 23.9 25.9
Tier 1 CAR 20.4 23.3 20.4 21.3 23.3
LDR 109.3 98.8 109.3 110.8 98.8
NIM 4.55 4.69 4.56 5.10 4.33
ROE 8.3 6.4 8.1 6.8 6.2
NPL, cat.3-5 2.9 2.9 2.9 2.9 2.9
Special mention loans 3.6 4.5 3.6 5.4 4.5
Cost of credit 0.6 1.3 0.5 1.2 1.4
Loan loss coverage 87 148 87 159 148
Restructured Loan 6.6 21.8 6.6 6.9 21.8
Loan at risk 10.8 25.2 10.8 11.7 25.2
Cost to Income 48.6 49.0 49.8 51.8 45.5
Source: Company, Mandiri Sekuritas
Silvony Gathrie (+6221 5296 9544) [email protected] Tjandra Lienandjaja (+6221 5296 9617) [email protected]
Bekasi Fajar: 2Q20: Continued Core Loss (BEST; 125; Neutral; TP: Rp130)
BEST saw qoq improvement in 2Q20 with handover of a larger parcel of land, however was still weak as 1H20 revenue declined -59% yoy, below expectations. BEST still saw core loss in 2Q20, widening 1H20 core loss to IDR 50bn. We have BEST at Neutral.
Revenue growth qoq from land sale handover. BEST saw +83% qoq revenue growth as it handed over IDR 50bn in presold land to Yamaha Musical Products in 2Q20, bringing land sales revenue increase of 197% qoq although still down -44% yoy. Additionally, maintenance fees revenues saw stable growth. Accumulated, 1H20 revemue of IDR 154bn was down -59% yoy and translates to just 21% of Mansek and consensus’ full-year estimates.
Margin improvement. Gross and operating level margins saw improvement resulting from the higher land sales contribution which are higher-margin and have been stable at 72%. Accumulated, 1H20 gross margin was a stark improvement due to the 1H19 GM having been dragged down by related party sales handover in 1Q19.
Net profit driven by forex gain, core earnings loss. Helped by IDR 181bn in forex gains, BEST saw IDR 189bn in PATMI in 2Q20, +892% yoy and from IDR 226bn loss in 1Q20. This brought 1H20 PATMI to IDR 44bn, -74%, still significantly below full-year expectations at 12% of Mansek’s full-year expectations and 11% of consensus’. On a core basis, BEST still booked core loss in 2Q20 amounting to IDR 19bn, bringing accumulated 1H20 core loss to IDR 50bn.
Presales lagging, target reduction. Unlike some of its peers, BEST’s 1H20 presales has been lagging at 0 hectares. The company has also reduced its full-year target to 10-15ha, from 30ha prior. The new target compares well with our expectations of 10ha this year.
Maintain Neutral. We maintain Neutral call on BEST as despite the fall-off in share price, the counter’s issues with delivering contiguous land plots and high ASP should hinder presales and earnings in the near term.
BEST 2Q20 RESULTS VS ESTIMATES % of % of IDRbn 1Q20 2Q20 2Q19 QoQ % YoY% 6M19 6M20 YoY% 2020F 2020C target cons Revenue 54 99 124 83% -20% 371 154 -59% 738 737 21% 21% Gross profit 31 67 77 121% -12% 225 98 -56% 492 492 20% 20% Operating profit 5 38 48 632% -20% 170 44 -74% 376 397 12% 11% Net profit (226) 189 19 -184% 892% 114 (37) -133% 107 133 -35% -28%
Please see important disclosure at the back of this report Page 14 of 35 Equity Research | 30 July 2020
% of % of IDRbn 1Q20 2Q20 2Q19 QoQ % YoY% 6M19 6M20 YoY% 2020F 2020C target cons Core (31) (19) 35 130 (50) 170
Gross margin 56% 68% 62% 61% 64% 67% 67%
Operating margin 10% 39% 39% 46% 28% 51% 54%
Net margin N/A 190% 15% 31% -24% 14% 18%
Total debt 2,114 1,829 1,897 1,897 1,829 1,944
Total equity 4,242 4,431 4,202 4,202 4,431 4,541
Cash 711 593 1,028 1,028 593 773
Net gearing 33.1% 27.9% 20.7% 20.7% 27.9% 25.8%
Revenue 53 100 124 88% -19% 371 154 -59%
Land 17 50 89 197% -44% 300 67 -78%
Maintenance 29 29 26 2% 12% 52 58 12%
Hotel 3 1 4 -77% -81% 8 4 -45%
Others 4 20 5 368% 346% 11 25 127%
GP 31 67 77 121% -12% 225 98 -56%
Land 12 36 64 193% -44% 199 48 -76%
Maintenance 16 15 11 -6% 37% 20 31 55%
Hotel (0) (2) (0) 715% 1065% (1) (2) 94%
Others 3 19 2 594% 857% 7 21 187%
GPM 57.1% 67.2% 61.8% 60.6% 63.7%
Land 72.9% 72.0% 72.1% 66.2% 72.2%
Maintenance 54.9% 50.6% 41.1% 38.0% 52.7%
Hotel -7.1% -249.3% -4.1% -14.8% -52.7%
Others 62.1% 92.1% 43.0% 68.9% 86.8%
Source: Company, Mandiri Sekuritas estimates
Robin Sutanto (+6221 5296 9572) [email protected]
Charoen Pokphand Indonesia 2Q20 Earnings: Better than Expectations (CPIN; Rp6,200; Buy; TP; Rp5,500)
CPIN just released its short-form 1H20 statement with revenue, gross profit and PATMI came above our estimates. Better- than-feared top-line growth decline might be contributed from solid processed food segment. Gross margin recorded relatively stable achievement compare to competitor while SG&A to sales ratio remained manageable.
2Q20 revenue of Rp13.7trn (-9% yoy) came slightly above compare our forecast while in-line with consensus estimates. Long-form details are not yet disclosed, but we see top-line growth decline was attributed to demand slowdown due to the pandemic. The solid processed food business as a result of hygiene concern and stay-at-home initiatives might partly offset the feeble DOC and commercial farming segments, considering the volume decline due to lower chick-in activity and weak yoy DOC price.
2Q20 gross profit of Rp1.7trn (-11% yoy) beat our estimates by 10% while in-line with consensus forecast. Gross margin slightly declined by 0.3ppt yoy, much better compare to JPFA at 4.5ppt yoy. We believe the feed segment remain the backbone of this relatively better margin, given the successful harvest in 1Q20 on top of lower demand from smaller feed millers resulted in low raw material prices in 2Q20. We also see the processed food segment also helped the gross profit achievement, in view of benign DOC (-24% yoy) and broiler (+2% yoy) prices in 2Q20.
Please see important disclosure at the back of this report Page 15 of 35 Equity Research | 30 July 2020
2Q20 PATMI of Rp731bn (-20% yoy) beat our estimates by 30% and street forecast by 8%. The better-than-expected achievement at gross level was supported by manageable costs at operating expenses level. Unlike competitor JPFA, SG&A to sales ratio remained stable at 4.9% in 2Q20 (+0.2ppt yoy). We think CPIN’s advantage of market leader in feed, DOC and commercial farming segments enable them in maintaining higher economies of scale that resulted in better costs control compare to competitors.
Valuation and recommendation. We will review our forecasts to incorporate 2Q20 numbers. We currently have Buy rating with Rp5,500 PT.
CPIN’S 2Q20 RESULT SUMMARY % of % of CPIN 2Q20 1Q20 %qoq 2Q19 %yoy 6M20 6M19 %yoy Mansek Cons Net sales 13,712 13,890 -1.3% 15,118 -9.3% 27,601 29,573 -6.7% 53% 49% Gross profit 1,709 1,940 -11.9% 1,929 -11.4% 3,649 3,644 0.1% 60% 51% Operating profit 1,031 1,299 -20.6% 1,207 -14.6% 2,331 2,263 3.0% 71% 53% Pretax profit 901 1,158 -22.2% 1,143 -21.2% 2,059 2,147 -4.1% 80% 53% Net profit 731 922 -20.8% 916 -20.2% 1,653 1,727 -4.3% 80% 58%
Margins
Gross margin 12.5% 14.0% -1.5% 12.8% -0.3% 13.2% 12.3% 0.9%
Operating margin 7.5% 9.4% -1.8% 8.0% -0.5% 8.4% 7.7% 0.8%
Pretax margin 6.6% 8.3% -1.8% 7.6% -1.0% 7.5% 7.3% 0.2%
Net margin 5.3% 6.6% -1.3% 6.1% -0.7% 6.0% 5.8% 0.1%
Source: Company, Bloomberg, Mandiri Sekuritas
Riyanto Hartanto (+6221 5296 9488) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]
Erajaya Swasembada: 2Q20 Results: Above Expectations (ERAA; Rp1,450; Buy; TP: Rp1,500)
Erajaya Swasembada just released the newspaper-version of its 1H20 results, with relatively manageable revenue decline and solid business margin. The company also continued to enhance its balance sheet through strong cash balance and lower ST debts. We think this solid performance will continue in 2H20 as we should see further impact of IMEI implementation. Maintain BUY.
2Q20 Revenues of Rp6.66tn (-19.9% YoY, -14.7% QoQ) beat our estimates. We are waiting for the full disclosure for revenue breakdown details. The relatively strong performance in 2Q20 can be attributed to better-than-expected demand trend in Cellular Phones. In addition, Computer & Other Electronic Devices sales must have benefitted from work-from-home (WFH) activities during large-scale social distancing, we think. On a 6-month basis, Erajaya booked Rp14.5tn Revenues in 1H20, down 6.3% YoY vs. in 1H19 and forming 47.0%/50.2% of ours/consensus FY 20 revenue estimates.
2Q20 Gross Profit of Rp556bn (-8.2% YoY, -28.5% QoQ) beat our estimates. Cost of revenues declined 20.8% YoY in 2Q20, relatively in-line with revenue drop in the same period. This should indicate the company’s success in managing inventory turnover during local Covid-19 outbreak. As a result, gross margin increased 106bps to 8.4% in 2Q20, higher than our estimates. On a 6-month basis, Erajaya booked Rp1.33tn Gross Profit in 1H20, up 6.5% YoY vs. in 1H19.
Meanwhile, Operating expenses declined 3.5% YoY in 2Q20. Selling and Distribution expenses declined 6.8% YoY in 2Q20 while G&A expenses slightly increased by 1.4% YoY in the same period. We believe the company managed to negotiate rental expenses for its retail stores too. Operating margin declined 15bps to 1.2% in 2Q20. On a 6-month basis, Erajaya booked Rp267bn Operating Profit in 1H20, up 1.0% YoY vs. in 1H19 and forming 113.1%/48.1% of ours/consensus estimates.
Please see important disclosure at the back of this report Page 16 of 35 Equity Research | 30 July 2020
2Q20 Net Profit of Rp11bn (-82.7% YoY, -89.6% QoQ) beat our estimates. Non-operating increased to Rp54bn in 2Q20 vs. Rp11bn in 2Q19, mainly driven by ‘Other’ expenses. Meanwhile, Interest expenses declined 48.9% YoY in 2Q20 as the company reduced its ST debts from Rp2.7tn in FY19 to Rp787bn in 2Q20. On a 6-month basis, Erajaya booked Rp113bn Net Profit in 1H20, up 3.9% YoY vs. in 1H19 and forming 80.8%/46.2% of ours/consensus estimates.
