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Sep 06,2017 14:28:38

Perusahaan Gas Negara ($PGAS) – Another Downside Surprise On Distribution Margin

PGN recorded a 2Q17 net loss of IDR41.2m – below our and consensus estimates – driven by a high quarterly ETR and contractions in both its gas distribution volume and distribution dollar margin, which were below management’s guidance. Other than the disappointing performance, we do not see any positive catalysts for the immediate term. Thus, we downgrade our recommendation to NEUTRAL (from Buy) and cut our DCF-based TP to IDR2,000 (from IDR3,450, 6% downside), post the corresponding 40% reduction in our FY17-18 earnings estimates.

- Volume declined after non-renewal of Muara Tawar contract. Perusahaan Gas Negara’s (PGN) distribution volume as of 6M17 declined 8.2% QoQ or 5.9% YoY. This was due to the non-renewal of Perusahaan Listrik Negara’s (PLN) Muara Tawar power plant gas purchase agreement which expired in March (the contracted amount was approximately 100mmscfd at USD7.90/mmbtu). While PGN did not officially announce this, the market was informed through PLN’s announcement and analysts speaking to management separately. Thus, we believe the market has priced in the decline in volume, but not the further erosion in distribution margin.

- Distribution margin at a new low, back-loading of opex and high effective tax rate (ETR). PGN's 2Q17 revenue/gross profit fell 10.9%/28.8% QoQ respectively, and it recorded a net loss of USD41.2m. Its gross margin narrowed to 23.7% (1Q17: 29.7%). Based on our calculation, its 2Q17 blended gas distribution margin hit a new low of USD2.32/mmbtu (1Q17: USD2.58/mmbtu) on a lower distribution ASP of USD7.95/mmbtu (1Q17: USD8.56/mmbtu). Opex surged 82.4% QoQ. PGN also recorded another impairment loss of USD16.7m on its oil and gas assets.

- Gas distribution price is declining without intervention. PGN's declining ASP is a major headwind in sustaining its guided distribution margin of USD2.60-3.00/mmbtu, even without direct intervention. There is still pressure from industrial users asking for a lower natural gas price – and the issue is further exacerbated by pressure from the power sector which forms the bulk of its demand. From our conversation with some business owners and judging from PGN's distribution volume breakdown, both industrial and power sector demand for natural gas remains weak.

- No visible positive catalyst; downgrade to NEUTRAL. PGN is now trading at 15.5x/13x FY17F/FY18F P/Es, on our revised estimates - ie valuations are no longer cheap. We roll over our DCF base year to FY18, while our new TP of IDR2,000 implies 12.5x FY18F P/E. We believe PGN may eventually become a high crude oil beta stock, due to the expansion of its exploration and production arm, Saka Energi (which now contributes to 15% of revenue but is not profitable). That said, its gas distribution business outlook remains unclear at this juncture. (Norman Choong, CFA)

Sep 06,2017 09:12:40

Pasar Hari Ini

Ekonomi :

- Pemerintah akan memacu belanja di 2H17 dan memastikan tidak ada penghematan anggaran di akhir tahun dalam rangka menggerakkan perekonomian. Agar belanja tidak berlebihan (tidak terjadi defisit di atas 2.9%), pemerintah akan mengevaluasi penerimaan dan pengeluaran setiap bulan. Sampai Agust'17, penerimaan pajak tumbuh 10.2% YoY namun hanya mencapai 53% dari target APNB-P 2017. Ada sentimen positif terutama untuk sektor Infrastruktur

Berita penting di koran pagi ini :

- Pemerintah menargetkan perjanjian pinjaman (dari Jepang) untuk proyek pelabuhan Patimban senilai Rp13.7 triliun akan ditandatangani pada Sept'17. Setelah perjanjian tersebut selesai, lelang kontraktor dan konsultan dapat dilaksanakan pada Okt'17. Ada sentimen positif untuk SSIA karena SSIA punya kawasan industri Subang dan sedang mengusulkan ruas tol Patimban - Subang

- $PGAS (-) menurunkan estimasi laba bersih 2017 menjadi Rp2 triliun dari awalnya Rp3.7 triliun seiring dengan banyaknya kendala yang dihadapi seperti penurunan volume distribusi gas, penurunan harga gas dan isu penggabungan usaha dengan Pertamina

- $BTPN (+) melanjutkan transformasi usaha menjadi bank digital agar lebih efisien setelah sejak 2013 mengembangkan platform bank digital (BTPN Wow!) dan Jenius sejak 2016. Transformasi tersebut tidak merubah fokus untuk melayani masyarakat menengah bawah terutama pensiunan

- $CTRA (+) menargetkan Marketing Sales senilai Rp1 triliun dari proyek klaster terbaru di Surabaya (Northwest Hill) sebanyak 500 unit rumah tapak dan 100 unit ruko

Apr 25,2017 11:16:29

We reiterate our BUY recommendation on PGN ($PGAS) with unchanged DCF-based TP of IDR3,450 (43% upside). We believe its low annualised ROE of 11.8% – and free cash flow generation that is merely sufficient for capex and dividend payment – should deter any intervention with its ASP. PGN recorded 1Q17 earnings of USD96.8m, 24-28% of our and consensus estimates respectively, driven by lower QoQ opex and higher profitability on oil and gas production.

  • Distribution segment sees a new norm. Perusahaan Gas Negara’s (PGN) blended distribution spread has stabilised at USD2.60/mmbtu since 3Q16. Its distributed volume of 816mmcfd reflects its new supply agreement to state power producer Perusahaan Listrik Negara’s (PLN) Muara Tawar power plant at a lower price, but higher volume. 1Q17 distribution volume was flat YoY, which shows weak industrial usage, specifically in the textile, ceramic, glass, and cement sector. Transmission volume saw a 14.2% YoY decline, but overall, the impact is small.
  • Potential intervention on price remains a drag on valuation. We continue to observe pressure from industrial users asking for a lower natural gas price. Recall that in late March, the Ministry of Energy and Mineral Resources was in a discussion to regulate the distribution margin at 7% of upstream gas cost, which poses further downside to ASP. However, PGN has maintained its blended margin guidance of USD2.60-3.00/mmbtu, which we believe is reasonable, as its FY16 free cash flow of USD650m was merely sufficient to maintain its USD500m capex target and usual dividend payout of 40-50%.
  • Oil and gas lifting to increase by 30% YoY. PGN had earlier guided that its oil and gas lifting target of 30% YoY increased after Muara Bakau started production in 2H17. This segment only broke even in 2016, but recorded a gross profit of USD15m in 1Q17. Due to its low base, PGN earnings have become more sensitive towards the contribution from this segment, while a higher YoY average crude oil price should bode well.
  • 1Q17 results were above consensus, on the back of 61% QoQ decline in quarterly opex while the oil and gas production segment recorded QoQ gross profit, also compared to gross losses of USD5.5m in 1Q16. Net gearing decreased to 0.43x (4Q16: 0.50x).
  • Reiterate BUY on undemanding valuation and decent results. PGN now trades at 10.7x FY17F earnings compared to its 5-year historical mean of 13x. Meanwhile, FY17F earnings are set for high double-digit growth, due to the low base effect of FY16. Potential catalysts are a higher crude oil price and improvement in distribution volume to the industrial users. Our DCF TP (WACC: 8.5%, TG: 3%) implies 15x FY17F P/E.
  • Downside risks would mainly be on the negative news from the potential merger with Pertamina, news flow on this has been quiet since mid-2016. (Norman Choong, CFA)

