United Tractors(UNTR IJ)

Transcription

1 Equity Research Company Update Monday, 26 November 218 United Tractors(UNTR IJ) BUY Maintain Impressive Komatsu sales in Oct 218 Last price (IDR) 31,85 Target Price (IDR) 43, Upside/Downside +35.% Previous Target Price (IDR) 43, Stock Statistics Sector Heavy Equipment Bloomberg Ticker UNTR IJ No of Shrs (mn) 3,73 Mkt. Cap (IDRbn/USDmn) 118,85/8,169 Avg. daily T/O (IDRbn/USDmn) 138.8/9.5 Major shareholders (%) Astra International 59.5 Estimated free float 4.5 EPS Consensus (IDR) 218F 219F 22F Danareksa 3, ,55.7 3,913.9 Consensus 2, , ,535.3 Danareksa/Cons UNTR relative to JCI Index United Tractors (UNTR) reported impressive Komatsu sales volume of 5 units (+8.7% mom, +59.2% yoy) in Oct 218, a record high in the past four years. As such, on a cumulative basis, Komatsu sales volume is up 36.7% yoy to 4,181 units in 1M18 or 87% of our full year forecast slightly better than expected. Maintain BUY with a target price of IDR43, (based on DCF valuation with WACC of 12% and long-term growth of 3%). Record monthly Komatsu sales volume in the past four years. Komatsu continued to post impressive sales (+8.7% mom to 5 units in Oct 218) thanks to strong sales to the mining, agri and construction sectors, albeit partly offset by lower sales to the forestry sector. The Oct 218 sales figure is the highest monthly sales figure since the beginning of 214. Supported by solid coal prices, Komatsu sales volume climbed 36.7% yoy to 4,181 units in 1M18, with sales to the mining sector posting the highest growth (+44.9% yoy), followed by sales to the agri sector (+41.6% yoy) and the construction sector (+3.2% yoy). Solid coal production and OB removal. With better weather conditions since Jun 218, the mining contracting division under Pamapersada Nusantara (PAMA) showed solid operational performance with coal production up by 9.8% yoy to 12.1mn tonnes and OB removal up by 21.7% yoy to 89.1mn bcm in 1M18. The management has provided guidance for coal production of 12mn tonnes and OB removal of 935mn bcm in 218. Conservative targets for 219. The management still sets conservative targets for 219 owing to the widening gap between low CV coal prices and Newcastle coal prices which may adversely impact coalminers. Hence, Komatsu sales volume is forecast to increase moderately by 4.2% yoy to 5, units in 219 following supply side improvements from Komatsu in 2H18. Coal production and OB removal are forecast to increase by only 5% yoy. Maintain BUY with a target price of IDR43, (based on DCF valuation with a WACC of 12% and long-term growth of 3%) given the expectation of solid demand for heavy equipment, better weather conditions and the favorable exchange rate. Downside risks include faster-than-expected consolidation in coal prices which would encourage coalminers to postpone investment in purchases of heavy equipment. Source : Bloomberg x Stefanus Darmagiri (62-21) stefanus.darmagiri@danareksa.com Key Financials Year to 31 Dec 216A 217A 218F 219F 22F Revenue (IDRbn) 45,539 64,559 82,54 89,647 93,433 EBITDA (IDRbn) 9,15 13,832 21,27 23,881 26,322 EBITDA Growth (%) (26.2) Net profit (IDRbn) 5,2 7,43 11,627 13,245 14,6 EPS (IDR) 1,341. 1, , ,55.7 3,913.9 EPS growth (%) BVPS (IDR) 1, , , , ,53.1 DPS (IDR) , ,462.8 PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) Source : UNTR, Danareksa Estimates See important disclosure at the back of this report 1

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth, Danareksa Sekuritas estimates, Danareksa Sekuritas estimates Exhibit 3. Margins Exhibit 4. Gearing Level, Danareksa Sekuritas estimates, Danareksa Sekuritas estimates Exhibit 5. Strong Komatsu sales volume Exhibit 6. Record monthly high in Komatsu sales volume since 214 units % 12% 22% % 1% 21% 16% 16% 1M17 1M18 Mining Forestry Construction Agro Total units Jan-14 Nov-14 Sep-15 Jul-16 May-17 Mar-18 See important disclosure at the back of this report 2