Maintain Buy. Erajaya continued to deliver relatively strong performance in 2Q20, driven by better-than-expected demand recovery and massive online sales initiatives during large-scale social distancing period. We also highlighted that the company has relatively strong cash balance at Rp721bn in 2Q20 to support faster business recovery in 2H20. This solid performance will likely be continued in 2H20 as IMEI implementation should start to show its impact.
ERAA: 2Q20 RESULTS % of % of vs in Rp bn 2Q19 1Q20 2Q20 2Q20F % YoY % QoQ 6M19 6M20 % YoY FY20 FY20 Mansek's cons. Mansek Revenues 8,305 7,807 6,656 4,645 -19.9% -14.7% 43.3% 15,429 14,463 -6.3% 50.2% 47.0%
Cost of revenues 7,699 7,028 6,100 4,309 -20.8% -13.2% 41.6% 14,176 13,129 -7.4%
Gross profit 606 778 556 336 -8.2% -28.5% 65.4% 1,253 1,334 6.5%
% Gross margin 7.3% 10.0% 8.4% 7.2% 106 bps -161 bps 112 bps 8.1% 9.2% 110 bps
Selling & distribution 293 321 273 213 -6.8% -14.9% 28.2% 578 593 2.6% expenses G&A expenses 198 273 201 198 1.4% -26.6% 1.4% 411 474 15.5%
Operating expenses 491 594 473 411 -3.5% -20.3% 15.3% 989 1,067 8.0%
Operating profit 115 184 82 (75) -28.3% -55.2% N.A. 264 267 1.0% 48.1% 113.1% % Operating margin 1.4% 2.4% 1.2% -1.6% -15 bps -112 bps N.A. 1.7% 1.8% 13 bps
Finance income 0 1 0 1 67.0% -38.8% -23.7% 0 1 N.A.
Finance costs (87) (54) (45) (30) -48.9% -16.9% 48.6% (188) (98) -47.7%
Share of profit from 5 3 (3) 5 N.A. N.A. N.A. 9 (0) N.A. associated companies Other income 71 27 (7) 10 N.A. N.A. N.A. 97 20 -79.5% (expenses) Non-operating (11) (24) (54) 6 N.A. N.A. N.A. (82) (78) -5.2% income (expenses)
Pretax profit 104 160 28 (69) -72.8% -82.4% N.A. 182 189 3.8%
Taxes (36) (50) (14) (5) -60.6% -71.6% N.A. (57) (65) 12.4%
% Effective tax rate 34.8% 31.3% 50.4% -7.2% N.A. N.A. N.A. 31.6% 34.2% 260 bps
Minority interest (6) (7) (3) (8) -45.2% -55.6% -55.7% (15) (11) -29.0%
PATAMI 62 103 11 (82) -82.7% -89.6% N.A. 109 113 3.9% 46.2% 80.8% % PATAMI margin 0.7% 1.3% 0.2% -1.8% -58 bps -115 bps N.A. 0.7% 0.8% 8 bps
Source: Company Data, Mandiri Sekuritas Research estimates
Henry Tedja (+6221 5296 9434) [email protected] Kresna Hutabarat (+6221 5296 9542) [email protected]
Please see important disclosure at the back of this report Page 17 of 35 Equity Research | 30 July 2020
Indocement 2Q20: Below Estimates due to Seasonality (INTP; Rp12,400; Buy; TP: Rp14,500)
INTP’s 1H20 fell short of expectations due to a feeble 2Q20 impacted by the festive season and lockdown, while cost savings initiatives fell short, leading to net profit of just IDR 70bn for the quarter, -71% yoy and -83% qoq. Accumulated, 1H20 net profit translated to 30% of consensus’ full-year expectations. Maintain Buy as we expect sales volumes to normalize in the coming quarters.
1H20 revenue, net profit below expectations. INTP booked 1H20 reveue of IDR 6.2tn, -10% yoy and PATMI of IDR 470bn, -27% yoy, translating to 43%/30% of consensus’ and 43%/28% of Mansek’s full-year estimates, below expectations. 2Q20 revenue fell -13% yoy and -16% qoq impacted by the festive season and lockdown during the period while a corresponding decrease in fixed costs did not occur. 2Q20 net profit was just IDR 70bn, -71% yoy and -83% qoq.
Margin decline. 2Q20 saw -1% yoy and qoq declines in blended ASP, mainly dragged by sharp falls in ready-mix concrete and aggregates sales, however excluding these, cement and clinker ASP increased +4% yoy and +2% qoq, as bag sales proportion increased. Accumulated, 1H20 blended ASP still increased +1% yoy. On the flipside, this was stripped off by COGS/ton increasing+1% yoy and +3% qoq in 2Q20, which led to a fall in gross margin to 29%.
Higher delivery and fixed costs per ton. Overall cash cost/ton in 1H20 rose +2% yoy as the company saw increases in delivery costs (+8% yoy on a per-ton basis) and +12% in sales-related salary costs along with manufacturing overheads (+21.3% yoy on a per-ton basis), despite a -16% yoy fall in non-selling salary expenses. Meanwhile, persistent increase in lower CV coal and alternative fuel components contributed to continued -5.5% decrease in power-and-fuel costs per ton.
Increase in tax rate. The company’s effective income tax rate rose to 24% in 2Q20, owing to the weak earnings. We expect the tax rate to normalize over the coming quarters and expect effective tax rate of 18.4% for the full-year.
Maintain Buy. We maintain Buy on INTP as we expect better recovery in 2H20. The counter now trades at US$ 107/ton, -1.6 SDs below 8-yr mean, and below brown field replacement cost of US$125. INTP’s position as second largest player with debt-free profile should render it a surviving entity amid ongoing challenges for the industry. Note that INTP announced earlier dividend per share of IDR 500, equivalent to dividend payout ratio of 100.3% from 2019’s net profit, translating to 4% dividend yield.
INTP 2Q20 RESULTS FY20 Consensus Mansek’s FY20 INTP quarterly earnings 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY Expectation Expectation Cement and Clinker Sales Vol 3,868 3,994 3,370 -13% -16% 8,405 7,364 -12% ('000 tons)
Cement/Clinker Only ASP 755 769 783 4% 2% 748 775 4%
COGS/ton (Rp/ton) 587 575 593 1% 3% 576 583 1%
Blended ASP total (Rp k/ton) 840 842 835 -1% -1% 831 839 1%
Cash Cost (Rp/ton) 714 685 726 2% 6% 691 703 2%
Delivery cost/ton (Rp/ton) 123,760 128,251 132,556 7% 3% 120,300 130,221 8%
Sales (Rpbn) 3,250 3,363 2,812 -13% -16% 6,983 6,175 -10% 14,450 43% 14,430 43% Cost of good sold 2,271 2,298 1,997 -12% -13% 4,840 4,295 -11%
Gross Profit 979 1,064 815 -17% -23% 2,143 1,880 -12% 4,961 38% 5,022 37% Operating Expense 769 771 694 -10% -10% 1,557 1,465 -6%
Operating Profit 210 294 121 -42% -59% 585 415 -29% 1,663 25% 1,841 23% EBITDA 488 628 367 -25% -42% 1,173 996 -15% 2,977 33% 3,047 33% Pretax Profit 298 458 92 -69% -80% 797 550 -31% 1,942 28% 2,049 27% Tax (54) (58) (22) -59% -62% (157) (80) -49%
Net Profit 243 400 70 -71% -83% 640 470 -27% 1,581 30% 1,673 28%
Please see important disclosure at the back of this report Page 18 of 35 Equity Research | 30 July 2020
FY20 Consensus Mansek’s FY20 INTP quarterly earnings 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY Expectation Expectation Gross Margin 30.1% 31.7% 29.0% -1.1% -2.7% 30.7% 30.4% -0.2%
Operating Margin 6.5% 8.7% 4.3% -2.2% -4.4% 8.4% 6.7% -1.7%
Pretax Margin 9.2% 13.6% 3.3% -5.9% -10.4% 11.4% 8.9% -2.5%
Tax Rate -18.2% -12.6% -24.0% -5.8% -11.5% -19.7% -14.5% 5.2%
Net Margin 7.5% 11.9% 2.5% -5.0% -9.4% 9.2% 7.6% -1.6%
EBITDA Margin 15.0% 18.7% 13.1% -2.0% -5.6% 16.8% 16.1% -0.7%
Source: Company, Mandiri Sekuritas
Robin Sutanto (+6221 5296 9572) [email protected]
Indosat 2Q20 Earnings Call Summary (ISAT; Rp2,340; Buy; TP: Rp3,200)
Indosat’s Management shared latest financial and operational trends in the company’s 2Q20 earnings call today. Below are the key notes from the call.
Competition. − The market has seen additional ‘unlimited’ product choices recently, but Indosat is not looking into returning into the ‘unlimited’ product strategy anymore. In Indosat’s experience, Unlimited product is not sustainable and is not transparent to customers. Indosat has been moving customers from its ‘unlimited’ subscriptions to Freedom Internet subscriptions – a strategy that contributed to Indosat’s strong ARPU growth in 2Q20. − Indosat does not split the country into Java or Ex Java, but into 250+ micro clusters. Revenue growth occurred across the clusters, though Jabodetabek (Greater Jakarta) regions fared better than others in 1H20.
ARPU Growth − Management attributed the strong ARPU growth to 4G LTE network coverage improvement, commercial, and distribution performance in 1H20. − Indosat’s simple and more transparent offering, combined with improving network quality, have helped building sustainable month-on-month revenue growth momentum in 2Q20. Focus will remain on maintaining network quality to deliver competitive customer experience, rather than on other strategies (such as price changes). − Indosat’s success in improving indoor and residential network coverage had been instrumental in driving ARPU growth too. As more subscribers use their homes as offices, the demand for reliable mobile internet picks up. So, network experience will become a more determining factor to sustain mobile data usage volume, and hence, revenue growth.
Network − The decline in 2G & 3G BTS numbers can be attributed to completed spectrum refarm program. 4G BTS count will continue to grow as 4G LTE network expansion remains priority. − Close to 78% of Indosat’s spectrum utilization is already for 4G LTE as of 1H20-end. Meanwhile, 2G network switch-off will continue as 2G device mix in the country declines too. − Despite challenges, network expansion progress remains on track with balanced delivery between transport capacity and RAN investments.
