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P H
Apr 18,2017 13:16:18

Key takeaways from meeting with Gajah Tunggal ($GJTL)

  • Gajah Tunggal aims revenue growth of 5% - 10% this year. However, its gross margin will be normalized at 15% - 20%, lower than23.4% in FY16.
     
  • Gajah Tunggal will do refinancing on its debt this year, which company expects to have better interest rate for the company.
     
  • Its plants utilization currently stood at 66%-78%. Moreover, the company will expand its TBR tire capacity to 2,200pcs/day this year, from only 1,000pcs/day last year.
     
  • Domestic market will still be the biggest contributor to revenue with 55% of revenue this year, while the rest will be from exportmarket.
     
  • Gajah Tunggal has annual contract with raw material suppliers based on volume and its price will use average price from previous month.
     
  • Currently, the stock is trading at 5.95x FY16 PE. (Dony Gunawan)
     
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P H
Dec 01,2016 23:17:55

Automotive: Government revises tire import regulation

The import regulation forces tire importers to obtain several certifications from Ministry of Industry and Ministry of Trade regarding import regulation. Tire importers are only allowed to import products to support production process. (IQplus).

Bahana comment: This regulation will benefit Gajah Tunggal ($GJTL), as the biggest local tire producer in Indonesia, in the form of less competition.

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P H
Nov 29,2016 10:14:30

FSA released a new stock list for Syariah index

The Financial Services Authority (OJK) has released a new stock list for the Syariah index. The FSA has added Waskita Beton Precast ($WSBP), Energi Mega Persada ($ENRG), Aneka Gas Industri ($AGII), Malindo Feedmill ($MAIN), Gajah Tunggal ($GJTL), Bumi Resources Mineral ($BRMS), Cikarang Listrindo ($POWR), and Hexindo Adiperkasa ($HEXA). Furthermore, The FSA has deleted Surya Citra Media ($SCMA), Jasa Marga ($JSMR), Modernland Realty ($MDLN), and Nirvana Development ($NIRO). (OJK).

Bahana comment: SCMA's removal from the syariah index has been well flagged by management in the past couple of months, given the company's strong revenue growth coming from the tobacco sector (non-halal), which accounts for more than 10% of total revenue. Note that competitor $MNCN is also not inside the Syariah index list.

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P H
Aug 29,2016 09:19:01
P H
Jul 27,2016 08:50:24
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 15,2016 09:58:12
Indonesia Automotive: May auto sales: Weak despite Lebaran preparation

* Poor retail sales with 4W: -2.0% y-y; 2W: -1.7% y-y: Based on the sales figures (exhibits 7 and 8) released by Gaikindo (4W association) and AISI (2W association), May 2016 4W wholesale sales reached 88.5k units, +4.5% m-m and +11.5% y-y, resulting in 5M16 sales of 440k units, -0.6% y-y. However, retail sales data was not as rosy as the wholesale figures as May 4W sales only reached 86k units, +2% m-m but -2% y-y, resulting in 5M16 sales of 432k units, flat y-y. For 2W, May sales reached 462k units, -3.5% m-m and -1.7% y-y, for 5M16 sales of 2.4mn units, -6% y-y. Both 4W and 2W numbers were lower than our expectations for the full year.

* ASII’s retail sales better than industry’s; Honda recovered m-m: In May, ASII's wholesale market share reached 55.3% (Apr-16: 55.7%; May-15: 49.7%) with monthly sales of 49.0k units, +3.8% m-m and +24.3% y-y. However, on retail sales, ASII booked 50.3k units, +3.7% m-m and +5.9% y-y, or 5M16 sales of 231k units, +7.9% y-y, helped by LCGC models and the newly launched Innova and Fortuner, in line with our estimates. Nissan & Datsun’s sales of 4k units were -2% m-m and -7% y-y with higher proportion of Datsun units. For Honda, monthly retail sales recovered to 13.8k units, +20% m-m and +13% y-y (wholesale: 17.4k, +21% m-m and +54% y-y).

