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P H
Sep 12,2017 18:29:13

Plantation – Is The Current CPO Price Strength Sustainable?

Malaysian inventory levels are now at 1.94m tonnes, translating to an annualised stock/usage ratio of 10.3%. This is above the historical average of 9.5%, signalling that stock levels are officially in a surplus. With demand continuing to disappoint, with most of the main markets in negative territory YTD, we do not expect the current strength in CPO prices to persist. This would coincide with an anticipated softening of soybean prices once the initial impact of hurricanes in the US wear off and weather normalises. No change to our UNDERWEIGHT stance on the sector.

  • Malaysia’s CPO production rose 13.6% YoY in YTD-Aug, although August’s output was down by a slight 0.9% MoM from July. We believe production would pick up in the next couple of months, as most planters are expecting peak output to be in September/October. For the whole of 2017, we expect Malaysia’s CPO output growth to moderate to 10-12% YoY. 
     
  • Exports rose by 6.4% MoM in August, bringing YTD exports to a 2% increase YoY. In YTD-Aug, exports saw a rise to Pakistan (+14% YoY) and Philippines (+6%). This was offset by a decline in exports to China (-4% YoY) India (-29%) and the US (- 20.5%), while exports to the EU was flat YoY.
     
  • Inventory rose 8.8% MoM to 1.94m tonnes in August, despite a dip in output. Annualised stock/usage ratio for August is now at 10.3% (up from 9.5% in July), which is now above the 15-year historical average of 9.5%. This means that stock levels are now officially in a surplus situation. We expect to see a continuation of rising inventory levels, as production resumes its recovery during the peak seasonal period. 
     
  • 2Q17 results disappointed, as six companies (IOI Corp, Genting Plantations, TSH Resources, Kuala Lumpur Kepong, IJM Plantations and Felda Global Ventures) reported results that were below expectations. Two (Sime Darby and Sawarak Oil Palms) reported results above expectations, with only CB Industrial Product in line. We continue to see strong YoY FFB output growth in 2Q17, although most companies saw lower QoQ production growth. We observe Indonesia continuing to drive this growth, despite most companies guiding for growth to start moderating in 2H17. In Malaysia, while the growth recovery has not been consistent throughout the country, most companies are guiding for output to pick up more strongly in 2H17, with the peak output slated to be in September/October for Malaysia. Most companies continued to guide for strong double-digit FFB growth in 2017, coming from a low base in 2016. For those with downstream operations, we saw stronger QoQ margins, as feedstock prices fell. Most companies continue to guide for stronger margins at their downstream divisions, as selling prices have risen, while feedstock prices continue to weaken.
     
  • We maintain our UNDERWEIGHT rating on the sector, on the back of a strong output recovery and weak demand dynamics. Catalysts include a positive change to global demand and any extreme weather occurrences that would have an impact on global vegetable oil output. Our Top BUY is Sarawak Oil Palms while our Top SELL is London Sumatra. (Hoe Lee Leng)

$AALI $ANJT $BWPT $DSNG $GOLL $GZCO $LSIP $MAGP $PALM $SGRO $SIMP $SMAR $SSMS $TBLA $UNSP

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P H
Feb 21,2017 09:45:23

Bank Permata’s FY16 losses are likely to slow group earnings growth. However, higher earnings from Astra’s automotive, agribusiness and heavy equipment units should partially offset the lower income from its financial units. We reduce our FY16F earnings but keep our FY17F forecast, as we expect its financial services arm to recover this year. In 2017, Astra should also benefit from improved consumer spending, as well as higher CPO and coal prices. Our SOP-based TP drops to IDR9,100 (from IDR9,250, 15% upside) implies 19x/16x FY17/18F P/Es. BUY.

  • Unexpected FY16 losses from Bank Permata. PT Bank Permata Tbk (Bank Permata) ($BNLI) – which is 44.6%-owned by Astra – surprisingly recorded a net loss of IDR6.5trn for FY16. This was driven by substantial new provision allocations for non-performing loans (NPL), which significantly increased in 4Q16. In 4Q16, the bank allocated IDR4.3trn in new provisions for allowances for impairment losses, which pressured FY16 earnings.
     
  • The increase in NPL was driven by loans to the manufacturing, agribusiness, wholesale & retail trading, as well as mining sectors. This year, we expect Bank Permata’s NPL to improve – especially for loans given to the agribusiness and mining sectors. These sectors are benefiting from the current increase in commodity prices, such as CPO, rubber and coal prices.
     
  • Lower FY16F earnings. Astra’s financial services unit – comprising PT Federal International Finance, PT Toyota Astra Financial Services, PT Astra Sedaya Finance, PT Surya Artha Nusantara Finance and Bank Permata – accounted for 18% of Astra’s 9M16 consolidated earnings. In our calculation, Astra’s financial unit is likely to book a net loss of IDR1.3trn in 4Q16 (from earnings of IDR750bn in 3Q16). Hence, we cut Astra’s FY16F consolidated earnings estimates by 19% to IDR14trn.
     
  • Tailwinds ahead. We see strong tailwinds for Astra’s mining, agribusiness and auto arms ahead, driven by:
    i. Higher coal prices and slower growth of labour costs for its plantation unit, which may lift earnings;
    ii. Its auto business is likely to maintain strong sales growth, boosted by lower financing costs;
    iii. Hidden value in its property arm (just launched in Oct 2016) which may be unlocked once its assets start to be monetised.

    In addition, in 2017, Bank Permata is likely to book lower new provisions for NPL. The bank’s allowances for its impairment losses coverage ratio increased to 75% at end-Dec 2016 (from 51% at end-Mar 2016).
     
  • Maintain BUY with a lower SOP-based TP of IDR9,100 (from IDR9,250, 15% upside) that also implies 19x/16x FY17F/FY18F P/Es respectively. While rising NPLs at Bank Permata are a key risk to our call, our sensitivity analysis indicates its impact on Astra’s value should not be significant. (Andrey Wijaya)

$ASII $AALI $UNTR

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P H
Jan 11,2017 10:49:56

Regional Plantation: Volatility Is The Name Of The Game

We expect yet another volatile year for CPO prices – similar to last year – due to the recovery in CPO output which we anticipate to start coming through after 1Q17. This should result in a moderation of prices. Demand remains unexciting, given China’s predilection for soybean which remains in abundance, while India has yet to get over its currency issues. We maintain our NEUTRAL sector call. We favour selected big-cap counters like KLK, Sime Darby, Golden Agri and London Sumatra – being high-beta stocks which would fare well in a volatile environment.


$AALI $LSIP $SGRO

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P H
Nov 29,2016 09:50:16

Plantation: Overpowered by the Bull Factor

We expect favorable CPO fundamental and better soybean prospect to outweigh the impact of weaker Indian palm oil import as a result of India’s demonetization policy. We believe Indian palm oil import should normalize by Jan-17 once the issues have been settled. Maintain overweight with LSIP as our top pick.

