Weekly Brief (December 10 14)

Transcription

1 NH Korindo Research NH 해외주식 인도네시아 Weekly Brief (December 10 14) Summary: Last week, JCI continued its two consecutive-week rally, backed by November s stable inflation and positive sentiment s resulting from G20 meeting. JCI and most of stock markets in ASEAN rallied despite sluggish global market ahead of OPEC meeting. This week, we estimate JCI to rally further. From the domestic outlook, investors will digest the release of the retail sales. On the other side, the U.S. crisis marked by inversion yields on the U.S. Treasury will loosen its hawkish stance. The backdrop is likely to spark a positive sentiment for JCI due to the subdued pressure to hiking the 2019 interest rates by BI. We recommend CTRA due to the more stable interest rates. Another to CTRA, AKRA is also another top pick stocks thank s to B20 Mandatory. JCI - one month JCI - one year 1

2 Last Week s Recap Jakarta Composite Index (JCI) : 6, (+1.16%) Foreign Investor : net sell of IDR765 billion (vs. previous week s net sell of IDR593 billion) USDIDR : 14,480 (-1.24%) 10-year Government Bond Yield : 8.035% (+16.8 bps) November s Inflation of 0.27% November s inflation was at 0.27% m-m, slightly lower than October s inflation of 0.28% m-m. Meanwhile, on an annual basis, November s inflation was at 3.23%, slightly higher than October s inflation of 3.16%. The volatile component posted the inflation of 0.23% m-m, slightly higher than October s inflation of 0.17%. The inflation posted by the volatile component in November, mainly stemmed from shallots, rice, broiler eggs, tomatoes, and carrots. On the other side, November s core inflation was at 0.22% m-m, slightly lower than October s inflation of 0.29%. OPEC s Output Cut OPEC agreed to curb oil production, yet OPEC oil cartel ended the closely-watched meeting on Thursday (12/07/2018) without specifying barrels of output crude production removed from markets. OPEC will arrange further talks with its allied oil-producing nations, including Russia. Global Equity Market Sector Index 2

3 This Week s Outlook October s Retail Sales The survey of October's retail sales will be released on Monday, 10/12/2018. September's retail sales grew by 4.8%, slightly lagging compared with the growth of 6.1% in August. Bank Indonesia (BI) estimated October's retail sales to decelerate, continuing the slowdown in September's growth. Based on the survey, October's retail sales are estimated to grow only by 3.9% y-y, in a stark contrast to the retail sales in October 2017, higher than the prior-month growth. Inverted Curve Yields of U.S. Treasury Last week, yields of the U.S. Treasury was in the inverted-curve state. For the first time since the 2007 global financial crisis, yield of the U.S. Treasury with 5-year tenor was lower than yield of the U.S. Treasury with the 2-year tenor. Meanwhile, the spread yield between the U.S. Treasury with 10 and 2 years tenors considered as accurate recession indicators slightly depleted to 0.11% and were likely to tumble to a negative zone. Based on the historical circumstances, the economic recession, occurred at more than the last 60 years, is fueled by the inverted yield curve phenomenon due to the tumbling demand for bonds with short tenor and risk lurking economy. The possible economic crisis in the U.S., particularly relating to the Fed's loose monetary tightening in 2019, will be in the spotlight. We estimate JCI to rally with the range of Although the global volatility prevails, the fact of fewer than 3 weeks of trading days in 2018 is likely to cause investors to maintain its position in Indonesia's stock market. Indonesia Retail Sales Growth (y-y) US Treasury Yield 3

