BCAS Vista 17 Mar-20

President requests Ministry of Finance (MoF) to shift IDR40tn of fund for consumption-related program

Joko Widodo requests rhe MoF to immediately shift IDR40tn of fund for programs that directly impact the consumption and purchasing power of the societies, especially for farmers, fishermen, laborers and the micro and small business players. (Bisnis Indonesia)

Feb-20 4W wholesale: ASII’s volume recovered.

•   Gaikindo recorded Feb-20 4W wholesale of 79.6k units (0.5% MoM; -2.6% YoY), translating to 2M20 sales of 159.6k units (-2.5% YoY). Feb-20 LCGC sales reached 16.1k units (-5.5% MoM; -6.4% YoY), bringing 2M20 LCGC sales to reach 33.2k units (-3% YoY).

•   Contrast to the industry, ASII manage to book Feb-20 sales of 43.1k units (+6.9% MoM; +3.2% YoY), bringing 2M20 to reach 83.2k units (-0.8% YoY). Toyota and Daihatsu manage to increase their sales MoM as we believe delivery were recovered following the Jakarta flood last month. Hence, we believe ASII’s sales volume should return to the negative growth territory next month, in our view.

•   Mitsubishi only managed to book 10.9k units sales (-11.3% MoM; -25.4% YoY) as we believe Xpander’s sales has reached its peak, bringing it down to the normal level. While Honda and Suzuki’s sales decline MoM but recovered YoY.

•   In terms of market share, ASII’s market share jumped to 54.1% as result of them bucking the trend. Meanwhile, all large manufacturers market share declined during Feb-20.

•   Entering March, we should see Suzuki’s volume to pick up as they recently launched XL7 within their LMPV segment. On the flip side, we expect domestic volumes to be slashed by 20% this year as the impact of COVID-19 to weaken sales over the upcoming months. Additionally, the cancelation/postponement of large auto events (GIIAS has announced their postponement) should support our weakening volume thesis this year.

Source: Gaikindo

State Assets Management Agency (LMAN) to fund IDR300bn for Semarang-Demak tollroad this year

LMAN plans to inject IDR300bn funding for the Semarang-Demak tollroad’s land acquisition this year. Pembangunan Perumahan’s (PTPP) CFO and Risk Management, Agus Purbianto, also mentioned that LMAN funding is also budgeted at IDR1tn for next year from the total IDR3tn standby facility. Note that, Semarang-Demak tollroad with total investment of IDR15.3tn is estimated to be fully operating in 2022. (Bisnis Indonesia)

Adex growth target to be revised to 8%

The Head of Indonesian Advertising Companies Association, Janoe Arijanto, stated the adex growth target has a high potential to be revised to 8% from initially at 10-12% due to Covid-19 issue. He also mentioned that the slowdown has been seen in 1Q20 from several companies delaying or cancelling their launches agenda. Note that according to Nielsen Indonesia, 2019 adex reached IDR181.3tn. (Bisnis Indonesia)

Comment: While this may not represent the overall FMCG Companies’ adex, this would represent the overall downtrend as the impact from the Covid-19.  Given the lower target, this might translate to a higher rate card discounts from media players. On the flip side, we might see a shift to FTA/digital ads given the slower below the line (events) budgets.

Mining companies to conduct buyback

PTBA, TINS and ANTM is planning to conduct buyback, allocating IDR300bn, IDR100bn, and IDR100bn, respectively. The buyback period will start from 17-Mar-20 until 16-Jun-20. (Investor Daily)

Semen Indonesia (SMGR) 4Q19 results: Above with ours and consensus estimate

Company booked higher-than-expected gross margin level of 31.5% in FY19 (vs. 30.0% of our expectation). Margin expansion was mainly attributable to ASP hike and favorable coal price. Our last call for company was HOLD at IDR12,000. In the long term, we view oversupply condition might continue longer-than-market -expectation due to slow demand as well as potential increasing number of cement production, especially from new players. On the other hand, the potential implementation of ODOL might be a significant pushback as well.

Source: Company, BCA Sekuritas

Chandra Asri (TPIA) FY19 result: below ours and consensus

• TPIA booked 4Q19 net loss of USD8mn, but still translating to FY19 net profit of USD23mn (-87.4% YoY), way below ours and consensus’.
• TPIA booked 4Q19 top line of USD493mn (+47.7% QoQ; -15.1% YoY), bringing FY19 revenue of USD1,8bn (-26.6% YoY), below ours and consensus’. Higher revenue in 4Q19 was mianly due to stronger Naptha price from average USD496/mt to USD516/mt on tighter supply from Middle east and India. However, weak performance in FY19 was mainly due to lower sales volume due to slower activities as a result of turnaround maintenance over August – Sep in FY19 and lower average sales prices, primarily for Ethylene and Polyethylene .
• Lower ASP was mainly due to falling oil price to USD59/bbl in 4Q19 from  3Q19 of USD62/bbl, as global economic remained sluggish with added uncertatinty from the US-China trade war
• Our last rating was FULLY VALUED with TP of IDR4,000

Source: Company, BCA Sekuritas

Ramayana Lestari Sentosa (RALS) allocates IDR250bn to conduct share buyback

RALS will allocate IDR250bn of fund to conduct a shares buyback, starting from 17 Mar-20 until 16 Jun-20. The company has appointed KIM ENG Securities to conduct the buyback. (IDX)

Summarecon Agung (SMRA) – 2M20 Result

• SMRA booked 2M20 marketing sales of IDR263.8bn (+15.1% YoY), translating to approximately 6% of the company's 2020 target
• Accumulating with 1M20's number, SMRA's marketing sales totals to IDR607.4bn (-11.4% YoY), translating to 13.5% of the company's 2020 target 
• All location produced a negative growth compared to 1M20, with the exception of Bekasi location due to the success of Morizen, a luxury house project launched on Aug-19
• Despite COVID-19 worsening, SMRA still remains optimistic and kept their marketing sales target as it is, IDR4.5tn (+12.5% YoY)
• Note that Bogor location have yet to start launching their clusters, which will constitute around 10% of total marketing sales (IDR430bn)

Source: Company, BCA Sekuritas

Waskita Karya (WSKT) received IDR6.2tn payment for Japek II Elevated

On 12-Mar-20, WSKT has received IDR6.2tn payment for the Jakarta-Cikampek II Elevated toll-road. Note that, the project is a JO between WSKT and Acset Indonusa with a total contract value of IDR13.5tn, with WSKT holding 51% of the portion. This year, WSKT expects cash inflow from the turnkey project payments of more than IDR10tn, which includes the recent Jakarta-Cikampek II Elevated project, LRT Palembang project (IDR2.7tn), Terbanggi Besar – Pematang Panggang – Kayu Agung project (IDR1.5tn), and other toll road projects. On the other hand, the Company also expects IDR18.7tn payment from projects with progress payment scheme this year and aims for IDR4.5tn fund repayment from State Assets Management Agency (LMAN). (Company)

Cashlez Worldwide Indonesia to IPO

Cashlez Worldwide Indonesia, a payment getaway company, plans to issue new shares of 300mn shares (20.3% from APIC) through IPO with price range of IDR298-358/share, totaling a potential proceed of IDR90-100bn. The Company’s CEO, Tee Teddy Setiawan, stated that 48.6% of the proceeds will be used to acquire a 51% ownership on another payment gateway company called Softorb Technology Indonesia (STI) while the rest are for working capital. Cashlez planned to be listed on the stock exchange on 20-Apr-20 and has appointed Sinarmas Sekuritas as the underwriter. (Investor Daily, Kontan)