Market Pulse August 15, 2019

Key Ideas

  • Government: Jokowi to carve out investment ministry in cabinet revamp

Stocks to Watch

  • BNLI IJ: OCBC is said to weigh bid for StanChart-Backed Indonesian Bank
  • BTPN IJ: Co 1H net income 1.26 Trln Rupiah, +15% y/y
  • GMFI IJ: Co & Lion Air sign $466M Batam MRO facilities
  • BBRI IJ: Co downgrades Duniatex loan rating category

 

Daily Chart Views

  • JCI Index – Fall: Potential to form Evening Star pattern, waiting for the next candle confirmation (R: 6,280 | S: 6,150)
  • BWPT– Buy on weakness: Potential correction supported by the forming of Tweezer Top pattern ( R:160 | S:133 – Entry:138-141)
  • APLN – Trading buy: Continue to rise supported by the forming of Long White candle pattern and increase in volume ( R:230 | S:194 – Entry:200-208)
  • ASII – Spec buy: Potential technical rebound supported by the forming of Matching Low pattern ( R:6,950 | S:6,400 – Entry:6,425-6,550)
  • MYOR – Trading buy: Continue to rise supported by the forming of White candle and increase in volume ( R:2,550| S:2,400 – Entry:2,420-2,440)
  • ELSA – Spec buy: Potential technical rebound supported by the forming of Bullish Harami pattern ( R:350 | S:316 – Entry:320-324)

 

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Market Pulse August 14, 2019

Key Ideas

  • Agri: Foreign exchange from the implementation of B20 is below the target

Stocks to Watch

  • LRNA IJ: Co to add fleet in the second half
  • LINK IJ: Co teams up with Astra Infra to strengthen infrastructure in Banten
  • FOOD IJ: Co eyes Rp 137 billion in sales this year
  • JSKY IJ: Co will conduct a stock split

 

Daily Chart Views

  • JCI Index – Slightly rise: Potential technical rebound as last closing price still above near term support (R: 6,250 | S: 6,175)
  • ASII – Spec buy: Potential technical rebound supported by the forming of Hammer pattern and increase in volume ( R:6,850 | S:6,400 – Entry:6,500-6,600)
  • UNTR – Spec buy: Potential technical rebound though forming Black candle pattern but decrease in volume ( R:22,600 | S:20,600 – Entry:20,900-21,000)
  • HMSP – Spec buy: Potential technical rebound supported by the forming of Tweezer Bottom pattern ( R:2,930 | S:2,770 – Entry:2,790-2,810)
  • UNVR – Buy on Weakness: Continue to fall supported by the forming of Bearish Belt Hold pattern and increase in volume ( R:45,050| S:43,200 – Entry:43,500-43,775)
  • AKRA – Spec buy: Potential technical rebound though forming Black candle pattern but decrease in volume ( R:3,890 | S:3,690 – Entry:3,710-3,730)

 

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Market Pulse August 13, 2019

Key Ideas

  • Economy: Bank Indonesia Says Ready to Intervene in Currency, Bond Markets
  • Agri: Indonesia Sees 4.63M Tons of Rice Surplus in Jan.-Sept

Stocks to Watch

  • GMFI IJ: Co implements strategies to improve cash flow
  • DAYA IJ: Co revenue hikes 84% di 1H19
  • HERO IJ: Co allocates Rp 500 billion for store revitalization
  • TOBA IJ: Co recorded US$ 230.7 million of sales in 1H 2019

 

Daily Chart Views

  • JCI Index – Slightly rise: Potential technical rebound though forming of Black candle but decrease in volume (R: 6,280 | S: 6,210)
  • WSBP – Spec buy: Potential technical rebound supported by the forming of Bullish Gravestone Doji pattern and increase in volume ( R:360 | S:332 – Entry:338-344)
  • SCMA – Spec buy: Potential technical rebound as last closing price still above near term support ( R:1,305 | S:1,200 – Entry:1,210-1,230)
  • UNTR – Buy on Weakness: Continue to fall supported by the forming of Black Marabozu pattern and increase in volume ( R:22,200 | S:21,250 – Entry:21,400-21,525)
  • CTRA – Buy on Weakness: Continue to fall supported by the forming of Bearish Belt Hold pattern and increase in volume ( R:1,245| S:1,110 – Entry:1,135-1,150)
  • JSMR – Trading buy: Continue to rise supported by the forming of Bullish Belt Hold pattern and increase in volume ( R:6,000 | S:5,600 – Entry:5,725-5,800)

 

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Market Pulse August 12, 2019

Key Ideas

  • Economy: Bank Indonesia Says Ready to Intervene in Currency, Bond Markets
  • Agri: Indonesia Sees 4.63M Tons of Rice Surplus in Jan.-Sept

Stocks to Watch

  • GMFI IJ: Co implements strategies to improve cash flow
  • DAYA IJ: Co revenue hikes 84% di 1H19
  • HERO IJ: Co allocates Rp 500 billion for store revitalization
  • TOBA IJ: Co recorded US$ 230.7 million of sales in 1H 2019

 

Daily Chart Views

  • JCI Index – Slightly rise: Potential technical rebound though forming of Black candle but decrease in volume (R: 6,280 | S: 6,210)
  • WSBP – Spec buy: Potential technical rebound supported by the forming of Bullish Gravestone Doji pattern and increase in volume ( R:360 | S:332 – Entry:338-344)
  • SCMA – Spec buy: Potential technical rebound as last closing price still above near term support ( R:1,305 | S:1,200 – Entry:1,210-1,230)
  • UNTR – Buy on Weakness: Continue to fall supported by the forming of Black Marabozu pattern and increase in volume ( R:22,200 | S:21,250 – Entry:21,400-21,525)
  • CTRA – Buy on Weakness: Continue to fall supported by the forming of Bearish Belt Hold pattern and increase in volume ( R:1,245| S:1,110 – Entry:1,135-1,150)
  • JSMR – Trading buy: Continue to rise supported by the forming of Bullish Belt Hold pattern and increase in volume ( R:6,000 | S:5,600 – Entry:5,725-5,800)