4 Ciputra Development (CTRA Real Estate Developer) Dec 2019 TP 1,250 Consensus Price 1,197 TP to Consensus Price +4.5% vs. Last Price +15.2% Last Price (IDR) 1,085 Price date as of Dec 7, wk range (Hi/Lo) 1,430 / 730 Free Float (%) 53.0 Outstanding sh. (mn) 18,560 Market Cap (IDR bn) 20,138 Market Cap (USD mn) 1,387 Avg. Trd Vol 3M (mn) Avg. Trd Val 3M (bn) Foreign Ownership 26.4% Revenue Breakdown Property Development 76.9% Recurring Revenue 23.1% IDR bn FY2017 FY2018E FY2019E FY2020E Revenues 6,443 7,100 6,423 6,729 y-y -4.4% 10.2% -9.5% 4.8% EBITDA 1,725 2,368 2,034 2,150 Net profit 894 1, EPS (IDR) y-y -20.4% 31.7% -26.5% 4.6% NPM 13.9% 16.6% 13.5% 13.5% ROE 6.0% 7.3% 5.1% 5.0% P/E 24.6x 17.0x 23.2x 22.1x P/BV 1.4x 1.2x 1.1x 1.1x Year-End Performance Buoyed by Recurring Incomes The recurring income of 2015 is likely to back CTRA s financial performance at the end of In 3Q18, CTRA s revenues and net profit soared to IDR1.89 trillion (+23.9% y-y) and IDR404 billion (+21.4% y-y), followed by the hike in margins. This backdrop is likely to continue further until 4Q18 and increase FY18 margins. Focusing on Targeting First Home Buyer Ahead of 2019, CTRA will face such challenges as the presidential election and the upbeat interest rates. Both challenges inevitably suppress consumers interest in property, creating lackluster marketing sales posted by property developers, including CTRA. To mitigate the impacts of lackluster marketing sales, it focuses on developing the property for first home buyers with the high demand for residences. The development of new projects or the expansion of existing projects, i.e., CitraRaya Jambi, Citraland Gama City, Citraland Vittorio, and Citra Sentul Raya, are capable of sustaining its 2019 marketing sales. Developing Subsidized Residences Until October 2018, Citra Maja Raya posted the sales of IDR690 billion, near the 2018 sales target of IDR750 billion. Consumers high demand for such low-middle-class property as Citra Maja Raya makes CTRA develop the subsidized residences in Maja and Jambi. However, now, CTRA is still awaiting the prices regulation and unit specifications regulated by the government. Share Price Performance Margin Ratios 3Q17 3Q18 4

5 AKR Corporindo (AKRA Petroleum & Chemical) Dec 2019 TP 4,650 Consensus Price 4,848 TP to Consensus Price -4.1% vs. Last Price +17.4% Last Price (IDR) 3,960 Price date as of Des 7, wk range (Hi/Lo) 6,575 / 3,220 Free Float (%) 40.8 Outstanding sh. (mn) 4,015 Market Cap (IDR bn) 15,898 Market Cap (USD mn) 1,095 Avg. Trd Vol 3M (mn) 9.72 Avg. Trd Val 3M (bn) Foreign Ownership 25.8% Revenue Breakdown Petroleum 72% Chemical 23% Others 5% IDR bn FY2017 FY2018E FY2019E FY2020E Sales 18,288 23,494 25,845 27,913 y-y 20.2% 28.5% 10.0% 8.0% EBITDA 1,409 1,579 1,560 1,928 Net profit 1,079 2,335 1,231 1,421 EPS (IDR) y-y -0.3% 116.4% -47.3% 15.4% NPM 5.9% 9.9% 4.8% 5.1% ROE 12.0% 21.7% 10.7% 11.6% P/E 23.6x 6.8x 12.9x 11.2x P/BV 2.8x 1.5x 1.4x 1.3x Growth in Revenues Deriving from Main Business Segment In 9M18, AKRA posted the growth of 25.8% to IDR16.8 billion in revenues. The growth was fueled by the buoyance of the petroleum distribution business and the raw chemical substances. Meanwhile, the net profit grew by 28.3% y-y to IDR1.3 billion. We consider AKRA to have robust balance sheets, until 9M18, its internal cash increased to IDR3.1 trillion (vs. IDR1.2 trillion in 9M17) deriving from the sales of profitless subsidiaries. Besides, it has the low net gearing of 0.16x. Optimism for Accomplishing Target Per 9M18, AKRA posted the growth of 35.2% y-y in sales of petroleum, spurred by the hike in average selling price (ASP) due to the increasing global crude prices in 3Q18. Meanwhile, until 9M18, the distribution volume of petroleum amounted to 1.7 million kiloliters or reaching 77.2% of the 2018 target of 2.2 million kiloliters. It was attributable to AKRA s retail sales expansion through gas filling stations (SPBU). AKRA targets to operate 350 SPBU (the current number of 50 SPBU) in Jakarta greater areas, Surabaya, and Bandung within 10 next years. Banking on B20 Mandatory We are sanguine about B20 Mandatory as a positive catalyst for driving AKRA s long-term revenues growth. We oversee that AKRA s current infrastructures, i.e., 15 tank stations, are used to utilize the mixing process of B20 biodiesel. In 4Q18, AKRA will obtain the B20 biodiesel production quota of 121,000 kiloliters out of 940,000 kiloliters B20 biodiesel. Share Price Performance Revenue Breakdown by Segment in 9M18 5

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