Favorable CPO fundamental still prevails. In our previous report, The Time is Ripe!, we highlighted that CPO fundamental will remain strong because of 1) pressure on emerging market currencies, such as IDR and MYR, since 8 Nov post the US presidential election, 2) expectation of subdued output till 1Q17 and 3) slower minimum wage hike set by the government at 8.25% for FY17. Note in previous years, this ranges between 13-19% since FY12. According to the latest estimates by MPOB, Malaysia's palm oil production guided a 3.5% MoM decline in the first 20 days of Nov. This follows a 2.2% MoM decline in Oct-16. Given this, and higher Dec demand in anticipation of Chinese New Year, we expect CPO price to trade within the range of MYR2,800-3,000/ton until year-end.

US proposal for higher biofuel quotas in FY17 an added boost for CPO price. On 23 Nov-16, the US Environmental Protection Agency (EPA) has set higher biofuel quotas at 19.28bn gallons or 72.98bn liters (+6.5% YoY) to be blended into gasoline and diesel for FY17, which is higher than the initial 18.8 billion gallons (71.1bn liters) proposed in May. The revised quota also includes 280mn gallons (1.1bn liters) of increase in advanced biofuel quota, which may boost demand for soya oil-based biodiesel by 700-800mn lbs (0.3-0.4mn tons), according to a Bloomberg article. Increased demand for soy-related products will boost soy products' prices, hence positive for CPO price.

India’s high-denomination banknotes ban poses short-term hiccup for palm oil demand. On 8 Nov-16, India announced immediate ban on the use of 500 Rupee (USD7.50) and 1,000 Rupee (USD15.00) banknotes, which account for 86% of total cash in circulation, in an effort to combat corruption and counterfeit money in the country. Citizens will have until 30 Dec-16 to exchange their old notes for the new ones. We think the ban of high-denomination notes will affect India palm oil import negatively in the short-term, given that India is the largest importer of palm oil, accounting for 19% of total Malaysian palm oil export (10M16) and 22% of total Indonesia palm oil export (8M16). Due to slow distribution of the new notes, cash crunch in India will temporarily disrupt retail demand, including purchases of necessities, as well as delayed shipment of vegetable oils to India. As a result, we could see weaker Indian palm oil import translating into Malaysia’s Nov and Dec CPO export figures, before normalizing in Jan-17. According to Intertek Testing Services, Indian palm oil import fell 75% MoM to 58,360 tons in the first 20 days of Nov.

Maintain overweight. Overall, we expect favorable CPO fundamental and better soybean price prospect to negate the negative impact of weaker Indian palm oil import. Moreover, we believe Indian palm oil import should normalize by Jan- 17 once the issues have been settled. Maintain overweight on the plantation sector with LSIP as our preferred pick.

$AALI $LSIP $SGRO $SMAR

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P H
Nov 29,2016 09:48:19

The Time is Ripe!

We may see pressure of weakening IDR due to rising uncertainty and Fed Fund Rate hike to positively affect CPO players’ earnings. This is further backed by slower wage hike in FY17 and supportive sector fundamental. We prefer LSIP for its cheap valuation and strong financial position.

CPO players as beneficiary of IDR depreciation… On higher chance of Fed Fund Rate hike in Dec and uncertainty of Trump policies, we may see market and pressure on IDR to persist. Given that the Indonesian CPO price is quoted in USD (CIF Rotterdam), we believe listed local CPO players’ earnings should benefit from IDR depreciation against USD. Based on our sensitivity analysis, for every 1% depreciation in IDR, both AALI's and LSIP's net profit would increase by 2.1% and 3.1% respectively. Benefit of IDR depreciation to AALI’s earnings is less profound as it was partially offset by higher forex arising from its outstanding USD-denominated loan.

… And slower wage hike. In addition, the Indonesian government has set minimum wage hike of 8.25% for FY17, which is a slower rate as compared to previous years’ increment of more than 10%. We think CPO players will benefit from slower wage hike as labor cost accounts for 20-30% of CPO players’ production cost.

Fundamental remains supportive of CPO price. We also think high CPO price within MYR2,800-3,000/ton should sustain in view of continued low inventory level for the next several months. The recently reported lower MoM Malaysia CPO output in Oct, we believe, may signal subdued production for the rest of FY16 and into 1Q17, the start of low crop season, hence capping further rise in CPO inventory level. Upcoming Chinese New Year demand and ongoing concerns on delayed soybean planting due heavy rainfall in Argentina and parts of Brazil continue to be a positive factor supporting CPO price.

AALI's and LSIP's performances lag behind the CPO price. Compared to the year-to-date 32% rise in CPO price, share prices of both AALI and LSIP underperformed by 22% and 4% respectively. We think share prices have been penalized as a result of deep production decline which negatively impacted earnings. On the other hand, AALI and LSIP are still reasonably valued at 14.9x and 14.2x FY17 P/E respectively (vs. peers' average of 14.3x). In summary, undemanding valuation coupled with better production and CPO price outlook ahead should present plenty of upsides for the stocks.

Who’s our preferred pick? Despite liking both AALI and LSIP for their stock price sensitivity to CPO price and good liquidity, we prefer to play LSIP to take advantage of
the CPO price momentum and potential weakening of the IDR. Aside from its cheaper valuation as compared to AALI, we like LSIP for its strong and debt-free balance sheet, which provides buffer to foreign exchange risk and rising interest rates. We currently have a buy recommendation on LSIP with TP of Rp1,950 based on 17.0x 3-year average rolling forward mean P/E. Our TP offers 19% upside from current share price.

$AALI $LSIP

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P H
Nov 28,2016 12:08:07

Indonesia Plantations Update: Indonesian Palm Oil Conference notes
 
Plantations: Indonesia

More attendees; Price rebound on volume drop post El Nino: With CPO prices on the rebound, the 12th Indonesian Palm Oil Conference (IPOC) 2016 on 23-25th November 2016 at the Westin Resort Nusa Dua (exhibit 10) with the theme of “Palm Oil Development: Harmonizing Market, Society and the State”, saw around 1,300 delegates, up from the 2015 level of 1,100. Organized by the Indonesian Palm Oil Association (GAPKI), the conference was opened by the chairman of GAPKI, Joko Supriyono, who spoke about the CPO price level which has climbed from its 6-year low at USD630/ton in 2015 to USD660/ton as of October 2016. He pointed out that the price recovery was due to a production drop post El Nino leading to palm oil stocks being at their lowest level of 1.8mn tons in 1H16, down 59% from 4.5mn tons in December 2015. In addition, he stated that Indonesia’s palm oil production in 2016 may only reach 30.9mn tons, -10% y-y. This should drag 2016 exports down by 15% y-y to 22.5mn tons.