ISAT: 2Q20 RESULTS % of Vs % of FY20F in Rp bn 2Q19 1Q20 2Q20 2Q20F YoY QoQ 6M19 6M20 YoY FY20F Mansek's Mansek Cons. 180 144 130 140 -27.7% -9.4% -6.9% 342 274 -19.8% Fixed 5,103 5,372 5,769 5,459 13.1% 7.4% 5.7% 9,962 11,141 11.8% Cellular 962 1,008 1,029 901 7.0% 2.1% 14.2% 1,988 2,036 2.4% MIDI Revenue 6,245 6,523 6,929 6,500 10.9% 6.2% 6.6% 12,292 13,452 9.4% 50.0% 48.8%
Please see important disclosure at the back of this report Page 19 of 35 Equity Research | 30 July 2020
% of Vs % of FY20F in Rp bn 2Q19 1Q20 2Q20 2Q20F YoY QoQ 6M19 6M20 YoY FY20F Mansek's Mansek Cons. 2,848 2,866 2,898 2,925 1.8% 1.1% -0.9% 5,853 5,764 -1.5% Cost of services 631 893 539 615 -14.6% -39.6% -12.3% 1,001 1,432 43.1% Personnel 261 249 292 280 11.9% 17.2% 4.4% 558 542 -2.9% Marketing 229 134 149 180 -34.9% 11.2% -17.2% 447 283 -36.6% G&A 3,969 4,143 3,879 4,000 -2.3% -6.4% -3.0% 7,859 8,022 2.1% Operating expenses
EBITDA 2,276 2,380 3,050 2,500 34.0% 28.2% 22.0% 4,433 5,430 22.5% 52.8% 50.8% 36.4% 36.5% 44.0% 38.5% 757 bps 753 bps 556 bps 36.1% 40.4% 430 bps % margin
2,338 2,468 2,494 2,475 6.7% 1.1% 0.8% 4,711 4,961 5.3% D&A
Operating profit (61) (88) 556 25 N.A. N.A. N.A. (278) 469 N.A. 173.0% 70.4% -1.0% -1.3% 8.0% 0.4% N.A. N.A. 765 bps -2.3% 3.5% N.A. % margin (3) (77) 26 - N.A. N.A. N.A. 31 (51) N.A. Gain (Loss) on forex (8) 94 (72) - N.A. N.A. N.A. (18) 23 N.A. Gain on derivatives 17 69 49 30 N.A. N.A. 64.2% 34 118 N.A. Interest income (661) (722) (714) (750) 8.1% -1.1% -4.8% (1,309) (1,436) 9.7% Interest expense - - - - N.A. N.A. N.A. - - N.A. Investment income 257 35 35 35 -86.3% 0.0% 0.7% 590 71 N.A. Extraordinary items 369 178 368 700 -0.3% N.A. N.A. 472 546 N.A. Others (28) (422) (308) 15 N.A. -27.0% N.A. (200) (730) N.A. Non-operating items (90) (510) 248 40 N.A. N.A. N.A. (478) (261) 82.9% Pretax profit (49) 84 (27) 30 -44.7% N.A. N.A. (156) 56 N.A. Taxes 54.6% -16.4% -10.9% 75.6% N.A. N.A. N.A. 32.7% -21.6% N.A. % effective tax rate 1 (13) (11) (15) N.A. -13.1% -27.4% (11) (23) -54.8% Minority interest
Net profit (39) (606) 265 (5) N.A. N.A. N.A. (332) (341) -2.7% 32.6% 28.6% -0.6% -9.3% 3.8% -0.1% N.A. N.A. N.A. -2.7% -2.5% N.A. % margin
Operating stats 2Q19 1Q20 2Q20 2Q20F YoY QoQ 6M19 6M20 YoY
56,700 56,160 57,200 0.9% 1.9% 56,700 57,200 0.9% Total Subscribers ('000) 43,092 43,973 45,131 4.7% 2.6% 43,092 45,131 4.7% Smartphone subscribers 76.0% 78.3% 78.9% 290 bps 60 bps 76.0% 78.9% 3.8% % smartphone penetration
726 550 495 -31.8% -10.0% 1,481 1,044 -29.5% Voice revenues (Rp bn) 34.1 29.2 29.9 -12.3% 2.4% 35.5 29.5 -16.9% MoU (in bn minutes) 21.3 18.8 16.5 -22.3% -12.2% 41.7 35.4 -15.1% Voice yield (Rp/min)
3,846 4,397 4,945 28.6% 12.5% 7,308 9,342 27.8% Data revenues (Rp bn) 755,930 1,015,373 1,201,259 58.9% 18.3% 1,378,806 2,216,632 60.8% Data payload (TB) 5.1 4.3 4.1 -19.1% -4.9% 5.3 4.2 -20.5% Data yield (Rp/MB)
29,300 29,600 33,200 13.3% 12.2% ARPU blended (Rp) 26,900 28,000 31,700 17.8% 13.2% Prepaid 111,500 86,300 84,900 -23.9% -1.6% Postpaid Source: Company Data, Mandiri Sekuritas Research estimates
Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected]
Please see important disclosure at the back of this report Page 20 of 35 Equity Research | 30 July 2020
Japfa Comfeed 2Q20: Muted Cost Saving Initiatives on Top of Higher Interest Expenses (JPFA; Rp1,105; Buy; TP: Rp1,100)
JPFA recorded EBIT loss in 2Q20, largely dragged by muted cost saving initiatives at SG&A level and higher interest expenses due to additional loans. At gross level, JPFA still booked relatively in-line achievement compared to our FY20 forecast. On segmental basis, all-time high feed margin was unable to offset the feeble ASP in breeding and commercial farming segments.
2Q20: below. JPFA booked 2Q20 net loss of Rp189bn, which deteriorated 1H20 earnings to Rp155bn (-81% YoY) at 24%/11% of our/consensus numbers. Earnings were below our FY estimate and quarterly preview as a result of muted cost savings at operating expense level and higher interest expenses due to additional bank loans in 1H20. SG&A-to-sales ratio increased by 3.9 ppt YoY, mainly attributed to higher salaries & allowance (+7% YoY) and freight (+80% YoY). Additional bank loans of Rp3tn in 1H20 compared to FY19 resulted in interest expenses of Rp215bn (+21% YoY) in 2Q20. At gross level, JPFA managed to book relatively in-line result compared to our FY20 estimate, with 49% achievement.
Key highlights by division: − Feed: sequential EBIT margin improvement helped overall performance. 2Q20 revenues of Rp2.2tn (-39% YoY) and EBIT of Rp683bn (-23% YoY) each achieved 44% and 63% of our numbers. EBIT recorded sequential improvement of 6.6 ppt/5.5 ppt YoY/QoQ, even after all-time high margin in 1Q20. Successful harvest in 1Q20 on top of lower demand from smaller feed millers due to the pandemic resulted in lower raw material prices in 2Q20. The low-single digit YoY ASP decline implied low-30s volume drop, which we think was a result of lower chick-in activity in 2Q20. − DOC: double whammy of ASP normalization and volume decline. 2Q20 revenues of Rp502bn (-40% YoY) were above our estimate, with 58% achievement. The mid-20s YoY ASP decline implied mid-teen volume drop in 2Q20. We expect narrowing EBIT loss in 2H20 as a result of demand and sequential ASP recovery. − Commercial farming: price recovery in June unable to improve margin. 2Q20 revenues of Rp3.5tn (-4% YoY) were above our forecast, with 63% achievement. The better-than-feared revenue growth implied high single-digit volume decline given the low single-digit YoY ASP growth in 2Q20. EBIT loss slightly deteriorated to Rp175bn from Rp157bn, as price recovery in June was unable to offset the steep loss in April and May.
Valuation and recommendation. We will update more details after Japfa Ltd’s earnings call today at 9 AM, JKT time. We currently have Buy rating with Rp1,100 PT.
JPFA’S 2Q20 RESULT SUMMARY % of JPFA 2Q20 1Q20 %QoQ 2Q19 %YoY 6M20 6M19 %YoY % of Cons Mansek Net sales 7,831 9,080 -13.8% 9,678 -19.1% 16,910 18,243 -7.3% 52% 46% Gross profit 1,183 1,593 -25.7% 1,897 -37.6% 2,775 3,321 -16.4% 49% 42% Operating profit 107 576 -81.4% 942 -88.7% 683 1,462 -53.3% 38% 23% Pretax profit -224 467 -148.0% 786 -128.6% 243 1,247 -80.5% 29% 12% Net profit -189 344 -154.9% 519 -136.4% 155 829 -81.3% 24% 11%
Margins
Gross margin 15.1% 17.5% -2.4% 19.6% -4.5% 16.4% 18.2% -1.8%
Operating margin 1.4% 6.3% -5.0% 9.7% -8.4% 4.0% 8.0% -4.0%
Pretax margin -2.9% 5.1% -8.0% 8.1% -11.0% 1.4% 6.8% -5.4%
Net margin -2.4% 3.8% -6.2% 5.4% -7.8% 0.9% 4.5% -3.6%
% of Segmental performance 2Q20 1Q20 %QoQ 2Q19 %YoY 6M20 6M19 %YoY Mansek Net revenue breakdown
Feed 2,175 3,112 -30.1% 3,569 -39.0% 5,287 6,930 -23.7% 44.2%
DOC 502 653 -23.2% 830 -39.5% 1,155 1,620 -28.7% 58.0%
Commercial & Consumer Products 3,527 3,591 -1.8% 3,664 -3.7% 7,118 6,693 6.3% 63.3%
Aquaculture 734 851 -13.7% 791 -7.2% 1,585 1,515 4.6%
Cattle 419 315 33.3% 525 -20.0% 734 828 -11.3%
Trading others 313 373 -16.0% 142 119.9% 686 313 119.3%
Please see important disclosure at the back of this report Page 21 of 35 Equity Research | 30 July 2020
% of JPFA 2Q20 1Q20 %QoQ 2Q19 %YoY 6M20 6M19 %YoY % of Cons Mansek EBIT breakdown
Feed 683 806 -15.2% 886 -22.8% 1,490 1,402 6.3% 63.2%
DOC (244) 50 -584.4% 321 -176.0% (194) 726 -126.7% n.m.
Commercial & Consumer Products (175) (157) 11.8% (126) 38.8% (332) (391) -15.1% n.m.
Aquaculture 43 66 -35.4% 50 -14.6% 109 81 34.4%
Cattle (37) (34) 7.5% 0 n.m. (71) (6) n.m.
Trading others 50 64 -22.1% 56 -11.2% 114 100 13.6%
EBIT margin
Feed 31.4% 25.9% 5.5% 24.8% 6.6% 28.2% 20.2% 7.9%
DOC -48.6% 7.7% -56.4% 38.7% -87.3% -16.8% 44.8% -61.6%
Commercial & Consumer Products -5.0% -4.4% -0.6% -3.4% -1.5% -4.7% -5.8% 1.2%
Aquaculture 5.8% 7.8% -2.0% 6.3% -0.5% 6.9% 5.4% 1.5%
Cattle -8.8% -10.9% 2.1% 0.1% -8.9% -9.7% -0.7% -9.0%
Trading others 15.9% 17.1% -1.2% 39.4% -23.5% 16.6% 32.0% -15.4%
Source: Company, Bloomberg, Mandiri Sekuritas
Riyanto Hartanto (+6221 5296 9488) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]
Kalbe Farma: 2Q20 Short-Form Result - In-line (KLBF; Rp1,525; Buy; TP: Rp1,650)
Overall earnings came in-line with estimates, though it was more supported by a steep cut in selling expenses. Meanwhile, the flat revenue growth in 2Q20 came below expectation. Details are not yet disclosed.
2Q20 Revenue of Rp5.8tn (-0.1% YoY) came below estimates; overall 1H20 Revenue of Rp11.6tn (+3.8% YoY) formed 47%/48% of our/consensus’ FY20 estimates. Details of segmental performance are yet to be disclosed, though previous discussions with KLBF reveal tougher sales at outpatient-proxy Pharmaceutical products compared to others. An element of pantry stocking was also apparent, pushing 2Q20 sales ahead to 1Q20 which grew by 8% YoY. 1H20 revenue growth of 3.8% YoY is slightly below verbal guidance of mid-single digit growth.