 

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UNITED TRACTORS - LESS DOWNSIDE FROM DE-RATING

09 Aug 2019

 

UNITED TRACTORS | BUY

 

LESS DOWNSIDE FROM DE-RATING

 

  • Flat 1H19 net profit on tepid 2Q19
  • Komatsu sales is on the greater risk
  • Maintain BUY with TP lowered to IDR 29,000

 

UNTR reported IDR5.58 t net profit (+2% yoy) in 1H19, forming 46% of our FY19 estimate (IDR11.97 t), mainly supported by gold mining business (Martabe). Excluding net profit contribution from gold mining (IDR1.04 t), UNTR net profit was down 17% yoy. We revised down our FY19 net profit target by 9% to IDR10.9 t, as we trim our Komatsu sales target to 3,800 units (from 4,200 units previously), expecting a dissapointment in sales to persist in 2H19 due to lower coal price, which has stayed below US$80/ton since Jun-19. Management also expressed that they might fail to meet the previous 4,000 units sales target. We maintain BUY call for UNTR but subsequently lower our TP to IDR29,000 based on a more conservative valuation approach of 1.75x 2019E PBV (at -1 sd. of 10-years mean). We note that the underperformance has pushed UNTR’s PBV multiple relative and Jakarta Composite Index (JCI) widen significantly to 73% (vs long term average of 100%). We believe the current valuation of 1.4x PBV 2019E already provides an attractive entry point for value investors. Our TP still reflects 80% relative valuation to JCI.

 

 

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ELNUSA - POSITIVE PROGRESS ON UPSTREAM SEGMENT

09 Aug 2019

 

ELNUSA | BUY

POSITIVE PROGRESS ON UPSTREAM SEGMENT

 

  • 1H19 net profit +21% yoy
  • 1H19 new contract +60% yoy
  • Maintain BUY with lower TP of IDR560

 

On its recent earnings release, ELSA reported IDR152 b net profit (+21% yoy). Revenue was up 25% yoy to IDR3.77 t, largely driven by significantly higher contribution from upstream segment that generated IDR1.62 t revenue (48% of total revenue vs 40% in 1H18), or increased by 41% yoy. Net profit from upstream has reached IDR17 b, expanded significantly from a low base of IDR1 b in 1H18, but still below our estimate due to lower-than-expected improvement in GPM (8% vs our estimate of 10%).We lowered our FY19E net profit estimate to IDR341 b (vs IDR394 b previously) as we lower our upstream’s GPM assumption from 10% to 8%. We expect net profit to improve sequentially in 2H19 on higher new contract. New contract achievement is quite strong, growing by 60% yoy to IDR1.6 t. We think there is possibility that full year new contract achievement might exceed our target of IDR3.4 t, given that it has already formed 47% of our estimate (vs average first half run-rate of 38% in 2010-18). We reiterate our BUY call on ELSA, with lower TP of IDR560, based on SOTP (sum of the parts). We now assign a lower multiple of 13x PE 2019E Elnusa Petrofin (vs 15x P/E previosly) to incorporate moderate growth outlook. Our TP implies 12x P/E 2019E.

 

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WASKITA BETON PRECAST - STILL HAS CHANCE TO IMPROVE

12 August 2019

 

WASKITA BETON PRECAST | BUY

 

STILL HAS CHANCE TO IMPROVE

 

  • Good result on debt issuance of IDR500b
  • Performance expected to recover in 2H19
  • Maintain BUY, with unchanged TP of IDR520

For the first time since IPO WSBP conducted an issuance of Phase I shelf registered bonds up to IDR500b with a 3 years tenor and quarterly interest payments. This was part of the shelf registered bond phase I program with a total value of IDR2 t. During the offering period, the bonds was oversubscribed by 2.2x. In our view, additional new debt of IDR500b won’t impact WSBP balance sheet significantly as its debt/equity currently stands at 0.6x in 1H19. Moreover, WSBP interest bearing debt dropped to IDR4.4t in 1H19 from IDR5.6t in 1H18. WSBP booked 1H19 revenue of IDR3.8t (-0,6% yoy) and net profit IDR377b (-45% yoy), this implies a run rate of 41% and 28% from our full year estimates. However, excluding the effect from back-loading revenue in 1Q18, revenue in 1H19 still grew by 15% yoy but net profit declined by 12% yoy. The main reason behind soft 1H19 net profit was the decline in gross profit margin to 17,6% from 25%. Consequently it also led to decline in gross profit by 20% yoy to IDR673 b. Lower gross profit margin was due to a change of scheme towards most of carried over contract from pre-financing base to project payment base. Yet we still keep our FY19E target earnings unchanged as we believe WSBP will secure more new contracts with better scheme in coming quarters due to ample room of financing resource along with its expertise in doing turnkey projects. Besides, WSBP booked better operating cash flow in 1H19 of IDR312 b, compared to IDR52 b in previous year on less payment due to supplier. We maintain our BUY rating on WSBP with unchanged TP of IDR520 implying 10x 2019E P/E which equivalent to -0,5 st. Dev below historical mean P/E.

 

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