5mn cultivating rights certificates to deal with spatial planning: Separately, at the conference, the Minister of Agrarian and Spatial Planning, Sofyan A. Djalil, cited that one of the major problems faced by the palm industry is on agrarian and spatial planning. To address the problem, the minister has issued a policy to accelerate the issue time for cultivating rights certificates (HGUs) to only 90 days. The government will also undertake a pilot project to certify 1,000 plots of smallholders' land, plasma and public land with a total area of 25,000 ha. The government targets to issue 5mn cultivating rights certificates in 2017.     

6 government programs to support industry development: At the conference, the Minister of Agriculture, Amran Sulaiman, stated that there are 6 programs defined by the Government in order to further develop the Indonesian palm oil industry and increase its sustainability:
1.     Improving the productivity of smallholders’ plantations and increasing funding support for Indonesia Estate Crop Fund for Palm Oil (BPDP) to support smallholders’ replanting, as currently smallholders account for more than 40% of total oil palm plantation areas in Indonesia.
2.     Accelerating and encouraging all Indonesian palm oil producers to obtain the Indonesia Sustainable Palm Oil (ISPO) certification for their products in order to be accepted internationally.
3.     Increasing utilization of peatlands for oil palm plantations to further intensify palm oil productivity and also to prevent forest fires.
4.     Converting the legal status of smallholder plantations from plantation business permits (IUPs) to cultivation rights (HGU) to provide legal certainty and help smallholders obtain bank loans, which should support productivity. The cultivation rights will also enable smallholders to obtain replanting programs from BPDP.
5.     Focusing exports on major CPO markets, such as India, China, Pakistan and Bangladesh, but reducing exports to Europe due to the adverse publicity on CPO products from Indonesia.
 

$LSIP $SMAR $SGRO $AALI

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P H
Nov 14,2016 12:36:25

Regional Plantation: Disappointing Output Supports Bullish CPO Price Signal

Malaysia’s CPO production unexpectedly fell MoM in October, which combined with a small reduction in exports, resulted in a minimal rise in inventory. This indicates that production should taper off from hereon, having peaked in September, providing a short-term bullish signal for CPO prices. We now expect prices to remain strong until 1Q17, when signs of a production recovery take place. No change to our NEUTRAL sector call, with Top Picks KLK, Sime Darby, Golden Agri and London Sumatra.
¨ Malaysia’s CPO production fell 2.2% MoM in October, while YTD production decline widened to 15.6% YoY. This was an unexpected decline, which could indicate that the peak production period is over in Malaysia, having peaked in September. We understand that production in Indonesia could still be on the rise in Oct/Nov, as El Nino hit Malaysia first before affecting Indonesia.

¨ Exports fell in October (-1.4% MoM), as China continued to utilise its rapeseed oil and soybean stocks. Exports to China saw a MoM decline of 5.2% in October, while exports to India and the US fell by22.2% and 10.1% respectively.

¨ Malaysia’s YTD-Sep exports dropped 7.3% YoY, with wider declinestoChina (-29%), India (-15.4%), US (-13%) and the EU (-12%). We expect demand from India to improve in the coming months,due to the change in import taxes, while China should see some festive demand prior to Chinese New Year.

¨ Inventory rose 1.8% MoM to 1.57m tonnes in Octoberdue to lower exports, bringing the stock/usage ratio to 8.4% (Sep: 8.3%), below the 12-year average of 10%. With a likely slowdown in production and higher exports, inventory should remain rangebound over the next few months, ranging 1.5-1.8m tonnes.

¨ Recent developments:

i. South American soybean planting partially delayed due towet weather in Argentina and Brazil.Planting is at 6-8% of the intended area currently, vs the 12-16% average. If this continues, it would help reduce high soybean stocks caused by four years of bumper crops in the US;

ii. China’spalm oil imports remain weak, down 38.4% YoY in YTD-Sep, due to high stockpiles–6.2m tonnes of soybean, 3.5m tonnes of rapeseed oil. We understand China plans to release 0.1m tonnes of rapeseed oil into the market per month, which would continue to dampen demand.

iii. India’spalm oil imports fell 10.3% YoY in YTD-Sep. However, this should improve due to the recent cut in import taxes favouring palm oil. We expect palm oil’s market share to rise from the current 56%, while there should also be some switching back to buying crude vs refined oils.

¨ Still NEUTRAL. Given the unexpected reversal of output in October, we now believe Malaysian output is likely to disappoint for the rest of 2016 and 1Q17, as it plateaus off from the seasonal peak. This would result in CPO prices remaining at stable levels of MYR2,600-2,900/tonne for the next few months. After 1Q17 however, production is expected to recover more significantly, thereby lowering CPO prices. We keep our MYR2,500/tonne CPO price assumption for 2016-2017. Our regional Top Picks remain Kuala Lumpur Kepong, Golden Agri and London Sumatra.We also like Sime Darby as a restructuring play. (Hoe Lee Leng, Hariyanto Wijaya, CFA, CFP, CA, CPA)

$AALI $LSIP $SGRO $SMAR

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P H
Aug 29,2016 22:08:55
Indonesia Equities: Pricing In Near Term Positives

Key Points

- +9% gains in MSCI Indonesia since our country upgrade in July - Since our upgrade of Indonesian equities to overweight two months ago in the MIG publication after clarity on its tax amnesty programme emerged, sentiment has further improved following the appointment of well respected Finance Minister Sri Mulyani Indrawati. The Indonesian equity market has seen strong equity inflows in 3Q16 lifting the index up ~9% (local currency terms, +8.2% in USD), which has outpaced world equities’ gains (+5.2%) for the same period and supported our call.

- Year to date’s gains of +18.6% has also more than recouped 2015’s losses of -12%, which has supported the turnaround highlighted in our January 2016’s South East Asia Equity Strategy report. The equity market rally year to date has been supported by a benign environment of lower interest rates, stable IDR currency vs the USD, under-owned positions in global portfolios and improving confidence in Indonesia’s recovery story. Estimated equity inflows into Indonesia so far for 3Q has exceeded the total inflows for 1H16, driving the market to new highs. Since mid May this year, it is estimated that net equity inflows reached $1.7bln, vs $1.6bln net outflows over the whole of 2015 (source: JPM estimates).


- Near term positives post amnesty and cabinet reshuffle look priced in, valuations are now close to 10 year high – At 16x PER, Indonesian equities is now trading close to +2 standard deviations to its 10 year historical average multiple and at its highest valuation level since 2007, which we believe has priced in much of the near term positives. Although near term liquidity is likely to remain supportive given benign expectations on interest rates, we caution that valuations have caught up and believe it is prudent to start taking some money off the table. On domestic updates, while the recently released 2017 budget is credible, it is unlikely to lead to further corporate earnings upgrades given a moderate government spending target of 6% (planned fiscal deficit for 2017 is 2.4% of GDP, flat/lower than 2016E). Towards the end of September and December which marks the first and second phases of the tax amnesty programme’s staggered tax rates for declared wealth, investor sentiment may also be influenced by expectations over the tax collections.