3 Exhibit 7. Favorable weather conditions boosted coal production Exhibit 8. Lower coal sales volume since Sep 218 mn tonnes Jan-14 Oct-14 Jul-15 Apr-16 Jan-17 Oct-17 Jul-18 Coal Production (LHS) Stripping Ratio (RHS) x 9, 8,5 8, 7,5 7, 6,5 6, 5,5 5, x tonnes Jan-14 Nov-14 Sep-15 Jul-16 May-17 Mar-18 See important disclosure at the back of this report 3

4 Exhibit 9. Income Statement Year to 31 Dec (IDRbn) 216A 217A 218F 219F 22F Revenue 45,539 64,559 82,54 89,647 93,433 COGS (35,878) (5,75) (61,621) (66,972) (68,82) Gross profit 9,661 14,484 2,433 22,675 24,631 EBITDA 9,15 13,832 21,27 23,881 26,322 Oper. profit 6,76 1,756 16,137 18,19 19,744 Interest income 682 1, Interest expense (491) (874) (442) (353) (36) Forex Gain/(Loss) (349) Income From Assoc. Co s Other Income (Expenses) 115 (546) (1) Pre-tax profit 6,73 1,523 16,116 18,331 2,165 Income tax (1,626) (2,849) (4,29) (4,583) (5,41) Minority interest (12) (27) (461) (53) (524) Net profit 5,2 7,43 11,627 13,245 14,6 Core Net Profit 5,351 7,43 11,627 13,22 14,582 Exhibit 1. Balance Sheet Year to 31 Dec (IDRbn) 216A 217A 218F 219F 22F Cash & cash equivalent 19,461 2,831 2,642 25,335 31,613 Receivables 12,115 18,188 22,37 24,371 25,41 Inventory 7,18 7,855 9,323 9,795 1,68 Other Curr. Asset 3,514 4,328 4,13 4,261 4,59 Fixed assets - Net 16,685 22,251 29,181 33,319 35,742 Other non-curr.asset 5,19 8,88 8,31 8,675 8,856 Total asset 63,991 82,262 93,867 15, ,19 ST Debt 992 1, Payables 14,65 21,11 24,96 27,68 27,88 Other Curr. Liabilities 2,759 5,39 4,542 5,287 5,497 Long Term Debt 65 2,724 1,23 1,72 1,9 Other LT. Liabilities 2,948 3,623 5,586 5,745 5,867 Total Liabilities 21,369 34,724 36,433 39,573 4,67 Shareholder'sFunds 4,86 45,362 53,527 61,916 71,71 Minority interests 1,762 2,175 3,97 4,269 4,449 Total Equity & Liabilities 63,991 82,262 93,867 15, ,19 See important disclosure at the back of this report 4

5 Exhibit 11. Cash Flow Year to 31 Dec (IDRbn) 216A 217A 218F 219F 22F Net income 5,2 7,43 11,627 13,245 14,6 Depreciation and Amort. 2,444 3,76 5,7 5,862 6,578 Change in Working Capital 1,347 1,427 (2,573) 176 (613) OtherOper. Cash Flow (727) (115) 2,139 (247) (271) Operating Cash Flow 8,66 11,791 16,263 19,35 2,294 Capex (2,73) (8,52) (12,) (1,) (9,) Others Inv. Cash Flow 3,5 74 2, Investing Cash Flow 33 (7,978) (9,8) (9,277) (8,26) Net change in debt (669) 4,77 (3,594) 7 24 New Capital Dividend payment (2,175) (2,518) (3,456) (4,841) (5,457) Other Fin. Cash Flow (1,477) (4,1) 399 (294) (36) Financing Cash Flow (4,321) (2,442) (6,651) (5,65) (5,793) Net Change in Cash 4,48 1,371 (189) 4,693 6,241 Cash - begin of the year 15,413 19,461 2,831 2,642 25,335 Cash - end of the year 19,461 2,831 2,642 25,335 31,613 Exhibit 12. Key Ratios Year to 31 Dec 216A 217A 218F 219F 22F Growth (%) Sales (7.7) EBITDA (26.2) Operating profit (21.9) Net profit Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) (.4) (.3) (.3) (.4) (.4) Interest Coverage (x) Source : UNTR, Danareksa Estimates See important disclosure at the back of this report 5

6 See important disclosure at the back of this report 6