* ASII’s average discount rose from 7.2% in May to 7.5% in June: Based on our channel checks, ASII’s discount increased from 7.2% in May to 7.5% in June (exhibits 12 and 13), mostly due to LCGC and Low SUV models, and Toyota Avanza. In June, Toyota Avanza was discounted by IDR20mn (9.9%), higher than the IDR19mn (9.1%) in May. Toyota Agya carried a higher discount of IDR10mn (7.9%), compared to IDR8mn (6.3%) in May. Honda maintained its IDR8mn (3.9%) discount for Honda Mobilio. As such, we expect the average 2016 discount level to hover around current levels.

* Honda’s 2W (ASII) sales higher on market share: Honda’s May 2W sales (ASII) reached 339k units, -2.7% m-m but +11% y-y, resulting in 5M16 sales of 1.8mn units, +1% y-y, in line with our expectation. Yamaha booked sales of 112k units, -6.7% m-m and -25.6% y-y, bringing 5M16 sales to 592k units, -18.6% y-y. We believe that higher scooter demand will continue to benefit Honda’s market share (5M16: 72.8%; 5M15: 68.1%).

Outlook: Intense competition likely to persist
Despite some short-term improvements, we expect current intense competition and discounts to persist in the medium term, especially as several brands will launch new products in 2017. On slow purchasing power growth ahead, we believe that 4W sales will only experience a 7% y-y CAGR in 2016-20 while 2W sales will likely grow just 2.5% y-y. In 2016, we expect 4W sales volume recovery to 1.08mn units, +7% y-y, and flat 2W sales volumes of 6.4mn units.

Recommendation: REDUCE ASII; HOLD GJTL & BUY IMAS
We believe weak purchasing power and the government’s aggressive taxation drive, including tax amnesty, will continue to take a toll on big ticket items. For ASII, we maintain our REDUCE rating with SOTP-based 12M TP of IDR5,650 due to its adverse impact from dealership restructuring. We raise IMAS from Hold to BUY on 33% upside to our DCF-based TP of IDR2,000 on severe ytd underperformance (exhibit 4). However, we cut GJTL from Buy to HOLD as it has surpassed our DCF-based TP of IDR860. Risks: Higher margins ($ASII), lower Datsun sales ($IMAS), and weaker/stronger IDR ($GJTL).
Bull
P H
Mar 16,2016 09:41:29
Indonesia Automotive: February wholesale auto sales: Flattish

§ 4W: -0.6% y-y; 2W: -5.6% y-y: Based on sales figures (exhibits 5 and 6) released by Gaikindo (4W association) and AISI (2W association), February 2016 4W sales reached 88k units, -0.6% y-y, but +3.8% m-m, in line with our expectation of unexciting demand. For 2W, February sales reached 525k units, -5.6% y-y but +26% m-m, in line with our expectation of weak demand from the outer Java area due to unsupportive commodity prices.

§ ASII market share flat: In February, ASII's market share reached 47.0% (Jan-16: 46.6%; Feb-15: 49.0%) with monthly sales of 41.5k units, -4.7% y-y but +4.6% m-m. Despite support from the new Innova and new Fortuner, sales of Avanza were disappointing compared to last year. Nissan booked monthly sales of 1.8k units, -47% y-y but +31% m-m. Honda booked strong February sales of 19k units, +35% y-y but -5% m-m, due to its new model, the Honda BRV.

§ Flat to slightly lower discounts in March: Based on our channel checks, we are seeing flat to slightly lower discounts across the board in March compared to February (exhibits 11 and 12). In March, the Toyota Avanza is being discounted by IDR15mn (7.4%), slightly lower than the IDR16mn (8.4%) level in February, while the Daihatsu Xenia is being discounted by IDR15mn (8.4%), similar to the February level. We expect the discount level to hover around the current level, slightly lower than last year’s level.