- Muted start to the 9-month tax amnesty programme, although still early days - As of 23rd August 2016, the asset declaration in the Tax Amnesty Program has reached Rp51.7tn, consisting of 85% onshore/15% offshore assets (12% overseas assets declared, 3% overseas net assets repatriated), while asset repatriation has reached Rp1.6 tn. Momentum of onshore assets declared in first half of August has picked up, with the tax office reporting about Rp11.5tn worth of onshore assets declared (>4x July’s). About three-quarters of the assets declared were from private individuals, and the balance private entities, which we view as supportive of property sector’s recovery given interest rates are expected to remain low while the Ministry of Finance has allowed repatriated funds to be invested in real assets (such as property and gold).


- Looking ahead, earnings upgrades need to pick up momentum for the rally to have more legs - Earnings wise, the recent 2Q results season was mixed with single digit corporate top line growth from a year ago. Concerns on banks remain dragged by asset quality issues while commodity related earnings have been moderate. Following the latest 2Q earnings season (where consensus earnings were trimmed -2% lower for FY16E and FY17E), FY16E and FY17E earnings are now forecast to grow +7% and +14% respectively (higher than Asia ex Japan equities’ 2.2% FY16E and 11% for FY17E respectively) which we believe is priced in current valuations.

Time to lock in some profits – Switch out of names which have rallied and offer no upside to target prices
- Sectors we are cautious on are: Commodity related plays which have rallied and priced in recovery expectations (coal – Bukit Asam, ITMG, palm oil – Astra Agro, London Sumatra), Banks (loans growth will be moderate while we expect asset quality concerns to remain a near term overhang) and Utilities (in particular, Perusahaan Gas – where we think profitability will remain pressured by regulatory efforts to lower gas prices).

Preferred Picks/Switch Ideas

- Preferred Sectors we would accumulate new positions are: Property (Bumi Serpong – Western Jakarta play, large landbank catering to middle income buyers), Telecommunications (Telekomunikasi Indonesia – improving smartphone penetration and data usage supported by a young population), Consumer (Indofood and Media Nusantara, which benefit from an improving domestic economy in 2H16) and Infrastructure (Jasa Marga – No. 1 toll road operator, long term beneficiary of infrastructure development in Indonesia).


- Risks to the current rally include weaker than expected global economy, faster than expected Federal Reserve interest rate hikes which may result in global liquidity volatility and disappointments in the domestic recovery and infrastructure spending pace (continues to be a focus in the 2017 budget, with 9% yoy expected growth).


$PTBA $KKGI $HRUM $ITMG $AALI $LSIP $SGRO $SMAR $PGAS $BBCA $BBRI $BMRI $BBNI $BSDE $ASRI $LPCK $LPKR $CTRA $TLKM $INDF $ICBP $AISA $MNCN $JSMR

Bull
P H
Jul 27,2016 08:50:23
EARNINGS CALENDAR (Half Year 2016 - Estimated)

JULY 2016

Jul 25, 2016 :
$BBTN (Bank Tabungan Negara (Persero) Tbk PT)

Jul 26, 2016
$BDMN (Bank Danamon Indonesia Tbk PT)
$BMRI (Persero) Tbk PT Earnings Release - 4:00PM GMT+7

Jul 27, 2016
$AALI (Astra Agro Lestari Tbk PT)
$HMSP (Hanjaya Mandala Sampoerna Tbk PT)
$LPPF (Matahari Department Store Tbk PT)
$MPPA (Matahari Putra Prima Tbk PT)
$PTBA (Bukit Asam (Persero) Tbk PT)

Jul 28, 2016
$ASII (Astra International Tbk PT)
$BEST (Bekasi Fajar Industrial Estate Tbk PT)
$BJBR (PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk)
$DOID (Bloomberg)
$NCO (Vale Indonesia Tbk PT)
$JPFA (Bloomberg)
$PSAB (Bloomberg)
$SSMS (Bloomberg)
$SMGR (Semen Indonesia (Persero) Tbk PT)
$UNTR (United Tractors Tbk PT)
$UNVR (Unilever Indonesia Tbk PT)

Jul 29, 2016
$ASRI (Alam Sutera Realty Tbk PT)
$ADHI (Bloomberg)
$BSDE (Bumi Serpong Damai Tbk PT)
$BNGA (Bloomberg)
$BNLI (Bloomberg)
$BNII (Bloomberg)
$BKSL (Bloomberg)
$BHIT (Bloomberg)
$BISI (Bloomberg)
$CPIN (Bloomberg)
$CTRA (Ciputra Development Tbk PT)
$CTRP (Bloomberg)
$ELSA (Bloomberg)
$GIAA (Bloomberg)
$GJTL (Bloomberg)
$GGRM (Gudang Garam Tbk PT)
$NKP (Bloomberg)
$INTP (Indocement Tunggal Prakarsa Tbk PT)
$INDF (Indofood Sukses Makmur Tbk PT)
$ICBP (Indofood CBP Sukses Makmur Tbk PT)
$INDY (Bloomberg)
$KARW (Bloomberg)
$KAEF (Bloomberg)
$KIJA (Bloomberg)
$KLBF (Kalbe Farma Tbk PT)
$KRAS (Bloomberg)
$LPKR (Lippo Karawaci Tbk PT)
$LSIP (Perusahaan Perkebunan London Sumatra Indonesia Tbk PT)
$MAPI (Bloomberg)
$PWON (Bloomberg)
$PNBN, $PNLF, $PNIN (Bloomberg)
$PTPP (Bloomberg)
$RALS (Bloomberg)
$SMRA (Bloomberg)
$TBLA (Bloomberg)
$TLKM (Telekomunikasi Indonesia (Persero) Tbk PT)
$TOTL (Bloomberg)
$WSKT (Bloomberg)

AUGUST 2016
Aug 1, 2016
$HRUM (Harum Energy Tbk PT)
$SSIA (Surya Semesta Internusa Tbk PT)

Aug 10, 2016
$ITMG (Indo Tambangraya Megah Tbk PT)

Aug 12, 2016
$EXCL (XL Axiata Tbk PT)

Aug 29, 2016
$ADRO (Adaro Energy Tbk PT)
$ANTM (Aneka Tambang (Persero) Tbk PT)
$BBRI (Bank Rakyat Indonesia (Persero) Tbk PT)
$ISAT (Indosat Tbk PT)
$PGAS (Perusahaan Gas Negara (Persero) Tbk PT)

SEPTEMBER

Sep 13, 2016
$SMCB (Holcim Indonesia)

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P H
Jun 20,2016 23:56:51
Sawit, Sumber Energi Terbarukan Harapan Dunia: CPO akan menjadi bahan baku utama untuk bahan bakar nabati di masa mendatang, dan Indonesia akan menjadi produsen yang paling penting. Setidaknya tidak ada negara yang mampu mengejar produksinya. (SAWIT INDONESIA)

