BCAS Vista 09 Mar-20

Gov’t expedites imports of staple needs to stabilize prices

The government is expediting imports of buffalo, meat, garlic and sugar to stabilize prices in preparation for surge in demand during this year’s Ramadhan festivities that will start in late April amid the corona virus outbreak. Trade Ministry, Agus Suparmanto stated that the ministry had received a horticulture products import recommendation (RPIH) to import 90k tons of garlic, and would issue the import license for garlic in a matter of days. (Jakarta post)

INDUSTRY

Angkasa Pura (AP I): 2M20 opportunity loss reached around IDR208bn

AP I stated that during Jan-Feb 2020 around 12,703 fligths were cancelled from 15 airports due to corona virus. This translates to around IDR208bn financial opportunity loss. On another news, AP I also mentioned that the cancellation of 35 flights per day from China to Bali is estimated to cause a total of IDR48bn opportunity loss. Faik Fahmi, CEO of AP I, stated that the 35 flights per day accounts for around 6,800 passengers from China. (IQ Plus)

Aramco slashes crude pricing

Saudi Arabia kicked off and all out oil war on Saturday, slashing official pricing for its crude and making the deepest cuts in at least 20 years on its main grades, in a bid to push as many barrels into the market possible. Aramco’s pricing announcement is the first major marketing decision since producer talks in Vienna ended in dramatic failure on Friday. Saudi Production is set to exceed 10mn barrels a day next month and the increase would be amount to more than 3 percent of Saudi output in February. (Jakarta Post)

Adhi Karya (ADHI) booked IDR1.8tn new contract in 2M20

ADHI's 2M20 new contract reached IDR1.8tn, which accounted for 5.1% of the company's total FY20 new contract target. The largest contribution came from MRT phase II project of IDR1.4tn, while the remaining came from several building projects. (Bisnis Indonesia)

Comment: ADHI's 2M20 new contract translates to 7.8% of our FY20 projection of IDR23.1tn and 5.1% of Company's FY20 target of IDR35tn.

Summarecon Agung (SMRA) to sell luxury house in Bekasi

SMRA plans to launch another luxury house project in Summarecon Bekasi, following the success of Morizen, a luxury house project launched on Aug-19. Note that, Morizen offers 161 luxury housing units with the prices ranging from IDR3.3bn to IDR8bn. SMRA’s Executive Director, Albert Luhur, stated that the company has sold 52 units on Morizen project. (Kontan)

Comment: Bekasi area contributes to around 15% of total marketing sales

Surya Semesta Internusa (SSIA) to launch new industrial area

SSIA plans to launch a new industrial area in Subang on Jul-20. SSIA’s Investor Relations, Erlin Budiman, stated that the company will launch a 250ha area where 70% of it will be used for industrial area while the remaining will be used for housing area for the employees. In addition, The company offers the area with the price of USD100 per sqm, which is lower than the price on Karawang area at USD120 per sqm. Note that, the company targets to sell 20ha land in 2020, translating to 12.35% growth compared to the 2019 realization. For capex, the company allocates IDR600bn for 2020 which will be used to support the company focus on land acquisition in Subang. The company plans to acquire land up to 2,000ha in order to develop Subang City of Industry project. In another context, the company plans to divest 110ha land on Suryacipta Kerawang Phase IV with the target proceed of IDR325bn and target net profit of IDR100bn. (Bisnis Indonesia) 

Comment: Note that about 50% of land sales in 2020 has been confirmed in 2019, pending because of due diligence.

Tower Bersama Infrastructure (TBIG) to issue IDR1.5tn shelf registered bonds III phase IV

TBIG plans to issue IDR1.5tn shelf registered bonds III phase IV in two series. Series A has 370 days tenor with a value of IDR683bn and a coupon rate of 6.25%, whereas series B has 3 years tenor with a  value of IDR867bn and a coupon rate of 7.75%. The shelf registered bonds has received idAA- rating from Fitch Ratings, and will be offered on 18-19 March 2020. The proceeds will be used to pay a USD375mn loan facility under the name of PT Solu Sindo Kreasi Pratama, a subsidiary of TBIG. (Bisnis Indonesia)

Aviva to exit Indonesian market

Aviva, an insurance company from the UK, has recently announced their exit from Indonesian market, selling all their stakes in Asuransi Astra Aviva Life (Astra Life). Both Aviva and ASII has a 50% stakes on Astra Life. Aviva’s stakes will be sold to ASII, pending the approval by the regulator and the completion of BNLI’s acquisition by Bangkok Bank. No detail on the valuation as well as the amount of the transaction at this point of time. Please note that Astra Life booked 2019 premium revenue of IDR3.1tn (-11.8% YoY) and net loss of IDR77.4bn. (Investor Daily, Bisnis)

Bangkok Bank may not acquire another bank

Bangkok Bank’s President, Chartsiri Sophonpanich, affirmed that, in the meantime Bangkok Bank will not conduct another bank acquisition neither in Indonesia nor other countries. In addition, Bangkok Bank should integrate its Indonesia business units in order to comply with POJK 41/POJK.03/2019. (Kontan)

Starbucks expansion plans in Papua

Head of BKPM, Bahlil Lahadalia, stated that Starbucks Corporation plans to invest in Papua through coffee plantation, coffee shop outlets, and to promote exports of the commodity. The fund will be allocated starting Apr-20. Starbucks plans to open 2 outlets in Papua at Diana Mall, Timika and Jayapura Mall in Kota Papua in Aug-20. (Investor Daily, Tempo)