§ Honda 2W ($ASII) sales improve m-m but decrease y-y: Honda’s February 2W sales ($ASII) reached 363k units, -4% y-y and +26% m-m, reflecting a market share of 69.1% (Jan-16: 69.1%; Feb-15: 67.8%). Yamaha booked even lower sales of 139k units, -8% y-y but +24% m-m, reflecting a lower market share of 26.5% (Jan-16: 26.9%; Feb-15: 27.1%).

Outlook: Margins likely to remain unexciting on intense competition
This fight for market share is likely to be exacerbated by continued soft farmer incomes due to low commodity prices, with some purchasing power recovery only likely to materialize in 2H16. Thus, we expect margins to remain unexciting despite a low 2015 base. On volume, we forecast flat 2016 domestic sales of 1.02mn units for 4W and 6.4mn units for 2W, despite lower interest rates and gasoline prices. That said, we expect intense competition and weak demand to result in flat market shares at best for both $ASII and $IMAS.

Recommendation: REDUCE $ASII; HOLD $IMAS; BUY $GJTL
At this stage of the market cycle, we retain our UNDERWEIGHT call on the Indonesia automotive sector on a likely fight for market share and due to limited purchasing power growth on a weak commodity price trend. For $ASII, unexciting earnings prospects have us maintaining our REDUCE rating and SOTP-based 12M TP of IDR5,550. For $IMAS, we retain our HOLD rating as the current price is approaching our DCF-based TP of IDR2,000. For $GJTL, we retain our BUY rating and DCF-based TP of IDR860 on expected improved performance. Risks to our calls are higher revenue and margins for $ASII, higher or lower auto sales for $IMAS and a weaker IDR and margin for $GJTL.
Bull
P H
Mar 16,2016 09:41:29
Indonesia Automotive: February wholesale auto sales: Flattish

§ 4W: -0.6% y-y; 2W: -5.6% y-y: Based on sales figures (exhibits 5 and 6) released by Gaikindo (4W association) and AISI (2W association), February 2016 4W sales reached 88k units, -0.6% y-y, but +3.8% m-m, in line with our expectation of unexciting demand. For 2W, February sales reached 525k units, -5.6% y-y but +26% m-m, in line with our expectation of weak demand from the outer Java area due to unsupportive commodity prices.

§ ASII market share flat: In February, ASII's market share reached 47.0% (Jan-16: 46.6%; Feb-15: 49.0%) with monthly sales of 41.5k units, -4.7% y-y but +4.6% m-m. Despite support from the new Innova and new Fortuner, sales of Avanza were disappointing compared to last year. Nissan booked monthly sales of 1.8k units, -47% y-y but +31% m-m. Honda booked strong February sales of 19k units, +35% y-y but -5% m-m, due to its new model, the Honda BRV.

§ Flat to slightly lower discounts in March: Based on our channel checks, we are seeing flat to slightly lower discounts across the board in March compared to February (exhibits 11 and 12). In March, the Toyota Avanza is being discounted by IDR15mn (7.4%), slightly lower than the IDR16mn (8.4%) level in February, while the Daihatsu Xenia is being discounted by IDR15mn (8.4%), similar to the February level. We expect the discount level to hover around the current level, slightly lower than last year’s level.

§ Honda 2W ($ASII) sales improve m-m but decrease y-y: Honda’s February 2W sales ($ASII) reached 363k units, -4% y-y and +26% m-m, reflecting a market share of 69.1% (Jan-16: 69.1%; Feb-15: 67.8%). Yamaha booked even lower sales of 139k units, -8% y-y but +24% m-m, reflecting a lower market share of 26.5% (Jan-16: 26.9%; Feb-15: 27.1%).

Outlook: Margins likely to remain unexciting on intense competition
This fight for market share is likely to be exacerbated by continued soft farmer incomes due to low commodity prices, with some purchasing power recovery only likely to materialize in 2H16. Thus, we expect margins to remain unexciting despite a low 2015 base. On volume, we forecast flat 2016 domestic sales of 1.02mn units for 4W and 6.4mn units for 2W, despite lower interest rates and gasoline prices. That said, we expect intense competition and weak demand to result in flat market shares at best for both $ASII and $IMAS.