$AALI $LSIP $SMAR $SGRO
Bull
P H
Jun 07,2016 12:26:34
BERITA SAHAM 07 JUNI 2016


•PERTUMBUHAN EKONOMI : Pemerintah memberi sinyal penurunan asumsi laju produk domestik bruto dari usulan RAPBNP 2016 sebesar 5,3% menjadi 5,1%-5,2%. (BISNIS INDONESIA)

•REGULASI IMPOR PONSEL & KOMPUTER : Per 1 Juli, Importir Produsen Wajib Investasi
Mulai 1 Juli 2016, impor telepon seluler, komputer genggam (handheld), dan komputer tablet khususnya untuk perangkat yang berada dalam jaringan 4G LTE oleh importir produsen wajib menyertakan bukti investasi di dalam negeri. (BISNIS INDONESIA)

•INDUSTRI PAKAN TERNAK : Jagung Ditekan, Impor Gandum Melonjak, Pengetatan impor jagung berimbas pada meningkatnya impor gandum untuk pakan ternak. Penurunan impor jagung juga telah menyebabkan penyerapan komoditas itu dari petani lokal naik cukup signifikan. (BISNIS INDONESIA) Comment : good for BISI

•TAMBAHAN MODAL BUMN : PMN Cair, Rencana penerbitan saham baru oleh BUMN kembali mencuat setelah pemerintah mengusulkan Penyertaan Modal Negara (PMN) dalam Rancangan APBN Perubahan 2016 kepada DPR. (BISNIS INDONESIA)

•WTON : Perusahaan beton pracetak PT Wijaya Karya Beton Tbk. sudah mengantongi proyek infrastruktur HSR Jakarta-Bandung dan menggenggam total nilai kontrak baru hingga Rp1,3 triliun. (BISNIS INDONESIA)

•RI MASUK LIMA BESAR DUNIA - Ledakan Besar di Ritel : Lompatan peringkat Indonesia, dari 12 menjadi 5, dalam Global Retail Development Index (GRDI) 2016 kian mengonfirmasi terjadinya booming sektor ritel di Tanah Air. (BISNIS INDONESIA) Comment : Good For ACES, RANC

•STOK CPO MENURUN : Ramadan Kerek Harga CPO, Persediaan minyak kelapa sawit di Malaysia, sebagai produsen kedua terbesar di dunia, diprediksi menyusut ke level terendah dalam dua tahun terakhir. Harga pun berpeluang mencapai level 2.900 ringgit per ton pada bulan ini. (BISNIS INDONESIA) Good For LSIP, AALI

•TLKM : PT Telekomunikasi Indonesia Tbk mengaku sudah meraih pendapatan sekitar Rp 15 triliun dari segmen High End Market yang dikelola Enterprise Customer Facing Unit (CFU). (INDO TELKO)

•BBRI- BMRI : Bank BRI (Persero) Tbk dan Bank Mandiri (Persero) Tbk berkomitmen membiayai permodalan bagi distributor minyak pelumas buatan PT Pertamina Lubricants. (KOMPAS)

•BMRI : Bank Mandiri’s e-money solution provider PT Digital Artha Media (DAM) will sign partnership agreements with 13 e-commerce companies while Indonesian Agency for Creative Economy (BEKRAF) has joined hands with several venture capital firms to fund the 16 sub-sectors in the creative industry. (DEAL STREET ASIA)

•Harga Nickel Dan Timah
Tin 3M : 16945  +350  +2.11%
Nickel 3M : 8665  +165  +1.94%

$ERAA $TELE $TRIO $GLOB $BISI $CPIN $MAIN $JPFA $WTON $WIKA $ACES $RANC $AALI $LSIP $SIMP $SMAR $SGRO $TLKM $BMRI $BBRI

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( OCBC, DISCLAIMER ON)
Bull
P H
Jun 04,2016 18:41:54
Astra Agro Lestari ($AALI), Overhang From Rights Issue Should Disappear

Astra Agro just announced the exercise price and the number of new shares for its rights issue, which we think should eliminate the overhang in its share price. It would do rights issue with the ratio of nine old: two new shares with an exercise price of IDR11,425, which would dilute its FY16F and FY17F EPS by 9% and 16% respectively. Cum-rights date is 6 Jun 2016. We reiterate our BUY call with a lower IDR17,800 TP on Astra Agro, which we view as a laggard play. Our revised TP is based on an unchanged 16.4x P/E target on diluted FY16F EPS.

$AALI $ASII

Bear
P H
May 16,2016 10:48:05
Astra Agro Lestari: Strong fundamental is intact
 
- There might be short-term share price correction. Astra Agro Lestari (AALI, BUY, TP:IDR19,500) would be deleted from MSCI Indonesia Index since 1 June 2016. As of 29 April 2016, Astra Agro Lestari’s foreign ownership is 174.5mn shares (equivalent to 11.1% of total outstanding shares). Therefore, we think there might be short-term share price correction due to selling pressure from foreign fund managers, who benchmark their fund performance to MSCI Indonesia Index.

- Exercise price of Astra Agro Lestari would be announced at end of May. We estimate the discount of its exercise price to current share price is around 15% (exercise price > IDR12,000).

- Strong fundamental is intact. Astra Agro is a laggard play. Astra Agro Lestari’s share price performance YTD is -6.3% (vs JCI: +3.7% vs Jakagri: +1.4%), which we attribute its bad share price performance to: 1) overhang until rights issue is done. 2) deletion from MSCI Indonesia Index. We think Astra Agro’s strong fundamental is still intact such as good corporate governance. Therefore, we think it’s good opportunity to accumulate the counter after deep correction.

$AALI

Bear
P H
May 16,2016 09:07:35
MSCI INDONESIA SMALL CAP INDEX
Additions: Garuda Indonesia (GIAA)

Deletions: Bekasi Fajar Industrial Estate (BEST) & Tiphone Mobile Indonesia (TELE)

MSCI INDONESIA STANDARD INDEX
Additions: Waskita Karya Persero (WSKT)
Deletions: Astra Agro Lestari (AALI)

$GIAA $BEST $TELE $WSKT $AALI


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P H
May 09,2016 17:37:09
Astra Agro Lestari: A Laggard Play

We think that this is now an opportune time to BUY (upgrading from Neutral). During our Hong Kong marketing rounds, we were frequently asked about the timing to accumulate Astra Agro’s stock. Our TP rises to IDR19,500 TP (from IDR14,850, 21% upside), as we think Astra Agro is a laggard play in the plantation sector. We think it should outperform when the completion of its rights issue eliminates the overhang. Its 1Q16 performance was in line with our/consensus expectations.

¨ Now is the right time to accumulate Astra Agro. During our marketing visit to Hong Kong in April, we were frequently asked about the timing to accumulate Astra Agro Lestari (Astra Agro). Its share price has been lagging (+1.6% YTD vs Jakarta Agri Index: +5.2% YTD and JCI: +5.4% YTD), which we attribute to an overhang arising from its rights issue. We think that it is now a good time to accumulate the counter, as it has disclosed details of its rights issue. For conservative investors, we suggest accumulating shares after the exercise price of its rights issue is announced, ie late May 2016.