2Q20 EBIT of Rp896bn (+4.5% YoY) came in-line with estimates; overall 1H20 EBIT of Rp1.7tn (+5.6% YoY) formed 49%/50% of our/consensus’ FY20 estimates. KLBF’s gross margin slightly declined by 0.7ppt YoY to 45.4%, which may be attributable to the higher contribution of distribution business, not purely from raw material inflation. Big cost efficiency in selling expense in 2Q20 (-7% YoY) helped bring a growth in EBIT, while the growths of G&A and R&D expense are kept minimal at 3% and 1%, respectively.
2Q20 NPAT of 718bn (+8.3% YoY) came in-line with estimates; overall 1H20 NPAT of Rp1.38tn (+10.3% YoY) formed 50%/52% of our/consensus’ FY20 estimates. The stronger NPAT growth was driven by lower effective tax rate of 21% in 2Q20 (vs. 25% in 2Q19). No significant other income/expense drew non-operating earnings growth.
2Q20 RESULT SUMMARY % of % of Rp bn 6M20 6M19 % YoY 2Q20 2Q19 % YoY 1Q20 % QoQ MANSEK CONS Net sales 11,604.5 11,178.7 3.8% 5,808.9 5,813.2 -0.1% 5,795.6 0.2% 47.2% 48.1% Gross profit 5,252.6 5,176.7 1.5% 2,635.3 2,679.0 -1.6% 2,617.3 0.7% 47.6% 48.9% Operating profit 1,715.0 1,623.4 5.6% 896.0 857.5 4.5% 818.9 9.4% 49.9% 50.1% Net profit 1,387.3 1,258.2 10.3% 718.0 663.1 8.3% 669.3 7.3% 50.2% 52.3%
Gross margin 45.3% 46.3% -1.0% 45.4% 46.1% -0.7% 45.2% 0.2%
Operating 14.8% 14.5% 0.3% 15.4% 14.8% 0.7% 14.1% 1.3% margin Net margin 12.0% 11.3% 0.7% 12.4% 11.4% 1.0% 11.5% 0.8%
Source: Company, Bloomberg, Mandiri Sekuritas estimates
Lakshmi Rowter (+6221 5296 9549) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]
Please see important disclosure at the back of this report Page 22 of 35 Equity Research | 30 July 2020
Mayora Indah: 2Q20 Short-Form Result - Below (MYOR; Rp2,350; Buy; TP: Rp2,650)
Overall earnings came below estimates, though revenue run-rate had improved QoQ in 2Q20. FX reversal caused the steep NPAT drop, but core profit drop is more contained. We have a Buy call on MYOR.
2Q20 Revenue of Rp5.7tn (-5.7% YoY) came below estimates; overall 1H20 Revenue of Rp11tn (-8.1% YoY) formed 42%/43% of our/consensus’ estimates. Details of domestic/export and segmental performances are yet to be disclosed. However, in-line with Management’s statement last week, monthly run-rate had somewhat improved; 2Q20 sales grew 6% QoQ, as MYOR ramped up its export sales, particularly in the Philippines, while domestic GT network had stabilized. 2Q20 revenue drop of 5.7% is also improving from 1Q20’s 11% revenue drop.
2Q20 EBIT of Rp486bn (-16% YoY) came below estimates; overall 1H20 EBIT of Rp1.2tn (-12% YoY) formed 34%/38% of our/consensus’ estimates. Though gross profit still dropped as expected at 8% YoY to 1.7tn in 2Q20, EBIT drop was higher than expected. Indeed, selling expense grew 45% QoQ and grew flat YoY; we suspect a quarterly ramp-up of A&P spending as Management previously guided no cuts in promotional budget.
2Q20 NPAT of Rp7bn (-98% YoY) came below estimates; overall 1H20 NPAT of 938bn (+16% YoY) formed 33%/43% YoY. MYOR booked FX loss of Rp479bn in 2Q20, a reversal from 1Q20’s Rp605bn FX gain. Core profit of Rp362bn dropped only by 3.3%, as we strip out the FX gain.
2Q20 RESULTS SUMMARY % of % of Rp bn 6M20 6M19 % YoY 2Q20 2Q19 % YoY 1Q20 % QoQ MANSEK CONS Net sales 11,082 12,058 -8.1% 5,703 6,045 -5.7% 5,380 6.0% 42.5% 43.0% COGS 7,703 8,441 -8.7% 3,980 4,176 -4.7% 3,723 6.9% 43.1% 43.2% Gross profit 3,379 3,618 -6.6% 1,722 1,869 -7.8% 1,657 3.9% 41.2% 42.4% Operating profit 1,216 1,382 -12.0% 486 578 -15.9% 730 -33.4% 33.6% 38.3% Pretax profit 1,229 1,092 12.6% (37) 444 -108.2% 1,266 -102.9% 32.7% 41.0% Net profit 938 807 16.2% 7 341 -97.9% 931 -99.2% 32.8% 42.9% Core profit 840 887 -5.3% 362 375 -3.3% 477 -24.1% 34.5% n/a
Gross margin 30.5% 30.0% 0.5% 30.2% 30.9% -0.7% 30.8% -0.6%
Operating margin 11.0% 11.5% -0.5% 8.5% 9.6% -1.0% 13.6% -5.0%
Pre-tax margin 11.1% 9.1% 2.0% -0.6% 7.3% -8.0% 23.5% -24.2%
Net margin 8.5% 6.7% 1.8% 0.1% 5.6% -5.5% 17.3% -17.2%
Source: Company, Bloomberg, Mandiri Sekuritas estimates
Lakshmi Rowter (+6221 5296 9549) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]
Siloam Hospital: 2Q20 Results and Earnings Call Takeaways (SILO; Rp4,550; Buy; TP: Rp7,150)
SILO saw the full-quarter impact of COVID-19 where fixed cost efficiency could not cover for the drop in patient volume and overall increase in material cost. Management remains cautious on 2H20 performance given the high volatility of volume run-rate and the fluid landscape of Indonesia’s COVID-19 handling.
2Q20 Gross Revenue of Rp1.3tn (-22% YoY) came below our and consensus’ estimates. Net of doctor’s fee, SILO’s Net Operating Revenue dropped by 19% YoY to Rp1.02tn in 2Q20; the decline was mostly attributable to weak overall volume, where outpatient and inpatient volume both declined by 45% YoY. Bed Occupancy Ratio (BOR) also dropped to 42% in 2Q20 (from 62% in 2Q19). All payee groups suffered similar declines, with Out of Pocket and Corporate & Insurance revenue declining by 28% YoY in 2Q20. Though BPJS revenue also suffered, but the basket of BPJS and Government-sponsored COVID-19 cases grew flat YoY to Rp347bn in 2Q20. Region 1 drove most of the weakness considering the severe cases in Jakarta and Surabaya; this also affected overall profitability given the affected performance of SILO’s Flagship hospitals. 1H20 Gross Revenue achieved 40%/45% of our/consensus’ FY20 estimates.
Please see important disclosure at the back of this report Page 23 of 35 Equity Research | 30 July 2020
2Q20 EBITDA of Rp82bn (-54.8% YoY) came below our and consensus’ estimates. Excluding the impact of PSAK 73, 2Q20 EBITDA would have dropped 90% YoY to Rp18bn. Overall earnings weakness was caused by operating deleverage, though some cost efficiency measures have been taken, including lower doctor’s fee to 21.5% of NOR in 2Q20 (from 25% in 2Q19) and a 4% YoY cut in overall operating cost. Nevertheless, some additional cost burden cannot be ruled out, including material cost which absorbed 45% of NOR in 2Q20 (from 40% in 2Q19). Overall, 2Q20 Net Loss of Rp149bn came below our and consensus’ estimates, given net profit estimates.
Management call reveals more uncertainty in COVID-19 handling: − Volume volatility remains. Although MoM growth in Jun’20 has turned positive, the trend is not significant enough to conclude that recovery will continue. Management does not disclose any earnings guidance for 2020. The volume weakness not only happened in the high-end segment (out of pocket and corporate/insurance patients), but also in the BPJS segment. Nevertheless, as SILO handled more than 2,000 COVID-19 patients (reimbursed by the Government), Government-sponsored segment grew flat YoY. − COVID-19 business. Aside from the >2,000 inpatient cases, SILO had also conducted more than 25,000 swab tests, 200,000 rapid tests, and 60,000 serology tests as of Jun’20. Though cost and ASPs of these services tend to be high in the beginning, all have started to normalize given the scale. SILO will also comply with the new price ceiling of rapid test at Rp150,000/test. Overall testing business is not losing money, though profitability is very thin. − Margin squeeze would continue. SILO is expected to experience further margin squeezes in 2H20 considering the volatility of COVID-19 handlings, including service claims and price control. The continuous usage of high-quality PPEs will also push material cost further up. SILO attempts to offset these inflations with further cuts at the operating expense. − Working capital weakness due to COVID-19. Overall cash cycle weakened in 2Q20 as stakeholders’ business speed slowed in 2Q20, while the bulk procurement of PPEs from China in Apr’20 contributed to the inventory days increase.
2Q20 RESULTS SUMMARY % of % of P&L (Rp bn) 6M20 6M19 YoY 2Q20 2Q19 YoY 1Q20 QoQ MANSEK Cons Revenue 3,176 3,377 -6.0% 1,299 1,666 -22.0% 1,876 -30.7% 40% 45%
Gross profit 956 1,081 -11.5% 327 518 -36.8% 629 -47.9% 37% 43%
EBIT 51 177 -71.0% (82) 74 n.m. 133 n.m. 12% 14%
Pretax profit (77) 86 n.m. (147) 32 n.m. 70 n.m. n.m. n.m.
Net profit (130) 5 n.m. (146) 2 n.m. 16 n.m. n.m. n.m.
Margins
Gross 30.1% 32.0% -1.9% 25.2% 31.1% -5.9% 33.5% -8.3%
EBIT 1.6% 5.2% -3.6% -6.3% 4.5% -10.8% 7.1% -13.4%
Net profit -4.1% 0.1% -4.2% -11.2% 0.1% -11.3% 0.9% -12.1%
Source: Company, Mandiri Sekuritas, Bloomberg
Lakshmi Rowter (+6221 5296 9549) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]
Please see important disclosure at the back of this report Page 24 of 35 Equity Research | 30 July 2020
Surya Citra Media 2Q20 Results: Margin Held Up Despite Pressures (SCMA; Rp1,280; Buy; TP: Rp1,800)
Revenue and earnings decline in 2Q20 are well-expected, but the improving net margin in the quarter (flat in 1H20) reflected steady internal control amidst external pressures. With economic growth gradually pacing up in 2H20, SCMA could regain revenue & earnings momentum in coming quarters. Retain BUY.
2Q20 Revenues of Rp1.06tn (-26.7% YoY, -19.0% QoQ). The strong revenue decline is attributable to the lower FTA TV ad spend due to economic and operational restrictions amidst Covid-19 crisis. Strict social distancing protocol limited fresh content production in first 2 months of 2Q20, while significant economic slowdown put brakes on national FTA TV ad spend. On a 6-month basis, SCM booked Rp2.36tn Revenues in 1H20, down 14.6% YoY vs, in 1H19 and forming 43.4% of consensus FY20 revenue estimate.