Recommendation: REDUCE $ASII; HOLD $IMAS; BUY $GJTL
At this stage of the market cycle, we retain our UNDERWEIGHT call on the Indonesia automotive sector on a likely fight for market share and due to limited purchasing power growth on a weak commodity price trend. For $ASII, unexciting earnings prospects have us maintaining our REDUCE rating and SOTP-based 12M TP of IDR5,550. For $IMAS, we retain our HOLD rating as the current price is approaching our DCF-based TP of IDR2,000. For $GJTL, we retain our BUY rating and DCF-based TP of IDR860 on expected improved performance. Risks to our calls are higher revenue and margins for $ASII, higher or lower auto sales for $IMAS and a weaker IDR and margin for $GJTL.
Bull
P H
Mar 16,2016 09:41:28
Indonesia Automotive: February wholesale auto sales: Flattish

§ 4W: -0.6% y-y; 2W: -5.6% y-y: Based on sales figures (exhibits 5 and 6) released by Gaikindo (4W association) and AISI (2W association), February 2016 4W sales reached 88k units, -0.6% y-y, but +3.8% m-m, in line with our expectation of unexciting demand. For 2W, February sales reached 525k units, -5.6% y-y but +26% m-m, in line with our expectation of weak demand from the outer Java area due to unsupportive commodity prices.

§ ASII market share flat: In February, ASII's market share reached 47.0% (Jan-16: 46.6%; Feb-15: 49.0%) with monthly sales of 41.5k units, -4.7% y-y but +4.6% m-m. Despite support from the new Innova and new Fortuner, sales of Avanza were disappointing compared to last year. Nissan booked monthly sales of 1.8k units, -47% y-y but +31% m-m. Honda booked strong February sales of 19k units, +35% y-y but -5% m-m, due to its new model, the Honda BRV.

§ Flat to slightly lower discounts in March: Based on our channel checks, we are seeing flat to slightly lower discounts across the board in March compared to February (exhibits 11 and 12). In March, the Toyota Avanza is being discounted by IDR15mn (7.4%), slightly lower than the IDR16mn (8.4%) level in February, while the Daihatsu Xenia is being discounted by IDR15mn (8.4%), similar to the February level. We expect the discount level to hover around the current level, slightly lower than last year’s level.

§ Honda 2W ($ASII) sales improve m-m but decrease y-y: Honda’s February 2W sales ($ASII) reached 363k units, -4% y-y and +26% m-m, reflecting a market share of 69.1% (Jan-16: 69.1%; Feb-15: 67.8%). Yamaha booked even lower sales of 139k units, -8% y-y but +24% m-m, reflecting a lower market share of 26.5% (Jan-16: 26.9%; Feb-15: 27.1%).

Outlook: Margins likely to remain unexciting on intense competition
This fight for market share is likely to be exacerbated by continued soft farmer incomes due to low commodity prices, with some purchasing power recovery only likely to materialize in 2H16. Thus, we expect margins to remain unexciting despite a low 2015 base. On volume, we forecast flat 2016 domestic sales of 1.02mn units for 4W and 6.4mn units for 2W, despite lower interest rates and gasoline prices. That said, we expect intense competition and weak demand to result in flat market shares at best for both $ASII and $IMAS.

Recommendation: REDUCE $ASII; HOLD $IMAS; BUY $GJTL
At this stage of the market cycle, we retain our UNDERWEIGHT call on the Indonesia automotive sector on a likely fight for market share and due to limited purchasing power growth on a weak commodity price trend. For $ASII, unexciting earnings prospects have us maintaining our REDUCE rating and SOTP-based 12M TP of IDR5,550. For $IMAS, we retain our HOLD rating as the current price is approaching our DCF-based TP of IDR2,000. For $GJTL, we retain our BUY rating and DCF-based TP of IDR860 on expected improved performance. Risks to our calls are higher revenue and margins for $ASII, higher or lower auto sales for $IMAS and a weaker IDR and margin for $GJTL.
Bull