Dec 14,2016 09:27:04

Perusahaan Gas Negara ($PGAS) - Set For a Reversal Of Fortune

The pressure on PGN’s distribution margins, stemming from competing feedstock, is set to reverse. This is because the overhang on its stock from worries over the gas price cut overhang has been removed, while coal prices have doubled since early 2016 and crude oil prices are on the rise. With no more asset impairments in hand, PGN’s E&P segment’s operating margins could be lifted by the rise in crude oil prices. Overall, we expect gross margins to improve. Maintain BUY and DCF-based IDR4,000 TP ( also implying 15x FY17F reported earnings.

¨ No impact from the gas price cut. On 5 Dec, the Government announced that the natural gas tariff for three priority sectors in the upstream segment – fertiliser, steel and petrochemicals – would be cut by USD0.50-1.50/mmbtu. Only five companies stand to benefit from the lower tariff, of which two would also receive lower transmission fees from Pertamina Gas. These companies are big volume gas users and buy the commodity directly from oil & gas blocks, bypassing distributors such as Perusahaan Gas Negara (PGN).

¨ No definite date for further price intervention. The tariff cut was lower than what was announced earlier. Also, the ceramic, glass, oleochemical and rubber glove industries would also not benefit from the lower tariffs. Energy and Mineral Resources Deputy Minister Mr Archandra Tahar stated that, in the event of a similar reduction in gas tariffs, these sectors – which use natural gas for power generation only – would have a lower multiplier impact on the economy. This is in comparison with the fertiliser, steel and petrochemical industries, which also use natural gas as a raw material. Thus, the decision to not lower tariffs on these sectors at this juncture, in view of the impact to the Government’s budget.

¨ Sentiment should shift towards fundamental/recovery potential. While talk of a Pertamina merger still linger, (see our 30 Aug A Study Of PGN, Pertamina And Pertagas report), we believe the most detrimental factors, ie distribution margins or potential margins compression from the gas price cut, is largely over. We believe fundamental variables, such as gas distribution volumes and distribution margins recovery, as well as the recovery potential of its troubled E&P and LNG segments, are likely to drive its share price. And these factors are turning towards PGN’s favour, in our opinion.

¨ Rising crude oil prices and higher coal price bodes well for PGN. As coal prices have doubled and crude oil prices are on the rise, PGN’s appeal (as natural gas is a competing feedstock) ought to increase. This, in turn, would reverse the pressure on its distribution margin. In our opinion, PGN should maintain its ex-LNG pipe gas distribution margin of USD3.00/mmbtu, this might even improve in FY17 should volumes recover and surcharges reappear. With 2017 crude assumption of USD44.50/bbl, Its E&P segment’s impairment is done, while operating margins would benefit from higher ASP.

¨ Downside risks. PGN is now trading at 11x of our FY17F reported net profit, vis-à-vis its 5-year historical mean of 13x. Downside risks to our call are still an intervention from the Government, which may put pressure on margins, as well as an unfavourable outcome from the merger with Pertamina. (Norman Choong, CFA)

Dec 14,2016 08:18:20

$PGAS - The Ministry of Energy and Mineral Resources issued regulation no 40 of 2016 on gas prices. The new regulation that cuts gas prices for petrochemical, fertilizers and steel to $6/mmbtu from average $7.5 will apply to 5 SOE so far. However, the other industries such as glass, ceramics, rubber gloves, and oleochemical industries demand the gov’t to clarify the new regulation to include those industries.

Dec 01,2016 11:33:39

Regional Oil & Gas: OPEC Meeting: Christmas Comes Early

OPEC members have been able to resolve their differences and have all agreed to share the burden of production cuts. Starting Jan 17, production target would be 32.5mbpd, a 1.1mbpd cut from Oct 16 level of 33.6mbpd. We had initially anticipated 33mbpd production from OPEC members, as such, our view does not change dramatically as a result of this agreement. We maintain our crude oil price forecast average of USD60/bbl for 2017F and the longer-term. OVERWEIGHT maintained on the mid-stream and downstream players, with upstream players still a momentum play.

¨ We maintain our crude oil price forecast average of USD60/bbl for 2017F and longer-term, with the markets looking to be more bullish than prior to the Organisation of Petroleum Exporting Countries (OPEC) deal. However, there is downside risk from our expectations. The monitoring and implementation of the production cuts could result in non-compliance. Shale oil producers could return at a faster pace. We are also not certain how much this deal hinges on non-OPEC joining. If the deal depends on non-OPEC joining, there are higher chances of non-compliance and the deal can fall apart. Finally, Trump’s actions could provide further challenges for the upstream sector.

¨ Our view does not change much. We view that in that any action by OPEC would be self-defeating – as any intervention would result in higher oil prices, leading to higher cost producers entering the market and lowering oil prices again. We believe that the current oil market mechanism is already working, without its intervention – low crude oil prices are needed to clear the markets by cutting production at the highest cost producers. However, this agreement will in no doubt, should it be well implemented and stretched over a longer period of time, hasten the clearing of the inventory overhang.

¨ As financial markets focus on the shorter-term outlook for oil markets, upstream E&P players are looking at the longer-term picture. Mexico would be auctioning 10 deepwater blocks. This has drawn much interest from global oil majors such as Chevron (CVX US, NR), LUKOIL (LKOD LI, NR), CNOOC (883 KH, NR) and Petroliam Nasional (Petronas). This is one of the Government of Mexico’s first steps in opening up its upstream E&P business that has long been tightly held by its national oil company (NOC), Petroleos Mexicanos (Pemex).

¨ This resonates with our view that there is some glimmer of hope as we enter 2017. We believe that any conventional field development projects that have been put on hold since the oil price collapsed should start to look into locking-in contractors over the next 12 months, in order to take advantage of the current depressed market environment: Regional Oil & Gas: Glimmer Of Hope.