2Q20 Operating Profit of Rp393bn (-10.7% YoY, -5.5% QoQ). Program and broadcasting expenses declined 38.9% YoY in 2Q20 as the company stopped running live event programs, such as domestic soccer league and other sponsored events. Temporary drama content production halt also helped the lower content costs in 2Q20. Meanwhile, other operating expenses declined 23.4% YoY in 2Q20 as the company exercised cost discipline across all expense items. As a result, Operating margin improved 665bps to 37.2% in 2Q20 vs. 30.5% in 2Q19. On a 6-month basis, SCM booked Rp808bn Operating Profit in 1H20, down 9.6% YoY vs. in 1H19 and forming 48.7% of consensus FY20 operating profit estimate. Operating margin also improved 189bps YoY to 34.2% in 1H20.
2Q20 Net Profit of Rp289bn (-17.4% YoY, -7.1% QoQ). The company booked Non-Operating expenses of Rp26bn in 2Q20, mostly driven by ‘Other’ expenses and Share of loss of associated companies. However, effective tax rate declined to 25.0% in 2Q20 vs. 27.5% in 1Q20 – both still above FY20 statutory tax rate of 22%. On a 6-month basis, SCM booked Rp601bn Net Profit in 1H20, down 14.5% YoY vs. in 1H19 and forming 53.0% of consensus FY20 net profit estimate. Net margin held steady YoY at 25.4% in 1H20.
Maintain Buy. SCMA delivered strong operational and cost response to external pressures amidst Covid-19 crisis, leading to steady net margin in 1H20. With economic pace gradually picking up in 3Q20, SCMA is well-positioned to regain revenue momentum and build up earnings base in the coming quarters. Furthermore, digital busines diversification and strong balance sheet remain as additional capital for business growth and shareholder value enhancement in 2021-2022.
SCMA: 2Q20 RESULTS % of in Rp bn 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY FY20 Cons. Revenues 1,442 1,304 1,057 -26.7% -19.0% 2,766 2,361 -14.6% 43.4%
Program and broadcasting expenses 667 581 407 -38.9% -29.9% 1,267 988 -22.0%
Gross Profit 775 724 650 -16.2% -10.2% 1,499 1,373 -8.4%
% Margin 53.8% 55.5% 61.5% 770 bps 601 bps 54.2% 58.2% 397 bps
Operating expenses 335 308 257 -23.4% -16.5% 604 565 -6.5%
Operating profit 440 416 393 -10.7% -5.5% 895 808 -9.6% 48.7% % Margin 30.5% 31.9% 37.2% 665 bps 530 bps 32.3% 34.2% 189 bps
Interest income 13 7 9 -35.7% 27.3% 29 15 -47.5%
Interest expense 0 (0) (0) -268.1% -15.9% (1) (1) -30.0%
Share of profit (loss) of associated companies (2) 6 (2) -9.9% n.a. 1 4 n.a.
Others (5) 25 (32) n.a. n.a. (8) (8) n.a.
Total other income (losses) 6 37 (26) n.a. n.a. 22 11 n.a.
Please see important disclosure at the back of this report Page 25 of 35 Equity Research | 30 July 2020
% of in Rp bn 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY FY20 Cons. Pretax profit 446 453 367 -17.9% -19.0% 916 819 -10.6%
Tax expense (113) (125) (92) -18.9% -26.4% (237) (216) -8.5%
% Tax rate 25.3% 27.5% 25.0% -31 bps -250 bps 25.8% 26.4% 61 bps
PAT 333 328 275 -17.5% -16.2% 680 603 -11.3%
% margin 23.1% 25.1% 26.0% 289 bps 85 bps 24.6% 25.5% 95 bps
Minority interest (17) 16 (15) n.a. n.a. (23) 2 n.a.
PATAMI 350 312 289 -17.4% -7.1% 703 601 -14.5% 53.0% % margin 24.3% 23.9% 27.4% 308 bps 350 bps 25.4% 25.4% 4 bps
Operating Stats 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY
All Time Audience Share %
SCTV 17.1% 17.1% 15.1% -200 bps -197 bps 16.8% 16.1% -70 bps
Indosiar 13.7% 17.1% 15.3% 157 bps -187 bps 14.4% 16.2% 180 bps
Total 30.8% 34.2% 30.4% -43 bps -383 bps 31.2% 32.3% 110 bps
Prime Time Audience Share %
SCTV 17.7% 19.9% 14.6% -307 bps -527 bps 18.2% 17.3% -97 bps
Indosiar 13.8% 15.6% 16.0% 227 bps 40 bps 14.0% 15.8% 185 bps
Total 31.5% 35.5% 30.7% -80 bps -487 bps 32.2% 33.1% 88 bps
Source: Company Data, Mandiri Sekuritas Research estimates
Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected]
Tower Bersama 2Q20 Results: Revenue & Profit Growth Accelerated (TBIG; Rp1,300; Buy; TP: Rp1,400)
Tower Bersama just released newspaper version of its financials, with revenue and net profit beating our estimates by 3% and 23%, respectively. Revenue growth accelerated, while net interest cost came lower than expected in 2Q20. Retain BUY.
2Q20 Revenues of Rp1.32tn (+14.8% YoY, +4.2% QoQ) beat our estimates by 3%. Full operational disclosure is not available yet, but we believe the strong revenue growth is attributable to strong colocation orders in 2Q20. On a 6-month basis, Tower Bersama booked Rp2.58tn Revenues in 1H20, up 13.2% YoY vs. in 1H19 and forming 50.1%/50.5% of our/consensus FY20 revenue estimates.
2Q20 Operating Profit of Rp940bn (+14.4% YoY, -0.4% QoQ) came relatively in-line with our estimates. Cost of revenues increased 24.5% YoY in 2Q20, higher than our expectation. But, other operating expenses declined 2.0% YoY to Rp105bn in 2Q20. As a result, Operating margin declined 24bps on YoY basis from 71.7% in 2Q19 to 71.4% in 2Q20. On a 6-month basis, Tower Bersama booked Rp1.88tn Operating Profit in 1H20, up 15.3% YoY vs. in 1H19 and forming 49.6%/51.2% of our/consensus FY20 Operating Profit estimates.
2Q20 Net Profit of Rp282bn (+71.8% YoY, +23.4% QoQ) beat our estimates by 18.6%. Non-operating expenses declined on QoQ basis to Rp542bn as the company booked lower interest expenses in 2Q20, benefitting from declining borrowing rates. Effective tax rate declined to 26.3%, below than our estimate in 2Q20 too. On a 6-month basis, Tower
Please see important disclosure at the back of this report Page 26 of 35 Equity Research | 30 July 2020
Bersama booked Rp510bn Net Profit in 1H20, up 33.6% YoY vs. in 1H19 and forming 47.8% of our and consensus FY20 Net Profit estimates.
Maintain BUY. Tower Bersama’s revenue growth acceleration in 1H20 implied the strong demand for tower space amidst 4G LTE network race. Tower business has so far thrived during the Covid-19 crisis as mobile network coverage and capacity expansion remain priority to mobile network operators in pursuit of revenue growth. Retain Buy on Tower Bersama.
TBIG: 2Q20 RESULTS vs of FY20F of FY20F in Rp bn 2Q19 1Q20 2Q20 2Q20F YoY QoQ 6M19 6M20 YoY Mansek's Mansek Cons Revenue 1,146 1,262 1,315 1,277 14.8% 4.2% 3.0% 2,277 2,577 13.2% 50.1% 50.5%
Cost of Revenues 217 212 271 219 24.5% 27.6% 23.8% 432 483 11.8%
Gross profit 929 1,050 1,045 1,058 12.5% -0.5% -1.3% 1,845 2,094 13.5%
% margin 81.0% 83.2% 79.4% 82.9% -161 bps -376 bps -345 bps 81.0% 81.3% 23 bps
Operating 107 106 105 112 -2.0% -1.2% -6.0% 213 212 -0.5% expenses
Operating profit 822 943 940 946 14.4% -0.4% -0.7% 1,633 1,883 15.3% 49.6% 51.2% % margin 71.7% 74.8% 71.4% 74.1% -24 bps -332 bps -269 bps 71.7% 73.1% 136 bps
Finance income 3 5 1 5 -58.6% -70.6% -73.4% 6 6 -2.1%
Finance charges (525) (570) (510) (585) -2.9% -10.6% 14.8% (1,030) (1,080) 4.9%
Investment properties' fair - - - - N.A. N.A. N.A. - - N.A. values gains (losses) Forex gains (4) 0 10 0 N.A. N.A. N.A. 10 10 6.4% (losses) Other operating (9) (38) (43) (10) N.A. 13.8% -76.9% (29) (81) N.A. expenses - net Other income (534) (603) (542) (590) 1.4% -10.2% 8.8% (1,042) (1,145) 9.9% (expenses)
PBT 287 340 398 357 38.5% 17.0% 11.5% 590 738 24.9%
% margin 25.1% 26.9% 30.2% 27.9% 518 bps 329 bps 230 bps 25.9% 28.6% 269 bps
Income tax (114) (95) (105) (104) -8.1% 10.0% -0.6% (188) (200) 6.4%
% effective tax 39.6% 28.0% 26.3% 29.1% N.A. -167 bps -285 bps 31.8% 27.1% -472bps rate
Minority interest (9) (16) (11) (15) 18.9% -31.7% 34.7% (21) (27) 33.1%
Net profit 164 229 282 238 71.8% 23.4% 18.6% 382 510 33.6% 47.8% 47.8% % margin 14.3% 18.1% 21.4% 18.6% 712 bps 332 bps 282 bps 16.8% 19.8% 303 bps
Source: Company Data, Mandiri Sekuritas Research estimates
Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected]
Please see important disclosure at the back of this report Page 27 of 35 Equity Research | 30 July 2020
Unilever Indonesia 2Q20 EPS: In-Line with Ours; Below Consensus (UNVR; Rp8,250; Buy; TP: Rp9,500)
While revenues were much resilient than expected, UNVR’s 2Q20 PATMI came out just in-line and slightly less than what the street is projecting. The miss was on gross margin (weaker) and SG&A (higher). Long-form financials are yet to be released, obstructing us from conducting segment analysis.
2Q20 PATMI: in-line with ours; slight miss to street. 2Q20 PATMI came at Rp1,757bn (-9.8% YoY), translated down from a 5.5% YoY drop in gross profit on lower gross margin (-2.1ppt/-2.2ppt YoY/QoQ) despite resilient revenues (-1.6% YoY). 1H20 PATMI came at Rp3,620bn (-2.1% YoY), achieving 48% of our FY20 (in-line) and 46% of consensus’ (below).
2Q20 EBIT: in-line with ours; slight miss to street. 2Q20 EBIT came at Rp2,352bn (-11.6% YoY) with 1H20 EBIT at Rp4,746bn (-5.5% YoY), 48%/46% of MANSEK/Consensus estimates. 2Q20 SG&A costs were flat, hence ratio-to-sales +1.5ppt YoY though -9.3ppt YoY. Selling expenses +0.3% YoY while G&A -1.0% YoY. For the 1H20, SG&A up 8.5% YoY to Rp6,438bn, already ahead of estimates (55% of our FY20), explaining the EBIT margin decline.
2Q20 revenues: above ours; in-line with the street. Aligned with the indicative 2Q20 results on 24 Jul, it only declined -1.6% YoY and -4.8% QoQ in 2Q20 despite the lockdowns, much better than our high-single-digit YoY decline. 1H20 revenues beat our estimates (52% of our FY20) yet in-line with the street (49%). As disclosed last week, domestic revenues down -1.1% YoY in 2Q20 (vs. +4.4% YoY in 1Q2) and still +2.4% YoY excluding Unilever Foods Solution (UFS) that deal with HORECA (Hotel, Restaurant, and Café).