¨ Upgrade to BUY with higher IDR19,500 TP. As we think Astra Agro is a laggard plantation sector play, we upgrade our call, with new TP based on a higher target P/E of 16.4x FY16F EPS (its 10-year mean P/E, and from 12.5x). This implies EV/ha of USD12,500, which is within the range of Indonesia-listed planters of USD8,100-26,000. We maintain our assumptions and have not factored the dilution impact of the rights issue into our forecasts. The key risk to our BUY call would be weakening CPO prices.

¨ A 15% discount rate in our rights issue analysis. To get the exercise price in Indonesian rights issues, the average discount to market share price is around 16%. We assume Astra Agro would use a 15% discount for its current rights issue (Figure 4).

¨ In this scenario, its exercise price would be IDR13,685 and its theoretical ex-rights price (TERP) would be IDR15,722, while EPS should be diluted by 7.1% for FY16F and 13.3% for FY17F.

¨ Full-year earnings should be strong. We expect the company to book strong earnings for the current quarter, due to a spike in domestic CPO prices since end-March (average 1Q16 CPO price: IDR6,593/kg vs average price in April: IDR8,630/kg). For every IDR100/kg increase in the domestic CPO price, we expect earnings to increase by 3.9%.

¨ Meanwhile, 1Q16 results were in line. Astra Agro booked core earnings of IDR234bn (+22.1% QoQ, -31.5% YoY), in line with expectations and at 13%/14% of our/consensus full-year estimates respectively. Historically, first-quarter earnings represent 13-31% of full-year earnings (Figure 2).

$AALI $ASII

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P H
May 07,2016 13:15:28
Astra International: Negative News Likely Priced In
 
Upgrade Astra to BUY (from Neutral) with higher SOP-based IDR7,400 TP (from IDR6,800, 12% upside) driven by a higher valuation of its agribusiness. Clearer details of its rights issue have been released, which should eliminate its overhang. The accelerated vehicle monthly sales, expected to recover in 2H16, is also a catalyst for its auto earnings. Negative news, such as lower mining contractors’ fee and higher NPLs, have likely been priced in since its share price fell 15% in the last two weeks. It is trading at an attractive -1SD of its 5-year mean forward P/E.
 
¨ Clearer details of Agri’s rights issue should eliminate its overhang. Since Astra Agro Lestari (Agri) (AALI, BUY, TP: IDR19,500) has disclosed more details of its rights issue – including June 2016 as targeted completion month – we see the overhang on its value to be eliminated. The exercise price of its rights issue should be announced late May, which would be a catalyst for Agri’s share price increase. In addition, we expect Agri to book strong earnings for the current quarter, due to a spike in the domestic CPO price since end-March (average 1Q16 CPO price: IDR6,593/kg vs average price in April: IDR8,630/kg).

¨ Expect better vehicle sales in 2H16. Lower financing costs, as well higher consumer spending should boost both four-wheel (4W) and two-wheel (2W) vehicles sales. New Toyota models – such as the All New Sienta, All New Kijang Innova and All New Fortuner – should increase 4W monthly sales. In addition, finance companies have started lowering their lending rates at end March 2016 – which should provide an additional engine for sales growth. 2W sales growth would be driven by the higher low-end consumer income – which has been boosted by higher CPO price. Notably, last year’s lower YoY 2W sales were attributed to a decline in sales in Kalimantan and Sumatra – where their main income sources are derived from commodities.

¨ Fine tune earnings estimates. Following Astra International’s (Astra) dissapointing 1Q16 earnings, we adjust its FY16-17 earnings estimates to IDR18trn/19trn (-6%/-6%) on the back of lower auto earnings following the implementation of the restructuring of a two-tiered distribution model, effective 1Q16. Our adjustment also includes the lower mining contractors’ earnings impacted by the lower contractors’ fees. We also raise uncollectible receivables (bad-debts) expenses for its financing companies.

¨ Upgrade to BUY, higher TP. We raise our SOP-based TP to IDR7,400 (from IDR6,800), driven by a higher valuation of Agri. We believe that the overhang caused by its rights issue would be eliminated soon. In addition, the accelerated vehicles monthly sales volume would be a catalyst for its auto earnings. Negative news – such as lower mining contractors’ fee and non-performing loans (NPLs) – has likely been priced in since the share price has fallen by c.15% in last two weeks. Astra is now trading at an attractive valuation -1SD of its 5-year average rolling forward P/E. Key risks to our call include weak consumer spending and the depreciating IDR vs USD.

$ASII $AALI $UNTR $BNLI

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P H
Apr 12,2016 11:19:17
Plantation: Inventory Drops Below 2m Tonnes

Malaysia’s inventory level has dropped below the all-important 2m tonne psychological mark to 1.89m tonnes. We expect it to hover around these levels for the next few months, as CPO production may remain flattish until end-2Q16/early-3Q16. We also expect strong CPO prices to persist until the start of the run-up of the next seasonal peak. Maintain OVERWEIGHT. First Resources, Genting Plantations and London Sumatra are our Top Picks for Singapore, Malaysia and Indonesia respectively.

¨ Malaysia’s CPO production rose 16.9% MoM in March, coming from a short month in February and an improvement in rainfall. YoY production was still down 18.4% in March, while YTD production declined 10.2%. We expect FFB output to remain flattish over the next few months, before starting the run-up to the next seasonal peak at end-2Q16/beginning-3Q16.

¨ Better exports in March. Given the shortened February (a festive month), March’s exports recovered 22.9% MoM and brought YTD (Mar 2016) exports to an increase of 10.5% YoY. This was due to higher exports to India (+10% YoY) and the EU (+23% YoY), offset by lower exports to China (-27% YoY).

¨ Inventory fell below 2m tonnes, dropping by a steep 13.1% MoM to 1.8m tonnes. We highlight that stock/usage ratios are now at 10.9% (down from 13.2% in February) and close to the 12-year average of 10%. We expect inventory levels to hover around these levels for the next few months.

¨ Recent developments:
i. US Department of Agriculture’s (USDA) planting intentions survey results show that soybean planting to decline 0.5% to 82.24m acres in 2016, while corn planting is set to rise 6.4% YoY to 93.6m acres;

ii. China’s edible oil imports rose YTD Feb 2016 (+35.6% YoY) while palm oil imports rose 5.7% YoY (vs soybean import decline of 8.7%);

iii. India saw strong 21.8% YoY growth in edible oil imports in YTD Feb 2016, with palm oil imports up 11%. We expect this growth rate to be maintained, as India expects to import 10-15% more edible oil in 2016;

iv. Malaysia’s reinstated export tax levy of 5% for April (for CPO price above MYR2,400/tonne) should see downstream players record better margins as this translates to a USD30-35/tonne discount for CPO feedstock. Although it is still smaller than Indonesia’s USD50/tonne discount, it does make Malaysian refiners slightly more competitive.