¨ OVERWEIGHT mid/downstream players. Global inventory would likely remain in oversupply in 2017 in our view, thus storage providers and tankers should still benefit – MISC and Dialog Group (DLG MK, BUY, TP: MYR1.77). As we expect markets to remain volatile, we recommend AKR Corporindo, Perusahaan Gas Negara (PGAS) and Yinson as defensive plays with strong balance sheets and negative correlation to crude oil price movements. For seasonal plays where quarterly fluctuations in demand and supply influence product prices, we like Petronas Chemicals and PTT Global Chemicals (PTTGC). Upstream companies remain momentum plays – prefer larger caps: PTT Exploration and Production (PTTEP), Keppel Corp and Sembcorp Industries. (Kannika Siamwalla CFA, Norman Choong CFA, Wan Mohd Zahidi)


Nov 28,2016 12:15:05

A month since taking office as Minister of Energy and Natural Resources (ESDM), Ignasius Jonan has been focusing on two key regulations: uniform standard price for fuel nationwide and lowering industry gas price.
ESDM Minister issued one price for fuel regulation
Agreeing with Arcandra (Deputy ESDM Minister), soon Jonan will issue industry gas price regulation.
The latter has been in discussion for quite some time which has negatively impacted investors’ sentiment on Perusahaan Gas Negara ($PGAS) as overhang remains.  PGAS share price has dropped 27% since Aug16 - at this level one could be tempted to argue that downside from uncertainties have mostly been priced in.

Furthermore, what the government has provided so far in terms of regulatory clarity on gas pricing, in theory has neutral impact on PGAS.  The new regulation will set the price for downstream at below US$6/mmbtu for three main sectors: petrochemical, steel, and fertilizer.  But this is only be applied to upstream suppliers which directly supplying to these downstream customers. Therefore, PGAS may be spared on pricing but of course it would lose out on volume here.
To be fair, business has been tough for PGAS regardless of regulatory risk.  For one, distribution ASP has been weak.  Recent re-pricing for PLN for gas supply to Muara Tawar also contributed to the drop.  At the same time, upstream gas prices have increased.
Additionally, the ability to pass through the higher gas prices may be limited. Industries would have found it difficult to pass through price increases as the economy slowed - spreads fell as a result.
As such, Abdul lowers his volume growth forecasts, considering near zero growth in volume this year.  He also assumes the spread to remain stable at the 3Q level.
Whilst much of the above dynamics/developments may have been priced into the stock, one big uncertain outcome is the potential M&A with Pertagas.
Abdul’s forecast assumes that Saka remains with PGAS but does price in Pertagas. Recall that the government plans to merge Pertamina, Pertagas and PGAS in a SOE holding structure.
Initially, the gov’t was aiming to complete the process of creating all SOE holdings by end of year but with just a few days left in Nov16, there have been no new updates on proposed merger.
Gov’t proposed structure on Pertamina-PGAS-Pertagas merger
Abdul has been insightful in analyzing possible scenarios of how the deal could go through. Please see below for his detailed analysis.
So what would it take for us to be bullish on PGAS?
Abdul highlights a possible trigger is pickup in volume. This can come from the distribution network that PGAS is building.  With an additional network, PGAS will be able to connect with more clients that could switch to gas.
However, the target for completion is 2019.  So in the near term, an increase in volume can only come from clients within the existing or newly built network.  We expect the network size to grow 7-9% each year.
From earnings sensitivity perspective PGAS is much more levered to price than volume.  For example if volume grows 15% next year, the impact to NPAT is only 14%.  Another reason why bottom line impact from the network build-up is unlikely near term.
As such, Abdul reiterates his SELL recommendation on PGAS with TP of Rp2,400.

Nov 17,2016 13:57:04

PGAS: Production at Saka's Fasken block exceeds target

PT Saka Energi Indonesia, a subsidiary of IDX-listed gas distribution firm Perusahaan Gas Negara ($PGAS), reported that the Fasken area Eagle Ford shale properties in Texas, the US, currently has an average production rate of 190 mmscfd of shale gas, which is above this year’s target (160- 190 mmscfd). (Petromindo)

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).


Jul 27,2016 08:50:25
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)

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)


Sep 13, 2016
$SMCB (Holcim Indonesia)

Jun 07,2016 12:28:50
Pemerintahan Jokowi Tekan Harga Gas, Bagaimana Nasib Saham PGAS? - Pemerintah akhirnya memutuskan akan menurunkan harga jual gas untuk industri, sebagai bagian dari upaya pemerintah menurunkan biaya produksi bagi pelaku usaha nasional. Melalui Peraturan Presiden No. 40/2016, Presiden Joko Widodo memberikan mandat kepada Kementerian ESDM untuk mengatur harga di tujuh sektor industri utama dengan harga gas yang melampaui US$6 per MMBTU.

Di satu sisi, kebijakan pemerintah ini akan berdampak positif bagi para pengusaha yang menggunakan gas sebagai salah satu bahan bakar utama. Namun, di sisi lain, kebijakan tersebut niscaya akan menciptakan sentimen negatif bagi distributor gas nasional PT Perusahaan Gas Negara Tbk (PGAS), yang sahamnya tercatat di Bursa Efek Indonesia. Marjin laba perusahaan tanpa ampun bakal terpenggal.

Pada penutupan perdagangan Selasa kemarin, 6 Juni 2016, harga saham PGAS tinggal Rp2.520. Ini level setelah amblas hingga 58 persen jika dibandingkan harga pada awal tahun 2015 sebesar Rp5.975.

Riset Citi Group menilai pemangkasan harga gas sebesar US$1 per Mmbtu bisa memotong marjin EBITDA sebesar 18 persen dan laba sebelum pajak sebesar 20 persen. "Dampak dari pemangkasan tarif akan besar, menurut kami," demikian tertulis dalam laporan riset Citi yang sudah dibagikan kepada nasabah.

Salah satu langkah pemangkasan paling besar dilakukan di Medan, Sumatera Utara--wilayah dengan harga jual gas tertinggi di Indonesia. PGAS sudah sepakat untuk memangkas harga gas sekitar U$1,4 per Mmbtu di Medan dan akan mengambil langkah serupa untuk lokasi lain di Jawa.

Senada dengan Citi, laporan riset Maybank-Kim Eng bahkan merekomendasikan "jual" untuk saham PGAS dengan target harga Rp1.700 dalam 12 bulan. "Bila pemerintah meneruskan pemangkasan harga di Jawa, hal ini bisa semakin besar menekan marjin PGAS. Menurut kami, intervensi pemerintah tidak dapat dihindari. Hal ini bisa mempengaruhi harga kontrak baru. Kontrak lama juga tidak 100% aman," demikian dinyatakan laporan riset itu.