Buy rating and Rp9,500 PT. Our DCF-based PT implies 39.1x 2021 PE at 9.0% WACC.
UNVR’S 2Q20 RESULTS
(Rp bn) 6M20 6M19 YoY 2Q20 2Q19 YoY 1Q20 QoQ % of MS % of C
Revenue 21,772 21,457 1.5% 10,619 10,793 -1.6% 11,153 -4.8% 52% 49% Gross profit 11,183 10,953 2.1% 5,336 5,647 -5.5% 5,848 -8.8% 52% 49% Selling exp. 4,291 3,944 8.8% 1,942 1,936 0.3% 2,349 -17.3% 56%
G&A exp. 2,147 1,986 8.1% 1,042 1,052 -1.0% 1,105 -5.7% 54%
EBIT 4,746 5,023 -5.5% 2,352 2,659 -11.6% 2,394 -1.8% 48% 46% PBT 4,603 4,956 -7.1% 2,264 2,626 -13.8% 2,339 -3.2% 48% 45% PATMI 3,620 3,697 -2.1% 1,757 1,949 -9.8% 1,863 -5.7% 48% 46%
Margins
Gross 51.4% 51.0% 0.3% 50.2% 52.3% -2.1% 52.4% -2.2%
EBIT 21.8% 23.4% -1.6% 22.1% 24.6% -2.5% 21.5% 0.7%
Net profit 16.6% 17.2% -0.6% 16.5% 18.1% -1.5% 16.7% -0.2%
Note: MS = Mandiri Sekuritas, C = Consensus. Source: Bloomberg, Company, Mandiri Sekuritas estimates
Adrian Joezer (+6221 5296 9415) [email protected] Riyanto Hartanto (+6221 5296 9488) [email protected] Lakshmi Rowter (+6221 5296 9549) [email protected]
United Tractors: Dragged Down by Weak Coal Price (UNTR; Rp21,500; Buy; TP: Rp22,500)
UNTR’s weak 1H20 net profit was below forecast as a result of record low coal prices (-24% YTD). Despite that, record-high gold price outlook should provide greater contribution on earnings next year, as its gold output remains unhedged.
1H20 net profit was below forecast on weak coal outlook. United Tractors (UNTR) reported 2Q20 net profit of Rp2.2tn (-11% YoY/+23% QoQ), bringing 1H20 net profit to Rp4.1tn (-27% YoY), below our forecast at 45% of our FY20F net profit of Rp8.9tn, but largely in-line with consensus at 51% of forecast. Weak coal prices, at record low now at USD 52/ton (-24%
Please see important disclosure at the back of this report Page 28 of 35 Equity Research | 30 July 2020
YTD), were the reason for weak earnings, as coal mining related business contributes around 85% of total revenues despite strong earnings contribution from gold (+33% YoY). 1H20 revenue declined to Rp33.1tn (-23% YoY) and operating margin also declined to 16% (from 19%), mainly due to weaker margin from coal mining, Pama, and construction machinery. We expect UNTR’s weak outlook will continue to 2H20, as we do not see meaningful recovery in coal prices, with gold being the only unit supporting this year’s earnings.
Key points to highlight in 2Q20: 1) Pama’s weak revenues (-29% YoY/-16% QoQ) in 2Q20 were due to lower-than- expected overburden (-11% YoY/-2% QoQ) and lower contractors’ margins from contractors’ fee-discount/cash-back to help coal miners cope with challenging coal prices. 2) Revenue from construction machinery (-45% YoY/-33% QoQ) was affected by lower sales volume (-68% YoY) despite slight recovery in blended price (3% YoY), possibly due to higher sales of big machine equipment. Revenues from parts-and-services have also softened (-28% YoY). 3) Revenues from coal mining (-14% YoY/-19% QoQ) were mainly due to lower ASP (-18% YoY) despite slightly higher sales volume (+3% YoY). UT generally reported weak sales volume in 3Q due to logistic issue and will recover in 4Q. 4) Revenues from gold mining (+22% YoY/+7% QoQ) were mainly driven by higher price (+22%yoy) while sales volume was flattish.
Maintain Buy, Rp22,500 TP. We still like UNTR for exposure to strong gold price outlook, as all of its gold production next year remains unhedged. Valuation remains attractive at 1.0x FY21F PBV, at par to the 2016 level despite having exposure to gold through Martabe.
FINANCIAL SUMMARY YE Dec (Rp Bn) 2018A 2019A 2020F 2021F 2022F EBITDA 21,395 23,045 19,657 19,920 20,459 Net Profit 11,126 11,312 8,962 9,195 9,471 Fully-diluted EPS 2,983 3,033 2,402 2,465 2,539 Fully-diluted EPS growth (%) 50.3 1.7 (20.8) 2.6 3.0 P/E Ratio (x) 7.2 7.1 8.9 8.7 8.5 EV/EBITDA (x) 3.4 3.5 4.0 3.5 3.0 P/B Ratio (x) 1.5 1.4 1.2 1.1 1.0 Dividend Yield (%) 4.5 5.7 3.4 3.4 3.5 ROAE (%) 22.4 20.2 14.6 13.6 12.8 Source: Company (2018-2019), Mandiri Sekuritas (2020-2022)
RESULTS SUMMARY FYE Dec (Rp bn) 2Q20 2Q19 YoY 1Q20 QoQ 6M20 6M19 YoY FY20F YTD % of cons Revenues
Construction 2.921 5.335 -45% 4.349 -33% 7.270 12.087 -40% 20.549 35% machinery Mining contracting 6.887 9.749 -29% 8.170 -16% 15.057 19.267 -22% 33.475 45%
Mining 2.712 3.163 -14% 3.366 -19% 6.078 6.794 -11% 10.146 60%
Contractors 271 741 -63% 475 -43% 746 1.543 -52% 5.412 14%
Gold 2.086 1.712 22% 1.953 7% 4.039 3.630 11% 6.929 58%
Total revenue 14.877 20.700 -28% 18.313 -19% 33.190 43.321 -23% 76.511 43% 46%
Cost of Revenue 11.875 15.759 -25% 14.056 -16% 25.931 32.681 -21% 59.831 43% 47%
Gross Profit 3.002 4.941 -39% 4.257 -29% 7.259 10.640 -32% 16.680 44% 43%
Operating expense 896 1093 -18% 1059 -15% 1.955 2.209 -11% 3.673 53% 47% Operating Income 2.106 3.848 -45% 3.198 -34% 5.304 8.431 -37% 13.008 41% 41% Pretax income 2.408 3.541 -32% 2.586 -7% 4.995 7.712 -35% 11.949 42% 44% Net Profit 2.238 2.522 -11% 1.823 23% 4.061 5.575 -27% 8.962 45% 51%
Gross margin 20% 24% 23% 22% 25% 22%
Operating margin 14% 19% 17% 16% 19% 17%
Net margin 15% 12% 10% 12% 13% 12%
Source: Company, Mandiri Sekuritas estimates
Ariyanto Kurniawan (+6221 5296 9682) [email protected] Wesley Louis Alianto (+6221 5296 9510) [email protected]
Please see important disclosure at the back of this report Page 29 of 35 Equity Research | 30 July 2020
Vale Indonesia: Anticipate Stronger Earnings in 3Q20 (INCO; Rp3,400; Buy; TP: Rp3,500)
INCO’s 1H20 net profit was largely in-line with forecast. We expect stronger earnings in 3Q20, mainly driven by higher price, while production cost will remain manageable thanks to low oil price.
1H20 net profit was largely in-line. Vale Indonesia (INCO) reported USD 24mn net profit in 2Q20 (vs. USD 6mn net loss in 2Q19), bringing 1H20 net profit to USD 52.9mn (vs. USD 26mn net loss in 1H19), accounting for 60%/85% of our/consensus forecasts. Despite the strong net profit number due to lower effective tax rate in 2Q of 15%, operating profit and EBITDA only accounted for 27% and 43% of our forecast, respectively. However, we believe INCO’s earnings are largely in-line with forecast, as we see stronger earnings in 2H20, mainly due to higher ASP. Note that LME spot nickel price stood at USD 13.6k/ton or USD 10.5k implied ASP for INCO or 13% higher than blended ASP in 1H20. 1H20 revenues increased to USD 360mn (+23% YoY), driven by higher sales volume at 18.9k tons (+11% YoY), while ASP declined to USD 9.3k/ton (-5% YoY). Total cost (COGS+opex) per ton decreased to USD 9.1k/ton (-13% YoY) due to higher production and lower fuel costs.
Key points to highlight in 2Q20: 1) nickel in matte production improved to 18.7k tons (+6% YoY/+6% QoQ), with 1H20 production of 36.3k tons, in-line with our FY20F target of 71k tons. 2) Total costs (COGS+opex) declined to USD 8.9k/ton (+11% YoY) as a result of higher production and lower fuel costs, in-line with lower Brent oil price. Fuel costs (oil and coal) represent around 22% of COGS. 3) ASP declined to USD 9.3k/ton (-11% YoY), but we expect higher ASP in 3Q20, based on nickel price in June-July of USD 13.1k/ton (USD 10.2k in INCO’s ASP).
Best proxy to the nickel sector. INCO offers the best leverage to nickel price due to its 100% exposure to nickel and its low cost structure. INCO is also in the process of finalizing two strategic projects with foreign partners with a total investment of USD 4.0bn to support its future growth.