¨ Still OVERWEIGHT. We expect more upside for plantation stocks, as most still only reflect CPO prices of MYR2,300-2,500/tonne. YTD, Malaysian CPO production is down 10% but CPO prices have risen 22%. Our Top Pick for the region remains First Resources, while Genting Plantations and London Sumatra Indonesia are top choices for Malaysia and Indonesia respectively.

$AALI $LSIP $SIMP $SMAR $BWPT $SGRO $GOLL
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P H
Mar 21,2016 08:28:32
Plantation - All In Agreement For Higher Prices In 1H16

The general tone of the speakers at the 2016 Palm and Lauric Oils Conference (POC) was bullish. It was a rare occurrence to witness the three “stars” of the POC unanimously bullish on the CPO price direction. Their CPO price forecasts, up to 1H16, had ranged between MYR2,700-3,200/tonne. This is in line with our view that 1H16 would see stronger prices vs 2H16, on the back of the delayed impact of the El Nino. We maintain our MYR2,700/tonne average price for the year and our OVERWEIGHT recommendation. Top Picks include First Resources, Genting Plantations and London Sumatra.

$AALI $LSIP $BWPT $GOLL $SMAR SG:EB5
Bull
P H
Mar 18,2016 20:22:01
Astra International ($ASII): Expect Overhang On Agribusiness’ Rights Issuance

We downgrade our call to NEUTRAL (from Buy) on Astra International as there could likely be an overhang on Astra’s subsidiary Astra Agro’s share price during its rights issuance process, which might be completed in early 2017. We cut our earnings estimates on the back of lower CPO sales volume and higher plantation costs. We also trim our SOP-based TP to IDR6,800 (from IDR7,300, 6% downside), implying 14-13x FY16F-17F P/Es. Meanwhile, wholesales of vehicles improved MoM in February, but it was still slightly below expectations.

¨ A likely overhang on Astra Agro Lestari (Astra Agro) ($AALI). We think that the rights issuance of Astra International’s (Astra) agribusiness arm may create an overhang on Astra Agro Lestari’s share price until it is completed – which is likely to be early next year. All rights issuance proceeds would be used to settle its existing low-interest debts which, given the cost of equity being more expensive than its cost of debts, would increase Astra Agro’s weighted average cost of capital (WACC).

¨ Despite a MoM improvement, February sales were below estimates. Astra’s vehicles sales improved MoM in February. Four-wheel (4W) vehicle wholesales increased to 41,500 units (+4.6% MoM), while two-wheels (2W) vehicle wholesales rose to 362,200 units (+25.9% MoM). However, it was slightly lower than our expectations, in which 2M16 sales were merely around 14% of our full-year estimate. On a YoY basis, both Astra 4W and 2W vehicles wholesales declined, in addition to the fact that the company is losing its 4W vehicle market share due to rising competition, especially from Honda, which aggresively launched attractive new models. For 2W vehicles, Astra’s market share increased to 68.5% (from 67.7% in 2M15) – which is in line with our expectation.

¨ Paring down earnings estimates and TP. We cut our FY16F/FY17F earnings for Astra to IDR19trn/IDR23trn (-4%/-11%) respectively, driven by lower earnings estimates on its agribusiness. We also cut our agribusiness earnings estimates on the back of lower CPO sales volume, as well as a higher plantation cost per hectare. We trim our SOP-based TP to IDR6,800 (from IDR7,300) – which implies a 6% downside – driven by the de-rating on the valuation of Astra’s agribusiness.

¨ Key risks to our views include: i) a relaxation in the loan-to-value (LTV) requirement for auto financing, ii) a faster-than-expected interest rate reduction, iii) faster-than-expected recovery in the prices of CPO and coal, and iv) faster realisation on infrastructure spending.
Bull
P H
Feb 29,2016 14:52:50
Astra Agro Lestari ($AALI): FY15 results disappoint on weak sales and FX losses
- Significant dilution risk from proposed IDR4t rights issue
- Downgrade to SELL; buy $INDF instead


Investment Summary
1) FY15 earnings miss on weak sales and FX losses – Net profit slumped 75% YoY to IDR619b (43% of our FY15E forecast), as revenue fell 20% to IDR13.1t (81% of FY15E), mainly due to weaker selling prices and sales volume for palm products. Earnings were also hurt by IDR580b in forex losses on its USD bank loans.

2) CPO production flat on weak FFB output and yield – As expected, FY15 CPO production was flat (-0.4% YoY) as weak growth in fresh-fruit bunch output (+0.7%) was offset by declines in FFB yield and CPO extraction rate. Palm kernel production was also weak (-0.7% YoY, 95% of our FY15 forecast). CPO average selling price for FY15 was 16% lower YoY in IDR terms, while palm kernel ASP fell 14%.

3) Rights issue poses material dilution risk – AALI has proposed a rights issue to raise up to IDR4t to repay some of its ~US$500m in USD debt and reduce interest costs. We estimate potential EPS dilution of up to 20% from the rights issue.

4) Risk/reward unattractive, downgrade to SELL – The likely dilution from the proposed rights issue has further hurt the stock’s attractiveness, despite the improving CPO price outlook for this year. With production remaining weak, we think the risk/reward profile of the stock is poor at the current price. Downgrade to SELL, with a lower IDR12,400 fair value (13x FY16E PE) to factor in the dilution risk and disappointing FY15 result. Buy Indofood Sukses Makmur ($INDF) instead for cheaper, less volatile exposure to Indonesia consumer staples and potential CPO price upside.

Key Investment Risks
- Upside risks: Significant CPO price gains, better than expected production volume. Downside risks: Sharp drop in CPO prices; significant increase in the value of the rupiah; crop damage due to bad weather, disease or other natural disasters; higher labour and fertiliser costs; weaker-than-expected domestic demand for palm oil; increases in export tax or export bans on palm oil and its derivatives; government restrictions on landbank expansion.
Bear
P H
Feb 28,2016 10:31:37
Astra Agro Lestari ($AALI)
Value-Destructive Rights Issue


We were surprised with AALI’s weak 4Q15 performance. Its plan to conduct a pre-emptive rights issue of IDR4trn would be value destructive as AALI intends to use the proceeds to repay its bank loan, which has an effective interest rate of just around 2%. We fine-tune our forecasts and downgrade to NEUTRAL with a IDR14,850 TP based on 12.5x target P/E. Using the current market cap and rights issue information, its theoretical ex-rights price is around IDR14,850. We expect an overhang on the stock until the rights issue has been settled.

* Delayed selling of CPO stock to lock in better prices in 1Q16. AALI’s inventory in 4Q15 increased by IDR426bn because it delayed selling some CPO in 4Q15 to lock in better prices in 1Q16. This strategy is likely to have worked quite well as it has since cleared the excess inventory in 1Q16 during the CPO price recovery.