Meskipun demikian, PGAS masih diuntungkan dengan skema bisnis di industri penyaluran gas yang saat ini semi-monopoli. PGAS mendominasi 95 persen pangsa pasar distribusi gas nasional. Untuk bisnis transmisi, PGAS menguasai 55 persen pangsa pasar nasional.

Analis Syailendra, Alvin Kusuma, menjelaskan PGAS sebenarnya memiliki valuasi dengan fondasi yang cukup kuat, terlepas dari campur tangan pemerintah. Maka, meskipun ada pengaturan harga yang akan membuat marjin PGAS tidak setebal dulu, pemerintah diyakininya tidak akan sampai membuat PGAS merugi.

"Demand gas selalu ada, dan PGAS adalah pemain besar di industri. Saham ini sudah turun cukup dalam semenjak rencana pemerintah menurunkan harga gas. Pada titik tertentu, saham PGAS memang layak dikoleksi karena memiliki value yang nyata  terlepas dari campur tangan pemerintah," ujarnya kepada Bareksa.

Di samping tekanan dari sisi harga gas, isu merger PGAS dengan Pertagas juga bisa turut memunculkan sentimen negatif. Pertagas adalah anak usaha Pertamina yang nilainya lebih kecil dibandingkan PGAS. "Pertagas ini bukan perusahaan publik dan ada kemungkinan kinerjanya lebih jelek dibandingkan dengan PGAS. Oleh sebab itu, isu merger PGAS dengan Pertagas ini membuat investor tidak suka sehingga banyak yang melepas sahamnya di pasar," kata Alvin.


Jun 06,2016 11:44:57
Perusahaan Gas Negara ($PGAS): Implications from PERTAMINA's Annual Report

The 2015 annual report (AR) of PERTAMINA, Indonesia's largest energy SOE,
highlighted limited competition intensity for PGAS as it increases focus on
growing its downstream oil business and upstream M&A. The AR is important for
PGAS, considering news flow regarding SOE consolidation. It also helps
benchmark PGAS to its competition, PERTAGAS. While we await further clarity
from PERTAGAS's AR, disclosures from PERTAMINA highlighted that PERTAGAS
faced similar challenges as PGAS in 2015. We think fundamentals for PGAS are
recovering, with gas volumes up and 2015 challenges turning into opportunities.
We view consolidation as positive if executed on an arm's-length basis. Maintain

PERTAMINA: Despite a 45% decline in capex, oil production rose 3% YoY, while
gas sales rose 18%. Downstream capex fell 20% with pipeline capex falling an
estimated 40%. Net debt fell 20%, with net debt/equity falling to 0.45x from
0.59x. Given PERTAMINA's declining leverage, we think this lowers the risk of
overpayment by PGAS in the event of any acquisition of PERTAGAS.

PERTAGAS - a challenging year: Contrary to popular perception that PERTAGAS
was taking market share from PGAS, we found limited evidence to back this. Gas
volumes were down 9%, compared to a decline of 7% for PGAS in 2015.
Consequently, PERTAGAS's reported profits fell 21% as it faced challenges of
weak gas demand from a weak domestic economy, similar to what we saw with
PGAS. More importantly, PERTAGAS's margins, which have been a concern for
investors due to possible regulatory intervention, remained flat (like PGAS), on
our estimates. ROA for PERTAGAS was at 8%, vs. 7% for PGAS in 2015.
PGAS added ~2.7x more pipes than PERTAGAS in 2015, with PERTAGAS's
expansion primarily focused on North Sumatra, an area where PGAS has limited
presence. PERTAGAS expects to add ~400km of pipelines to connect Gresik
(East) with Semarang (West) in 2016.

Growth Plans for PERTAMINA: Growth plans are especially important given the
concerns of PGAS possibly overpaying if it were to acquire PERTAGAS. The AR
also highlighted a focus on expanding PERTAMINA's refining capacity and
expanding its upstream assets through M&A and organically. In a Bloomberg
interview (May 15, 2016), PERTAMINA's CEO commented that a consolidation of
PGAS's accounts would give PERTAMINA US$2bn/annum in additional
investment capabilities.

Jun 04,2016 18:42:32
Perusahaan Gas Negara ($PGAS),Site Visit To FSRU Lampung

We recently visited PGN’s floating storage regasification unit (FSRU) Lampung – a massive vessel with the length of three football fields and is connected to PGN’s existing gas distribution network through a subsea pipeline. Subject to sufficiency of receiving terminals, the FSRU is mobile and transferable to other locations within Indonesian waters. Our question and answer session with PGN’s staff is useful and provides additional insight into its operations and financial position.


May 30,2016 13:56:26
Perusahaan Gas Negara ($PGAS): Low On Gas

Refuelling urgency
We initiate coverage of PGAS with a SELL and DCF TP of IDR1,900 (WACC 8.58%, LTG 3%), implying 8.1x FY17E P/E. This is a 46% discount to its 5- year P/E mean of 15.1x. We see de-rating catalysts from: 1) a weak volume recovery expected in 2016; 2) upstream diversification and supply risks; and 3) regulatory uncertainties.

Market sees volume recovery, not us
PGAS’ gas volume was down 7.3% YoY in 2015. This was in part caused by slower industrial demand as the economy slowed from 5.0% growth in 2014 to 4.79% in 2015 and in part, by lower gas usage by PGAS’ main customer. We believe gas is slowly losing its price advantage after oil prices declined and that PLN may be tilted towards building more coalfired than gas-fired power plants. Still-sluggish industrial demand and the development of more coal power plants are behind our paltry forecasts of 1-3% YoY growth for PGAS’ sales volume for 2016-18.

Supply risks; untimely diversification
PGAS’ contracts with Santos, Pertamina and Conoco-Philips - its main gas suppliers - will end in 2017, 2019, and 2023 respectively, at a time when these operators’ concessions for their oil and gas blocks expire. It remains unclear whether these concessions would be extended. To secure higher future supply, PGAS ventured into the upstream gas sector in 2013-14 and LNG business in 2010. As exploration to exploitation takes years, revenue accretion has been limited so far. We also think that PGAS paid undeserved premiums for its oil & gas blocks, as oil prices soon collapsed and Indonesia’s economy slowed down.

Regulatory overhang
Pressure from industrial users prompted the government to cut gas selling prices in North Sumatera by USD1.64/Mmbtu at end-2015. This may be followed by more price cuts in Java – a risk we do not rule out.