FINANCIAL SUMMARY YE Dec (US$ Mn) 2018A 2019A 2020F 2021F 2022F EBITDA 221 221 251 294 290 Net Profit 61 57 88 133 127 Fully-diluted EPS 0.6 0.6 0.9 1.3 1.3 Fully-diluted EPS growth (%) n/m (5.1) 53.0 51.1 (4.1) P/E Ratio (x) 38.8 42.4 26.9 18.0 18.7 EV/EBITDA (x) 9.4 9.9 7.7 6.3 5.9 P/B Ratio (x) 1.2 1.3 1.2 1.1 1.0 Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0 ROAE (%) 3.3 3.0 4.4 6.3 5.7 Source: Company (2018-2019), Mandiri Sekuritas (2020-2022)
RESULTS SUMMARY % to in US$mn 2Q20 2Q19 %YoY 1Q20 %QoQ 6M20 6M19 %YoY FY20F % ours cons. Revenue 185,7 165,8 12% 174,7 6% 360,4 292,3 23% 677 53% 51% COGS (165,6) (165,3) 0% (154,2) 7% (319,8) (315,0) 2% (532) 60% 54% Gross profit 20,1 0,5 n.a 20,5 -2% 40,6 (22,8) n.a 145 28% 34% Operating profit 18,4 (4,1) n.a 18,9 -3% 37,2 (30,4) n.a 136 27% 35% EBITDA 58,9 20,7 n.a 49,5 19% 108,4 25,7 322% 251 43% 55% Earnings before tax 20,9 (8,5) n.a 23,0 -9% 44,0 (35,4) n.a 117 38% 54% Net profit 24,0 (6,2) n.a 29,0 -17% 52,9 (26,4) n.a 88 60% 85%
Gross margin 10,8% 0,3% 11,7% 11,3% -7,8% 21,4%
Operating margin 9,9% -2,5% 10,8% 10,3% -10,4% 20,1%
Net margin 12,9% -3,8% 16,6% 14,7% -9,0% 13,0%
Effective tax rate -14,6% 27,1% -25,7% -20,5% 25,5% 25,0%
Source: Company, Mandiri Sekuritas Estimates
Ariyanto Kurniawan (+6221 5296 9682) [email protected] Wesley Louis Alianto (+6221 5296 9510) [email protected]
Please see important disclosure at the back of this report Page 30 of 35 Equity Research | 30 July 2020
FROM THE PRESS
ICBP Announced New EGM Schedule & Additional Disclosures New EGM schedule on 3 Aug 2020 at 1400hrs Jakarta Time to ask for approval on Pinehill Corpora acquisition. Approval will be secured if 75% of the total issued shares approved the transaction (inclusive of INDF). Additional information was uploaded, giving more details on the assumption parameters used by the independent appraiser in valuing Pinehill Corpora as well as the impact of such acquisition to ICBP: − ICBP’s mgmt. projects that next 5Y consolidated revenues growth will increase from the base scenario of 8% p.a. to 10.6% p.a. after acquiring Pinehill that is expected to deliver a 20.4% p.a. annual revenue growth. − Incremental analysis also sees the acquisition could contribute positively to ICBP, which can increase its revenue and net profit by additional 10-30% p.a. although there are additional interest costs. Based on the increment, gross interest rate is about 1.4% for JPY and 2.7% for USD loans for 5Y tenor. (IDX)
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Indices and Fund Flows Currencies and Bonds Major Commodities
YTD Chg YTD YTD Indices Last Chg (%) Currency Last Chg (%) Last Chg (%) (%) Chg (%) Chg (%)
JCI 5,111.1 -0.0 -18.9 Rp/US$ 14,543 +0.06 -4.8 Crude Oil, WTI (US$/bl) 41.27 +0.6 -32.4 Dow Jones 26,539.6 +0.6 -7.0 US$/EUR 1.179 +0.65 -4.9 Copper (US$/mt) 6,482 -0.1 +5.4 Nikkei 22,397.1 -1.2 -5.3 YEN/US$ 104.92 -0.16 +3.5 Nickel (US$/mt) 13,829 +1.6 -0.9 Hang Seng 24,883.1 +0.5 -11.7 SGD/US$ 1.374 -0.38 -2.0 Gold (US$/oz) 1,971 +0.6 +29.9 STI 2,573.5 -0.4 -20.1 Tin 3-month (US$/mt) 17,930 -0.4 +4.4 Ishares indo 19.0 -0.2 -26.1 CPO futures (Ringgit/ton) 2,645 +1.6 -12.7 Coal (US$/ton) 51.8 +0.0 -23.5 Foreign YTD YTD Gov. Bond Chg Fund Flows Last Chg Last Chg Rubber forward (US¢/kg) 152.1 +1.9 -8.5 Chg Yield (bps) (US$mn) (bps) Soybean oil Equity Flow -29.8 -1,307 5Yr 5.98 -1 -46 29.67 +0.9 -14.0 (US$/100gallons) Bonds Flow +8.7 -7,056 10Yr 6.83 -1 -23 Baltic Dry Index 1,264.0 -2.0 +16.0
Please see important disclosure at the back of this report Page 32 of 35 Equity Research | 30 July 2020
Equity Valuation Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield Code Rating (Rp) Target PT (Rp Bn) 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 MANSEK universe 5,111 5,540 8.4 3,759,389 185,917 256,716 20.2 14.6 2.1 1.9 13.2 11.6 -26.4% 38.1% 3.3% 2.5% Banking 1,389,263 63,009 101,581 22.0 13.7 2.0 1.8 N.A. N.A. -34.4% 61.2% 3.2% 1.5% BBCA Neutral 30,675 26,500 (13.6) 756,292 22,167 29,781 34.1 25.4 4.3 3.8 N.A. N.A. -22.4% 34.3% 1.8% 1.2% BBNI Buy 4,590 5,900 28.5 85,597 7,073 15,323 12.1 5.6 0.8 0.7 N.A. N.A. -54.0% 116.6% 4.5% 2.1% BBRI Buy 3,120 3,000 (3.8) 384,691 20,229 35,699 19.0 10.8 2.0 1.7 N.A. N.A. -41.1% 76.5% 5.4% 1.6% BBTN Buy 1,285 1,350 5.1 13,608 1,236 1,554 11.0 8.8 0.8 0.7 N.A. N.A. 490.6% 25.7% 4.1% 2.1% BDMN Buy 2,740 4,000 46.0 26,262 2,703 4,752 9.7 5.5 0.6 0.5 N.A. N.A. -33.6% 75.8% 5.4% 3.6% BJBR Buy 965 860 (10.9) 9,494 1,260 1,438 7.5 6.6 0.9 0.8 N.A. N.A. -19.2% 14.1% 9.7% 9.8% BJTM Buy 555 590 6.3 8,326 1,146 1,434 7.3 5.8 0.9 0.8 N.A. N.A. -16.8% 25.2% 8.7% 8.7% BNGA Buy 780 840 7.7 19,603 2,340 4,211 8.4 4.7 0.5 0.5 N.A. N.A. -35.8% 80.0% 7.4% 4.8% BNLI Sell 1,265 430 (66.0) 35,474 909 1,494 39.0 23.7 1.5 1.4 N.A. N.A. -39.4% 64.4% 0.0% 0.0% PNBN Buy 805 1,100 36.6 19,391 1,976 3,508 9.8 5.5 0.5 0.4 N.A. N.A. -40.4% 77.5% 0.0% 0.0% BTPS Buy 3,430 3,200 (6.7) 26,424 1,189 1,547 22.2 17.1 4.2 3.5 N.A. N.A. -15.1% 30.1% 1.1% 0.9% BFIN Buy 274 475 73.4 4,100 781 841 5.3 4.9 0.6 0.6 N.A. N.A. 9.7% 7.7% 4.3% 5.7% Construction & materials 166,631 5,441 9,053 30.6 18.4 1.3 1.2 14.1 10.7 -56.7% 66.4% 2.0% 1.2% INTP Buy 12,400 14,500 16.9 45,647 1,673 2,003 27.3 22.8 1.9 1.8 12.3 10.7 -8.9% 19.8% 1.4% 1.3% SMGR Buy 9,475 11,020 16.3 56,201 2,520 2,825 22.3 19.9 1.7 1.6 9.2 8.6 5.4% 12.1% 2.2% 1.7% ADHI Buy 630 810 28.6 2,243 105 361 21.3 6.2 0.4 0.4 8.5 6.6 -84.2% 243.0% 5.9% 0.9% PTPP Buy 1,005 1,370 36.3 6,231 219 754 28.5 8.3 0.5 0.5 9.3 6.1 -76.5% 244.3% 4.5% 1.1% WIKA Buy 1,205 1,680 39.4 10,797 561 1,159 19.2 9.3 0.7 0.7 8.0 6.2 -75.4% 106.5% 1.0% 2.1% WSKT Buy 660 1,010 53.0 8,831 -579 -838 -15.3 -10.5 0.8 0.8 28.3 20.7 N/M -44.8% -1.3% -1.9% WTON Buy 284 500 76.1 2,475 285 438 8.7 5.7 0.7 0.6 4.0 2.8 -44.4% 53.7% 6.2% 3.5% WSBP Buy 199 242 21.6 5,246 391 530 13.4 9.9 0.7 0.6 8.1 6.9 -51.5% 35.7% 7.7% 3.7% JSMR Buy 3,990 5,900 47.9 28,959 266 1,822 108.8 15.9 1.6 1.4 23.2 12.3 -87.9% 584.6% 1.5% 0.2% Consumer staples 937,251 40,952 51,121 22.9 18.3 4.9 4.4 15.0 12.2 -15.5% 24.8% 3.7% 3.2% ICBP Buy 9,125 10,300 12.9 106,415 5,389 6,005 19.7 17.7 3.8 3.4 11.6 10.8 6.9% 11.4% 2.4% 2.5% INDF Buy 6,400 8,450 32.0 56,192 5,245 5,573 10.7 10.1 1.4 1.3 7.0 6.4 6.9% 6.3% 4.3% 4.6% MYOR Buy 2,350 2,650 12.8 52,544 2,861 2,745 18.4 19.1 4.5 3.9 13.0 11.6 43.9% -4.1% 1.4% 2.1% UNVR Buy 8,250 9,500 15.2 314,738 7,495 8,038 42.0 39.2 62.0 59.5 30.0 27.7 1.4% 7.2% 2.3% 2.4% GGRM Buy 49,650 63,450 27.8 95,531 7,422 10,321 12.9 9.3 1.8 1.6 8.4 6.6 -31.8% 39.1% 5.2% 5.2% HMSP Buy 1,725 2,400 39.1 200,649 8,342 13,384 24.1 15.0 6.6 5.6 18.6 11.1 -39.2% 60.4% 6.7% 4.1% KLBF Buy 1,525 1,650 8.2 71,485 2,764 2,985 25.9 23.9 4.1 3.8 17.6 16.1 10.2% 8.0% 1.9% 2.1% SIDO Buy 1,270 1,450 14.2 19,050 872 947 21.9 20.1 5.9 5.7 16.2 14.9 7.9% 8.6% 3.9% 4.3% MLBI Buy 9,800 14,650 49.5 20,649 563 1,124 36.7 18.4 25.7 15.1 18.6 12.0 -53.3% 99.7% 4.4% 2.7% Healthcare 50,656 1,042 1,271 48.6 39.9 3.8 3.5 16.7 14.1 3.5% 22.0% 0.1% 0.2% MIKA Buy 2,350 2,600 10.6 34,194 693 815 49.3 41.9 7.3 6.6 33.1 27.5 -5.1% 17.6% 0.0% 0.0% SILO Buy 4,550 7,150 57.1 7,394 44 100 166.6 73.9 1.2 1.1 6.0 4.7 107.0% 125.6% 0.0% 0.0% HEAL Buy 3,050 5,200 70.5 9,068 304 355 29.8 25.5 4.0 3.5 11.2 9.8 19.4% 16.7% 0.8% 0.9% Consumer discretionary 298,273 18,209 25,233 16.4 11.8 1.5 1.4 9.3 8.4 -39.6% 38.6% 4.2% 2.9% ACES Neutral 1,740 1,500 (13.8) 29,841 711 1,055 42.0 28.3 6.1 5.3 32.5 23.1 -31.0% 48.5% 1.7% 1.2% LPPF Buy 1,315 1,800 36.9 3,837 50 497 76.1 7.7 2.1 1.7 6.3 2.5 -96.3% 884.6% 0.0% 0.4% MAPA Buy 2,200 3,850 75.0 6,271 54 606 115.2 10.3 2.0 1.7 15.6 5.3 -92.1% 1013.2% 0.0% 0.3% MAPI Buy 700 1,000 42.9 11,620 -1,704 543 -6.8 21.4 2.8 2.4 -113.6 7.2 N/M N/M 1.8% 0.0% RALS Buy 565 700 23.9 4,009 -132 143 -30.4 28.1 1.1 1.1 -45.7 9.6 N/M N/M 9.5% -2.1% ERAA Buy 1,450 1,500 3.4 4,626 140 355 33.0 13.0 0.9 0.9 14.0 9.0 -52.5% 153.2% 0.6% 1.5% ASII Buy 5,075 5,000 (1.5) 205,454 14,710 17,216 14.0 11.9 1.3 1.3 8.9 9.1 -32.2% 17.0% 4.8% 3.2% SCMA Buy 1,280 1,800 40.6 18,851 1,566 1,693 12.0 11.1 3.2 2.9 8.4 8.0 35.7% 8.1% 5.8% 6.3% MNCN Buy 840 2,200 161.9 10,419 2,427 2,593 4.3 4.0 0.8 0.7 3.3 2.8 24.1% 6.8% 3.5% 3.7% MSIN Buy 274 650 137.2 1,425 267 316 5.3 4.5 0.9 0.9 3.1 3.0 16.3% 18.1% 9.4% 11.1% PZZA Buy 635 900 41.7 1,919 119 216 16.1 8.9 1.4 1.3 6.1 4.4 -40.3% 80.6% 5.2% 3.1% Commodities 252,285 21,594 23,317 11.7 10.8 1.1 1.0 4.5 4.0 -11.1% 8.0% 3.3% 3.4% UNTR Buy 21,500 22,500 4.7 80,198 8,962 9,195 8.9 8.7 1.2 1.1 4.0 3.5 -20.8% 2.6% 3.4% 3.4% ADRO* Neutral 1,085 1,350 24.4 34,705 372 353 6.5 6.9 0.6 0.6 2.8 2.6 -7.9% -5.2% 5.4% 5.0% HRUM* Neutral 1,180 1,300 10.1 3,029 17 14 12.2 15.7 0.7 0.7 0.1 -0.2 -5.9% -21.7% 4.5% 3.5% INDY* Neutral 1,015 910 (10.3) 5,288 2 6 224.3 58.5 0.4 0.4 1.7 1.4 N/M 286.9% 0.1% 0.4%