* Value-destructive rights issue. All the proceeds of the rights issue would be used to settle its existing debt. AALI’s bank loan escalated from IDR2.7trn in FY13 to IDR7.7trn in FY15, which was mostly used to fund its refineries and new planting. As of 31 Dec 2015, effective interest expense on AALI’s debt was around 2% (all its debt are in USD). We believe the rights issue would be value destructive, given that the cost of equity is more expensive than the cost of debt. Using current market cap and the information on the rights issue, its theoretical ex-rights price would be around IDR14,850. We expect there to be an overhang until the rights issue has been completed.

* Trimming forecasts.We fine tune our earnings forecasts by 18.1% and - 26.2% for 2016-2017 to incorporate weak 4Q15 earnings. We have yet to factor in the impact of the rights issue in our forecasts until AALI’s EGM on 11 Apr, where management would seek approval for it.

* Downgrade to NEUTRAL with TP of IDR14,850. Our downgrade is based on two factors: i) weak 4Q15 performance, and ii) value destructive rights issue. Our TP of IDR14,850 is based on P/E target of 12.5x FY16F EPS, which implies EV/ha of USD10,475 - within the range of Indonesia listed planters of USD7,000-26,000.
Bull
P H
Feb 03,2016 12:08:51
$AALI: 12M15 production performance: Unexciting

§ Lower FFB and flat CPO production in December: Due to continued flat matured area growth (2015: 259k ha; 2014: 253k ha) and lower yields (2015: 21.7 ton/ha; 2014: 22.0 ton/ha), AALI’s 12M15 FFB production only reached 5.6mn tons (102% of our 2015F), flat y-y. The 12M15 CPO production of 1.7mn tons (102% of our 2015F) was also relatively unchanged y-y, in line with the flat FFB production growth (exhibit 5). As the December data had already shown a decline in m-m FFB production of 10% due to the El Nino effect, we maintain our 2016 estimates for FFB (5.3mn tons, -4% y-y) and CPO production (1.6mn tons, -3% y-y). Note that the December CPO production was flat at 147k tons, showing higher external purchases for FFB processed.

§ Hurt by lower CPO prices: AALI’s CPO selling prices continued their downtrend, reaching an average of only IDR6,971/kg for FY2015 , -16% y-y, with the December price at just IDR5,791/kg (exhibit 10), -4% m-m and -25% y-y. Going into 2016, we expect the CPO selling price to slightly increase to around IDR7,400/kg, +6% y-y mainly on a stronger USD.

§ Expect better 4Q15 net profit on high forex gain: We believe the 4Q15 EBIT would be lower q-q and y-y considering lower 4Q15 CPO sales volumes of only 215k tons, -22% q-q and -42% y-y, as well as an unsupportive 4Q15 CPO price of just IDR6,012/kg, -6% q-q and -23% y-y. Meanwhile, 4Q15 olein sales volumes only reached 112k tons, +5% q-q and +1.4% y-y, which would likely have a minimal impact on revenue. Nonetheless, we expect a much better 4Q15 net profit, mainly supported by forex gain of around IDR300bn based on our estimate.

Recommendation: REDUCE; IDR14,300 TP; Expensive 2016 PE of 27x
At this stage of the market cycle, we believe sentiment on CPO is waning, dragged down by France’s decision to impose progressive import tax, which could be followed by other European countries. Additionally, low oil price is likely to also hold back CPO prices. Thus, while AALI has outperformed in the past month (exhibit 4), we believe it provides an exit opportunity for investors, particularly given its weak operating performance outlook. Based on our 2016F net profit of IDR978bn, +53% y-y, AALI now trades at an expensive 2016 PE of 26.6x, around 10% premium to the Malaysian sector (exhibit 6). Thus, we reiterate REDUCE with 12M TP at IDR14,300, based on a 2016F PE of 23x, around 5% discount to the Malaysian sector. Risk to our call includes higher CPO prices on El Nino effect.
Bear
P H
May 11,2015 12:57:13
Indeks Harga Saham Gabungan (IHSG) menguat +0,1% (+3 poin) di level 5184,45 poin pada penutupan perdagangan sesi 1, Senin (11/5). Indeks LQ45 naik +0,15% ke posisi 900. Jakarta Islamic Index (JII) naik +0,27% ke posisi 699 poin. Indeks Kompas 100 naik +0,19% ke level 1.134 poin. IDX30 naik +0,15% ke level 466 poin. Pemodal asing membukukan transaksi net sell (jual bersih) -Rp37 miliar. Transaksi yang tercapai Rp2,136 triliun dengan volume trading sebanyak 5,755 miliar saham. Sektor: Agri +2,07% Mining +1,70% Properti -0,69% Infrastruktur +0,16% Finance +0,04% Trade -0,14% Manufaktur -0,17% Consumer -1,17% Basic ind -0,07% Misc-ind -0,25% Kini sektor agro dan mining menjadi penopang utama laju IHSG pada perdagangan sesi siang awal pekan ini. Saham agri ditunjang oleh naiknya AALI +3,07%. BWPT ++3,75%. DSNG +1,41%. GZCO +1,12%. SIMP +2,34%. SSMS +1,01%. Adapun saham-saham mining yang bergerak naik antara lain: ADRO +5,23%. ANTM +0,63%. ARTI +4,44%. HRUM +2,97%. INCO +1,24%. ITMG +5,51%. Kelompok saham properti bergerak negatif seiring terbitnya Revisi PMK No 90 /PMK.03/2015 tentang pengenaan pajak barang super mewah (PPh 22) untuk properti. Saham-saham properti yang melorot adalah: APLN -1,73%. BSDE -0,28%. CTRA -2,92%. JRPT -7,34%. LPCK -0,90% . LPKR -1,19%. Adapun sektor yang turun paling dalam adalah consumer -1,17%. Koreksi consumer dimotori saham: DVLA -1,11%. KAEF -0,84%. GGRM -0,16%. TSPC -1,67%. ULTJ -2,35%. UNVR -0,06%. Bursa Asia Sentimen kebijan Tiongkok yang memangkas suku bunga menjadi sentimen utama bagi market regional. Bank Sentral Tiongkok (People`s Bank of China (PBOC) menurunkan suku bunga kredit dan deposito bertenor 1 tahun sebesar 25 bps. Indeks Nikkei naik +1,27% (+245,32 poin) ke posisi 19.624,51 poin. Indeks Hang Seng naik +0,50% (+132,29 poin) ke level 27.714,63 poin Indeks Shanghai naik +1,18% (+49,62 poin) ke posisi 4.255,54 poin Indeks Straits Times +0,46% (+15,72 poin) ke level 3.467 poin (pukul 12.00 WIB).
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P H
Apr 27,2015 16:23:24
AALI langsung kena support. Nekad beli di support??? Lihat besok yah
Bear
P H
Apr 15,2015 01:26:16
Sawit lagi jelek
Bear
Quotes delayed, except where indicated otherwise.
AALI
14,575.00 0.00 (0.00%)
Astra Agro Lestari Tbk.
Last Update 02:54:10