May 24,2016 12:33:50
Perusahaan Gas Negara : Margins Intact Despite Industrial Gas Price Cut
After the Indonesian Government decided to cut industrial gas prices we spoke to PGN's management. We believe the company’s margins would remain intact, as costs would be borne by the Government. Premised on the several positive facts mentioned below, we reiterate our BUY call, with a DCF-derived TP of IDR3,500 (57% upside).
1.  A lower ASP for PGN may stimulate demand and improve its gas distribution volume;
2.  The stock is now trading at close to -2SD from its 5-year P/E band;  
3.  Its fundamentals are improving due to the recovery in oil prices.

¨        The Government will cap the cost of upstream gas that is sold by oil and gas contractors, at USD6/million British thermal unit (mmbtu). For existing gas fields that incur higher gas costs than USD6/mmbtu, the Government will lower end-user industrial gas prices for the supply from these fields – or any field that is incurring costs that are deemed as uneconomical.

¨        No impact to Perusahaan Gas Negara’s (PGN) margins as the Government will bear the cost. The Government’s way to cut the prices of industrial gas for end-users would be to limit the cost of supplying gas (of upstream producers) to distributors. As such, these distributors would be required to lower their selling prices by the same amount that is cut. The interests of oil and gas contractors would not be affected, since the Government would give them a higher share of production to offset the lower supply cost. As many as 31 production-sharing contracts will be revised in the near term.

¨        Price cut to benefit select players only. Potential beneficiaries of lower industrial gas prices would be companies operating in the fertiliser, petrochemicals, oleochemicals, steel, ceramic, glass and rubber glove industries. This, however, is subject to recommendations from the Ministry of Industry and the price points of gas supplied.

¨        Concerns on distribution margins still loom. The Ministry of Energy and Mineral Resources is expected to issue new policies to determine the gas transmission tariff and gas distribution margin of distributors.

¨        Fear of uncertainty now affecting the stock. PGN’s share price has declined by approximately 20% after news reports suggested that it may be directed by the Government to acquire Pertagas and, ultimately, become a subsidiary of Pertamina. Some market participants are expecting a rights issue, and PGN’s distribution margin might be diluted after such a merger, if it happens.

¨        Merger might be positive and fundamentals are improving, reiterate BUY. We think that a merger with Pertamina may be a positive. We also lift our FY16F earnings to reflect the impact of higher Brent prices – although this has not been priced in by the market yet, in our opinion. A downside risk would be the announcement of an unfavourable policy in the coming months. (Norman Choong, CFA)


May 24,2016 11:28:40
Perusahaan Gas Negara: More Upside than Downside
Minimum earnings downside risk and valuation at cheapest; BUY
We upgrade PGAS to BUY (from NEUTRAL) and maintain our DCF/terminal EV/IC based TP of IDR2,650. Our BUY call is premised on 1.) cheap P/E valuation (cheapest since 3Q11 issue on major gas purchase price hike), 2.) Earnings downside risk has bottomed, 3.) Earnings upside risk on oil price increase. Post-earnings revision, PGAS is trading at 9.6x/9.0x 2016-17 P/E, –65% discount to 5-years historical forward P/E.
PGAS share price has been treated as an oil price play since 2013. Then why correlation has been reversing since Apr’ 16?

Ever since PGAS injected upstream O&G assets to its business since early 2013, its elevated business profile risk has made its share price becoming more attached to volatile spot movements in Brent oil price (figure 4). Yet, since 4 Apr’ 16 share price showed a reversible trend vs oil price (oil price up while PGAS price down). Arguing the reversible downward-trend in share price is caused by 1.) Negative potential outcome on Pertamina-PGAS synergy, 2.) Governance issues (eg; CEO accused of corruption case), seems to be more of sentiment driven rather than fundamental driven as usually historical share price re-tracts to slowly to normalized level as news flow sentiments fades out. In fact, there is slight earnings upside on higher oil price which would make PGAS’ upstream O&G spot business (8-9% of revenue) more profitable. 

Pepres no. 40 implies ~35% of PGAS distribution is affected
Perpres no. 40/2016 has not given full clarity yet on how will it impact PGAS earnings going forward. We are now waiting for the Ministerial decree on gas price cut in the next 1-2 weeks which will give further details. Our conclusion from Perpres No. 40 regarding gas price cut is that gas price cuts may only affect roughly ~35% of PGAS’ distribution volumes (apply to specific industry users and excludes power plants) which exceeds USD6/mmbtu. Yet, the govt must still consider gas supply adjacent to the surrounding industry users and price level deemed economical for the respective gas users. Hence we think further bureaucracy considerations are all in the loop before finalizing gas price cuts.

Higher upside risk than downside risk on gas price cut
Upside risk - Should negative sentiment fade away and overhanging risk on gas price cut is over, PGAS 2016-17 P/Es may re-tract by +53%/+63% to its 5-years historical forward P/E.  
Downside risk - Our sensitivity analysis suggests a USD1/mmbtu gas spread cut in 2016-17 gas price would cut 2016-17 earnings by –48%/-46% respectively, translating to 18.1x/16.5x 2016-17 P/E. This implies -19%/-11% downside risk to 5-years historical forward P/E.

May 19,2016 23:38:19
Decree on Industrial Gas Price Cut
The presidential decree for Indonesia Industrial gas price cut is out.
Summary as below:
¨ Government will cap Indonesian upstream gas supply cost that are sold by oil and gas contractor at USD6/MMBtu, for existing gas field that has higher gas cost than USD6/MMBtu, government will lower the end user industrial gas price for these fields.
¨ Method to lower end user industrial gas price is via cutting the gas supply cost from upstream to gas distributor, and gas distributors (PGAS IJ, RAJA IJ) are mandated to lower their selling price by the same amount. The interest of oil and gas contractor is not affected because government will give them a higher share of production to offset the lower supply cost.
¨ Potential beneficiary of lower industrial gas price will be companies operating in fertilizer, petrochemical, oleo chemical, steel, ceramic (ARNA IJ), glasses, and rubber glove sectors. This is subject to recommendation from the ministry of industrialization.
¨ There will be issuance of another decree that determine the gas transmission tariff and gas distribution margin of gas distributors, to be set by ministry of energy.
¨ We have spoken to PGAS's ($PGAS) management for clarification of their distribution margin, it is safe at this juncture because distributors will just pass on the lower gas cost to their customers, lower ASP also helps to stimulate demand, so PGAS and RAJA margin intact but potentially higher gas distribution volume.
¨ For the determination of transmission and distribution margin that is not set is this decree, PGAS remains firm that a dollar margin of at least USD3.0/MMBtu is required for further investment and development of gas pipeline in Indonesia. Furthermore, government has recently approved the transmission tariff of USD2.4 for its new Kalija project.
¨ On a separate note, during our meeting with Sudirman Said, Indonesia minister of energy, about 6 months ago, he did enlighten us to not worry about PGAS's margin because the price reduction will be coming from upstream, as stated in this presidential decree.