Please see important disclosure at the back of this report Page 33 of 35 Equity Research | 30 July 2020
Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield Code Rating (Rp) Target PT (Rp Bn) 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 ITMG* Neutral 7,900 10,450 32.3 8,663 100 101 6.0 6.0 0.7 0.7 1.8 1.6 -20.8% 0.9% 14.1% 14.1% PTBA Neutral 2,070 2,350 13.5 23,852 3,482 3,496 6.8 6.8 1.3 1.2 4.2 4.1 -18.3% 0.4% 10.9% 11.0% ANTM Buy 730 700 (4.2) 17,542 -22 197 -805.7 89.2 0.8 0.8 14.6 13.4 N/M N/M 0.0% 0.4% INCO* Buy 3,400 3,500 2.9 33,784 88 133 26.9 18.0 1.2 1.1 7.7 6.3 53.0% 51.1% 0.0% 0.0% TINS Neutral 780 670 (14.1) 5,809 -420 246 -13.8 23.6 1.1 1.1 40.3 9.9 31.3% N/M -2.5% 1.5% MDKA* Buy 1,800 2,200 22.2 39,416 92 111 30.0 24.9 4.7 4.0 11.4 9.6 26.4% 21.5% 0.0% 0.0% Property & Industrial Estate 86,952 7,211 9,744 12.1 8.9 0.7 0.6 8.6 8.0 -4.7% 35.1% 2.4% 1.9% ASRI Sell 126 80 (36.5) 2,476 150 938 16.5 2.6 0.2 0.2 6.7 5.2 -85.2% 524.8% 1.6% 1.6% BSDE Buy 715 1,160 62.2 15,138 1,399 2,050 10.8 7.4 0.5 0.5 9.4 8.8 -54.4% 46.5% 0.0% 0.6% CTRA Buy 655 1,120 71.0 12,157 832 1,094 14.6 11.1 0.8 0.7 9.9 8.5 -28.2% 31.5% 1.1% 1.1% JRPT Buy 412 670 62.6 5,665 997 1,065 5.7 5.3 0.7 0.6 5.0 4.4 -1.9% 6.7% 4.7% 0.1% PWON Buy 424 670 58.0 20,420 1,791 2,395 11.4 8.5 1.2 1.1 7.6 6.1 -34.1% 33.7% 1.4% 1.4% SMRA Buy 610 960 57.4 8,800 420 604 21.0 14.6 1.1 1.1 10.1 9.0 -18.5% 43.8% 0.8% 0.8% LPKR Neutral 139 200 43.9 9,812 74 391 132.9 25.1 0.3 0.3 10.6 10.7 N/M 429.7% 0.7% 0.7% DMAS Buy 234 390 66.7 11,278 1,441 1,086 7.8 10.4 1.6 1.6 7.3 10.0 81.9% -24.7% 10.2% 8.7% BEST Neutral 125 130 4.0 1,206 107 122 11.3 9.9 0.3 0.3 6.0 8.8 -72.0% 14.2% 2.8% 0.8% Telco 425,285 23,702 25,930 18.0 16.4 2.7 2.6 5.9 5.6 -5.2% 9.4% 4.2% 4.5% EXCL Buy 2,540 3,600 41.7 27,147 1,065 818 25.5 33.2 1.4 1.3 4.8 4.5 49.5% -23.2% 0.8% 1.2% TLKM Buy 3,000 3,800 26.7 297,187 19,403 21,026 15.3 14.1 2.9 2.8 5.5 5.2 4.0% 8.4% 5.2% 5.7% ISAT Buy 2,340 3,200 36.8 12,715 -1,046 -648 -12.2 -19.6 1.1 1.2 4.4 3.8 N/M 38.1% 0.0% 0.0% LINK Buy 1,900 5,500 189.5 5,391 736 744 7.6 7.6 1.1 1.0 3.3 3.3 -17.8% 1.1% 8.2% 6.9% TBIG Buy 1,300 1,400 7.7 28,120 1,068 1,264 26.3 22.2 5.1 4.6 11.9 11.2 30.4% 18.3% 2.1% 2.1% TOWR Buy 1,090 1,300 19.3 54,724 2,476 2,725 22.1 20.1 5.5 4.7 12.0 11.2 5.7% 10.1% 2.2% 2.2% Chemical 1,671 136 163 12.3 10.2 0.5 0.5 5.9 5.3 29.5% 20.3% 0.0% 0.0% AGII Buy 545 700 28.4 1,671 136 163 12.3 10.2 0.5 0.5 5.9 5.3 29.5% 20.3% 0.0% 0.0% Airlines 2,400 540 837 4.4 2.9 0.4 0.4 4.1 2.5 30.0% 55.0% 0.0% 0.0% GMFI* Neutral 85 275 223.2 2,400 38 59 4.4 2.9 0.4 0.4 4.1 2.5 26.1% 56.3% 0.0% 0.0% Transportation 2,815 -175 251 -16.1 11.2 0.5 0.5 12.0 4.7 -155.7% N/M -1.6% 2.2% BIRD Buy 1,125 1,700 51.1 2,815 -175 251 -16.1 11.2 0.5 0.5 12.0 4.7 N/M N/M -1.6% 2.2% Poultry 116,092 2,746 5,083 42.3 22.8 3.3 3.0 17.7 12.3 -50.5% 85.1% 1.8% 1.0% CPIN Buy 6,200 5,500 (11.3) 101,668 2,058 3,378 49.4 30.1 4.7 4.2 25.4 18.2 -43.4% 64.2% 1.5% 0.9% JPFA Buy 1,105 1,100 (0.5) 12,958 646 1,566 20.1 8.3 1.2 1.0 8.3 5.2 -63.4% 142.4% 4.0% 1.5% MAIN Buy 655 675 3.1 1,466 43 139 34.3 10.5 0.7 0.7 6.0 4.8 -72.0% 225.6% 0.9% 3.1% Oil and Gas 29,817 1,511 3,133 19.7 9.5 0.8 0.8 6.8 5.5 61.2% 107.4% 2.0% 4.2% PGAS* Buy 1,230 1,700 38.2 29,817 106 221 19.7 9.5 0.8 0.8 6.8 5.5 56.4% 109.1% 2.0% 4.2% Note: - *) net profit in USD mn - U/R means Under Review - n/a means Not Available - N/M means Not Meaningful - N.A means Not Applicable
Please see important disclosure at the back of this report Page 34 of 35 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia General: +62 21 526 3445, Fax : +62 21 527 5374 (Equity Sales)
RESEARCH
Adrian Joezer Head of Equity Research, Strategy, Consumer [email protected] +6221 5296 9415 Tjandra Lienandjaja Deputy Head of Equity Research, Banking [email protected] +6221 5296 9617 Ariyanto Kurniawan Automotive, Coal, Metal Mining, Chemical [email protected] +6221 5296 9682 Kresna Hutabarat Telecom, Media [email protected] +6221 5296 9542 Lakshmi Rowter Healthcare, Consumer, Retail [email protected] +6221 5296 9549 Robin Sutanto Property, Building Material [email protected] +6221 5296 9572 Edbert Surya Construction, Transportation [email protected] +6221 5296 9623 Silvony Gathrie Banking, Research Assistant [email protected] +6221 5296 9544 Riyanto Hartanto Poultry, Research Assistant [email protected] +6221 5296 9488 Henry Tedja Research Assistant [email protected] +6221 5296 9434 Wesley Louis Alianto Research Assistant [email protected] +6221 5296 9510 Leo Putera Rinaldy Chief Economist [email protected] +6221 5296 9406 Imanuel Reinaldo Economist [email protected] +6221 5296 9651
INSTITUTIONAL SALES
Silva Halim Managing Director [email protected] +6221 527 5375 Lokman Lie Head of Equity Capital Market [email protected] +6221 527 5375 Andrew Handaya Institutional Sales [email protected] +6221 527 5375 Feliciana Ramonda Institutional Sales [email protected] +6221 527 5375 Henry Pranoto Institutional Sales [email protected] +6221 527 5375 Kevin Giarto Institutional Sales [email protected] +6221 527 5375 Sharon Anastasia Tjahjadi Institutional Sales [email protected] +6221 527 5375 Talitha Medha Anindya Institutional Sales [email protected] +6221 527 5375 Angga Aditya Assaf Institutional Sales [email protected] +6221 527 5375 Ilona Carissa Institutional Sales [email protected] +6221 527 5375 Kusnadi Widjaja Equity Dealing [email protected] +6221 527 5375 Edwin Pradana Setiadi Equity Dealing [email protected] +6221 527 5375 Jane Theodoven Sukardi Equity Dealing [email protected] +6221 527 5375 Michael Taarea Equity Dealing [email protected] +6221 527 5375
RETAIL SALES
Andreas M. Gunawidjaja Head Retail Equities [email protected] 6221 5296 9693 Boy Triyono Jakarta [email protected] 6221 5296 5678 Iedprima Intan Maradi Online Jakarta [email protected] 6221 5296 9516 Ruwie Medan [email protected] 6261 8050 1825 Linawati Surabaya [email protected] 6231 535 7218 Maulidia Osviana Lampung [email protected] 62721 476 135 Aidil Idham Palembang [email protected] 62711 319 900 Dhanan Febrie Handita Bandung [email protected] 6222 426 5088 Yuri Ariadi Pontianak [email protected] 62561 582 293 Yogiswara Perdana Yogyakarta [email protected] 62274 560 596 Achmad Rasyid Bali [email protected] 62361 475 3066 www.most.co.id [email protected] 14032
INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower).
DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number 62-21-5263445 or fax 62-21-5275374.
ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be influenced by any part or all of his or her compensation.