May 17,2016 13:18:42
PGAS holds off acquisition plans – PT Perusahaan Gas Negara (PGAS) is holding off its plans to acquire oil & gas blocks this year and decided to focus on production development. President Director Hendi Prio Santoso stated that the company’s subsidiary, PT Saka Energi, will focus on developing existing blocks to commence production. On a separate note, PGAS’s FSRU Lampung, operated by PGN LNG, will receive another LNG cargo next week from Tangguh, Papua. This will be the 3rd cargo from a total of 8 cargoes that FSRU Lampung will receive this year.

May 13,2016 09:24:33

Angkasa Pura, PGN, dan Wika Ekspansi PLTG Rp 3 Triliun

Investor Daily memberitakan PT Angkasa Pura (AP) II bersama PT Perusahaan Gas Negara Tbk (PGN/PGAS) dan PT Wijaya Karya Tbk (WIKA) membentuk perusahaan patungan (joint venture/JV) dalam rangka ekspansi pembangkit listrik tenaga gas (PLTG) berkapasitas hingga 150 megawatt (MW). Nilai investasi PLTG yang berlokasi di Bandara Soekarno-Hatta tersebut diperkirakan mencapai Rp 3 triliun.

Direktur Utama AP II Budi Karya Sumadi mengatakan, tahap pertama, perseroan akan membangun PLTG dengan kapasitas 60MWsenilai Rp 1 triliun. Dalam JV tersebut, perseroan menguasai 51% saham, sedangkan sisanya PGN dan Wika.

“Kami finalisasi detail engineering design (DED) selama tiga bulan ke depan, setelah itu baru mulai konstruksi dan pengerjaannya selama satu tahun,” jelas Budi, usai penandatanganan kerja sama di Jakarta, Rabu (11/5).

Menurut Budi, PLTG perlu dibangun guna memenuhi kebutuhan listrik bandara Soekarno-Hatta. Kecukupan pasokan listrik merupakan salah satu faktor penting ketepatan jadwal penerbangan. Adapun PGN akan memasok gas alam sebanyak 14 juta kaki kubik per hari ke PLTG tersebut.


May 13,2016 09:20:17

Pertamina Segera Kuasai Saham PGAS

Harian Kontan memberitakan Kementerian Badan Usaha Milik Negara (BUMN) diam-diam sudah merampungkan rancangan peraturan pemerintah (RPP) tentang induk usaha (holding) perusahaan di sektor energi. Beleid ini bahkan akan segera diteken oleh Presiden Joko Widodo dalam waktu dekat.

Deputi Bidang Restrukturisasi dan Pengembangan Usaha Kementerian BUMN Aloysius Kiik Ro mengaku belum bisa memastikan kapan RPP ini terbit. "Saat ini sudah sampai ke Sekretariat Negara," ungkap dia singkat kepada KONTAN, Rabu (11/5).

Yang pasti, dalam beleid tersebut, pemerintah akan memberi penambahan penyertaan modal pemerintah (PNM) ke Pertamina berupa pengalihan 13,8 miliar saham Seri B milik negara di PT Perusahaan Gas Negara Tbk, setara kepemilikan 56,96%. Dus, dengan kepemilikan saham segede itu, Pertamina kelak akan menjadi pemegang saham mayoritas di PGN.

Direktur Utama PGN Hendi Prio Santoso berharap, apapun bentuk PGN kelak tetap akan memberi hasil positif bagi semua pemangku kepentingan. Apalagi, kata Hendi, Kementerian BUMN, Pertamina dan PGN sudah menggelar rapat untuk membahas masalah ini, Rabu (11/5).


May 09,2016 17:15:33
PGAS to connect gas pipeline to 21k household in Tarakan, North Kalimantan in 2016. Currently, there are 3,366 households in Tarakan who have gas connection from PGAS. PGAS director Dilo Seno said that the project worth Rp225bn (US$17m).


May 03,2016 08:14:55


1.1.MEDC : Medco Tingkatkan Saham di Blok APT Medco Energi Internasional Tbk menaikkan sahamnya menjadi 58,33 persen di lapangan gas Blok A di Kabupaten Aceh Timur, Aceh, melalui akuisisi saham Japex di Blok A 16,66 persen. (KOMPAS)

1.2.Suplai dan Penyerapan Minyak Mentah Global Mulai Stabil 2017. (TEMPO)

1.3.PGN Bangun 24 Ribu Jargas di Surabaya Senilai Rp285,2 Miliar. (TEMPO)

1.4.ELSA : PT Elnusa Tbk bakal bekerjasama dengan Chevron dan PT Pertamina untuk mengembangkan pembangkit listrik tenaga flare gas. Nantinya, kedua perusahaan tersebut akan menyediakan flare gas dan perseroan menjadi operator pembangkit listriknya. (TENDER INDONESIA)


2.1.Sejalan dengan perkiraan Bank Indonesia, Indeks Harga Konsumen (IHK) pada April 2016 mencatat deflasi sebesar 0,45% (mtm). Deflasi IHK terutama disumbang oleh deflasi komponen barang yang diatur Pemerintah (administered prices) dan komponen bahan makanan bergejolak (volatile foods). Dengan perkembangan tersebut, inflasi IHK secara tahunan (yoy) mencapai 3,60% (yoy) serta berada dalam kisaran sasaran inflasi Bank Indonesia, yaitu sebesar 4%±1% (yoy).


2.1.LPCK : PT Lippo Cikarang Tbk. segera meluncurkan menara apartemen keenam yakni Newport Park di proyek andalannya Orange County. (TENDER INDONESIA)


4.1.XL Kaji Perluas Kerjasama dengan MNC Grup di Pasar Broadband. (INDO TELKO)

4.2.BMTR : PT Global Mediacom Tbk. akan mengeluarkan maksimal 2% saham perseroan untuk program EMSOP (maksimal 283,97 juta saham perseroan). Dividen tunai final sebesar Rp5 per saham. (BISNIS INDONESIA)

4.3.MNCN : PT Media Nusantara Citra Tbk. akan mengeluarkan maksimal 2% saham perseroan untuk program EMSOP (maksimal 283,97 juta saham perseroan). Dividen tunai final sebesar Rp42 per saham atas tahun buku 2015. (BISNIS INDONESIA)


Target Harga Terendah 594
Target Harga Tertinggi  667





Apr 25,2016 09:04:34
Rencana membentuk holding BUMN sektor energi mulai terang. Kabar paling anyar, Kementerian BUMN menyebut mekanisme Holding adalah pemerintah akan menyerahkan saham di PT Perusahaan Gas Negara Tbk kepada Pertamina. Untuk skr ini, masih menunggu aturan tata cara pembentukan holding.

Apr 17,2016 23:00:16
Perusahaan Gas Negara - Inflection Point Is Near
We believe PGN’s earnings contraction would bottom this year, driven by new project contribution, lesser impairment and a mild volume recovery. Further, we see upside next year, with the economy and crude oil prices set to head north, lifting the company’s distribution volume and margins. Upon fine-tuning our forecasts, we upgrade PGN to BUY (from Neutral) for its undemanding valuation, with a higher DCF-based TP of IDR3,500 (from IDR3,200, 28% upside), implying FY16-17F P/Es of 15.0-12.0x.

¨ Lower impairment on its E&P assets. Based on its latest financial statement, Perusahaan Gas Negara (PGN) conducted an impairment test based on Brent crude oil prices of USD53.80-75.20/barrel (bbl) for the next five years, higher than the current crude oil price of below USD40/bbl. Barring any upside surprise to oil prices, impairment loss will likely surface again, although the projected amount would be lower than FY15 levels.

¨ Kalija to save the day. PGN has completed Phase 1 of Trans Kalimantan-Java pipeline (Kalija) that connects the Kepodang block to the Tambak Lorok power plant in Semarang. Contribution from this project would be significant, and Kalija’s tariffs are higher than PGN’s existing transmission pipe. Last we checked with management, PGN is transmitting 100 million standard cubic feet per day (mmscfd) of natural gas for this project.

¨ Distribution margin likely to improve in FY17F. For FY16F, we assume distribution spread of USD3.10/million British thermal units (mmbtu), lower than FY15’s USD3.34/mmbtu. This is due to PGN’s reluctance to increase its ASP amidst the heat of the gas price cut talk, and the likelihood of repricing for some of its gas supplies that expired in 4Q15. However, with expectations of a stronger GDP growth and recovery in crude oil prices, distribution margin will likely improve in FY17F, driven by an ASP hike and the reappearance of surcharges when volume recovers.

¨ 4Q15 result in line. FY15 net profit (-43.6% YoY, +21.9% QoQ) reached 95.4% of our estimate, with the quarter seeing a recovery in both gas distribution volume and distribution margin spread. PGN incurred a high impairment loss in its exploration and production (E&P) assets but bottomline was cushioned by lower taxes due to the amortisation of its unrecovered cost in oil exploration.

¨ Pending evidence of volume recovery. Although there are several media reports on higher electricity consumption, PGN’s indicative distribution volume for 1Q16 was identical to 1Q15 levels at around 800mmscfd. Based on the preliminary data that we gathered, we have witnessed higher natural gas consumption from power, cement and ceramic sectors.

¨ Key risk remains gas price intervention. Changes in the gas price cut blueprint that may directly impact PGN’s margins remain the key risk to our BUY call. Other risks are another correction of Brent crude oil prices and a deceleration of Indonesia’s economic growth.
Apr 08,2016 08:54:35
Perusahaan Gas Negara (PGAS): Climate change
- Improving economy to drive... : This stage of Indonesia’s economic cycle, is picking up steam and should result in an improved change for PGAS’ operating environment. Point in case would be Markit’s report of a higher March Purchasing Managers’ Index (PMI) to 50.6 (February: 48.7), reflecting economic expansion for the first time since September 2014. Reports of Indonesian manufacturing companies increasing raw materials purchases in March and the state-owned electricity company PLN booking sales volume growth of 8.9% y-y in 2M16 suggest rising business activities, which should translate to higher distribution volumes for PGAS this year.

- ... 8% y-y growth in 2016 distribution volumes, ... : Based on historical data (exhibit 4) with the exception of 4Q14, PGAS’s distribution volumes would typically move in tandem with Indonesia’s PMI as about 97% of PGAS’ clients are industries and power plants. Thus, as the primary Indonesian gas distributor, with 83% share of the national gas pipeline, we expect PGAS’ 2016 distribution sales volumes to improve 8% y-y to 867 mmscfd, reaching 62% utilization of PGAS’ total capacity of 1,300mmscfd on 825km additional gas pipeline and contracts with Nestle’s Indonesia plants in Lampung (+100km) and Tambak Lorok (>200km). In 2017, with additional 110km of new pipelines, we expect PGAS’ sales volumes to grow 9% y-y to 942mmscfd, also reflecting 62% utilization rate.

- ... supported by higher domestic gas distribution: The Energy and Mineral Resources Ministry estimates Indonesia’s 2016 local gas distribution to rise 8% y-y to 4,144 bbtu/d with the additional gas in accordance with the government’s efforts to support gas power plants as the main energy source. In addition, Tangguh LNG has committed to delivering 1.1m m3 LNG (equivalent to 61bcf) to PGAS’ Floating Storage Regasification Unit (FSRU) in Lampung while Saka Energy, PGAS’ subsidiary, plans to acquire an interest in Block B (South Natuna: 117mmscfd) and add to its current share of 8.9% in the Southeast Sumatra block (55mmscfd), raising PGAS’ supply.     

Outlook: Different approach to gas-selling price scheme
Previously, we had expected gas-selling prices to decline by 5% y-y to USD8.8/mmbtu, diminishing PGAS’s distribution margin from USD3.4/mmbtu to USD3.0/mmbtu. For now, we lower our gas-pricing assumption by 20% on a reduced gas-purchase price to USD3.8/mmbtu, but maintain our margin assumption of USD3.5/mmbtu and expect long-term price increases of 3% in both supply and selling volume. This is in line with the government’s plan to reduce its gas take up while maintaining its operator stake.

Recommendation: Upgrade to BUY and raise TP to IDR3,200
To reflect our new gas-pricing scheme, we cut our 2016 net profit by 3% to USD420m, but raise 2017F earnings by 7% on higher domestic gas allocation. On valuation, we increase our DCF-based (15% WACC) 12-month TP from IDR2,500 to IDR3,200. With 15% upside potential to our new TP, we upgrade PGAS from Reduce to BUY as we see the improved medium-term outlook and industrial gas demand dovetailing Indonesia’s economic improvement. That said, we expect PGAS’ 4% ytd market outperformance (exhibit 5) to persist.
Feb 09,2016 11:03:32
Arwana Citramulia : More Clarity On Gas Price Cuts

The recent industrial gas price reductions in North Sumatra have provided more clarity on gas price cuts in other areas. Since almost all Indonesian ceramic tile producers – except Arwana – booked 3Q15 operating losses, gas price cuts are very crucial to help lift the ceramic industry out of financial difficulties. Assuming Arwana’s gas price cut could happen in 2017 at USD1/mmbtu, we raise FY17F earnings to IDR318bn (+17.6%) but kept our FY16F numbers. Maintain BUY with a higher IDR690 TP (24% upside) now based on DCF (from targeted P/E).

¨ More clarity on gas price reductions. Media reported that Perusahaan Gas Negara ($PGAS) and PT Pertamina Gas have collaborated to reduce industrial gas prices in the North Sumatra region while awaiting a presidential decree on lower gas prices. The recent industrial gas price reductions in North Sumatra have provided more clarity on gas price cuts in other distribution areas. We see that gas prices in other distribution areas – such as West Java, East Java and South Sumatra where Arwana Citramulia’s ($ARNA) plants are located – are likely to decline in the near term.

¨ Rising gas prices deal a heavy blow to earnings. 3Q15 was the worst quarter in which almost all Indonesian ceramic tile producers – except Arwana – booked operating losses. Industrial gas price jumped to ~USD10/million British thermal units (mmbtu) in FY15F from USD6.62/mmbtu in FY10. In the same period, Arwana’s energy cost doubled to IDR10,700/sq m (from IDR5,400/sq m). Gas price cuts are significant to Indonesian ceramic companies since gas prices contributed around 30-35% of cost of goods sold (COGS). Hence, lower industrial gas prices are very crucial to help lift the companies out of financial difficulties.

¨ Lifting FY17F earnings. The timeline and amount of gas price cut for Arwana’s plants are still unclear. However, based on our checks, Directorate General of Oil & Gas has confirmed that the ceramic and glass industry would have gas price reductions in the range of USD1-2/mmbtu. Assuming industrial gas price decline by USD1/mmbtu, we project that Arwana’s energy cost should decline to IDR9,200/sq m (-12.4%). To be conservative, we estimate that Arwana’s gas price cut could happen in 2017 at USD1/mmbtu. Hence, we increase our FY17F earnings to IDR318bn (+17.6%) but maintain our FY16F numbers.

¨ Maintain BUY with a higher TP. We have changed our valuation methodology to DCF (from targeted P/E base) as DCF is able to better capture Arwana’s long-term earnings post the potential gas price cut in 2017. Based on our DCF calculation (WACC: 9.8%, TG: 2%), we raise Arwana’s TP to IDR690 (from IDR475), which offers a 24% potential upside and implies 24x/16x FY16F/FY17F P/Es. We reiterate BUY on the counter. Key risk is a weakened IDR which should increase Arwana's production cost as around 50% of its cost is in USD, while its revenue is in IDR.
Feb 05,2016 10:41:00
$PGAS Masih bertahan di Strong Support

Jan 26,2016 11:09:21
Support terus di $PGAS
Jan 26,2016 11:07:35
$PGAS Strong Support

Jan 26,2016 10:47:27
$PGAS Strong Support

Sep 08,2015 10:40:26
HANYA WAKTU $PGAS TURUN DI BAWAH 1,800. Apakah ini memungkinkan?

Cara pemerintah saat ini sangat merugikan pemegang saham minoritas! Apakah ini ilegal? Comments yah...

Jun 09,2015 15:59:30
PGAS Jual dulu. Tunggu di 4,000

May 31,2015 12:41:26
Indonesia Top 10 companies by market cap


May 05,2015 12:21:46
Support Kuat 3300 - 3600. Beli di Support Kuat. Atau beli sedikit sekarang. Target Jual pertama di 4500
Apr 23,2015 11:50:41
PGAS beli
Apr 23,2015 10:14:28
As soon as it touch the blue line it will be our BUYING SIGNAL
Apr 22,2015 22:59:04
PGAS: Industry groups continue discussion on lowering gas prices. Glass and ceramics manufacturers, who see gas a 35% of their cost base, continue to ask for lower gas prices amidst slowing demand for their products. They are expecting lower prices from 2016. Industry also wants take or pay clauses removed from their contracts. The Ministry of industry has supplied scenarios of lower gas prices by 8-32.6% which it argues would actually increase taxation by Rp12.9-51.9t and economic output by Rp72.4t to 289.7t. Comment: At an event CLSA held this week with the President’s office, we noted a reticence to directly intervene in prices, instead support for infrastructure owners earning reasonable rates of return. It’s not clear how to us lower gas prices would automatically lead to higher Gov’t revenues or output – the upstream industry is the major contributor to the state budget (the state earns 70% from gas production) and c. 18% from every dollar PGAS earns in dividends and taxes. Ironically diesel prices remain 45-50% higher than gas and distributers of that form of energy (far more prevalent than gas) are earning higher margins than PGAS right now, yet this is not being discussed in the media by industry groups.
Apr 15,2015 10:45:10
Support at 4200
Apr 15,2015 10:00:04
Ministry of Industrial Estate is urging the government to intervene and reduce gas price again, giving a few scenario that the additional tax revenue from industrial players will be more than enough to offset the reduction of government’s revenue from the gas industry. Industrial estate also complains that Perusahaan Gas Negara (PGAS) selling price of USD11/mmbtu to industrial is much more expensive than gas price is Singapore (USD4/mmbtu) and Malaysia (USD3/mmbtu). PGAS admitted it will be hard to reduce natural gas price as its gas supplies are tied by long term contracts and any negotiation will be difficult. Comments: We wish to highlight that natural gas in Malaysia and Singapore are subsidized by the governments whereas Indonesia is not, hence the disparity in natural gas price. PGAS does have a point that its gas supplies are tied to long term contracts so price reduction from upstream is quite unlikely. This leave us with three possible option, 1) government begin subsidizing natural gas price of Indonesia, 2) PGAS to reduce its selling price and bear the costs, 3) no reduction in natural gas price (industrial will still have to use natural gas as it is 40% cheaper than fuel oil).
Apr 15,2015 01:26:59
Saham turun terima dividen juga rugi. 4600 support kuat
Apr 13,2015 13:39:01
PGAS Keterangan: Setiap 1 (Satu) saham akan mendapatkan dividen tunai sebesar Rp.144,84 (Seratus Empat Puluh Empat Rupiah koma Delapan Empat)
Apr 10,2015 01:37:23
Quotes delayed, except where indicated otherwise.
1,845.00 5.00 (0.27%)
Perusahaan Gas Negara (Persero)
Last Update 02:54:11