November 22, Tobacco: It s all about the price tag

Transcription

1 Christine Natasya To subscribe to our Daily Focus, please contact us at Market Index Last Trade Chg (%) MoM YoY JCI 6, MSCI Indonesia MSCI EM 1, HANG SENG 29, KOSPI 2, FTSE 7, DJIA 23, NASDAQ 6, Valuation 2018F P/E (x) P/B (x) ROE (%) JCI Key Rates Last Trade Chg (bps) MoM YoY BI 7-Day RR yr yr FX Last Trade Chg (%) MoM YoY USD/IDR 13, USD/KRW 1, USD/JPY USD/CNY Commodities Last Trade Chg (%) MoM YoY WTI Gold 1, Coal Palm Oil 2, Rubber Nickel 11, Copper 6, Tin 19, Tobacco: It s all about the price tag In Indonesia, tobacco industry is considered to be one of the largest industries, given the high domestic cigarette consumption. According to data from the Ministry of Agriculture, buying cigarettes makes up the 3rd largest expenditure of Indonesians in their daily expenses, which indicates a buoyant demand for cigarettes. Indonesians love for kretek offers a natural barrier The majority of Indonesia s rising machine-made (SKM) cigarette market share is attributed to the full-flavored segment, which has increased by 10%p from 28% in 2012 to 38% in 3Q17. Given Indonesia s high preference for clove cigarettes (kretek), we believe the country will continue to put up a natural barrier for white cigarettes to gain market share. In addition, global players have tried to launch clove cigarette on their own, which turned out to be unsuccessful. Back in 1984, before acquiring HMSP, Philip Morris had tried to enter the clove cigarette market, which did not end up successful as Indonesian smokers still preferred locally produced clove cigarettes. Favorable excise tax scheme for 2018F In the latest PMK, the government stated that new brands minimum retail price should not be lower than the existing brands owned by the cigarettes manufacturers. Furthermore, the regulation now only allows for price discount within 15% of the minimum retail price suggested by government. We believe the government s new regulation should benefit large cigarettes producers and bring disadvantages to smaller players which sell cigarettes at a discounted price. Furthermore, simplified excise tax brackets should benefit the bigger players. The government has planned to simplify the excise tax layers from 10 layers in 2018 to 5 layers in All in all, given the favorable environment towards cigarettes sector, we initiate coverage on the tobacco industry with an overweight stance. Our top pick within the sector is Gudang Garam (GGRM/ Trading Buy/ TP IDR91,000). Type of cigarette s market share (as of 3Q17) 5% 17% Hand rolled kretek (SKT) JCI Index VS MSCI Emerging Markets (pt) JCI 6,500 MSCI EM (pt) 1,250 39% Machine made kretek (SKM)- Full flavoured Machine made kretek (SKM)- LTN 6,000 5,500 5,000 1, % Non kretek (White cigarettes) 4,500 10/16 01/17 04/17 07/17 10/ Source: Company data, PMI US, Mirae Asset Sekuritas Research

2 Local flash ADHI: Adhi Karya: The Progress of Jabodetabek LRT is already 25%. The project of light rail transit (LRT) Jabodetabek continues to run. As of October 2017, progress has reached 23%. Currently, the development of LRT Jabodetabek has reached 25%. "This is as of November 10," said Haris Gunawan, ADHI Finance Director, Tuesday (21/11). As is known, according to ADHI assignment to Presidential Regulation no. 98 Year 2015 can be changed, Jabodebek LRT project phase 1 began to be implemented in September The investment value around Rp 27 trillion. (Kontan) MARK: Mark The dynamics of buying land assets in Deli Serdang. PT Mark Dynamics Indonesia Tbk (MARK) purchased land and buildings in Tanjung Morawa, Deli Serdang from PT Berjaya Dynamics Indonesia (BDI). This asset purchase transaction is an affiliate transaction. In the information disclosure BEI, Tuesday (21/11), initial public offering of Initial Public Offering Initial Public Offering (IPO). (Kontan) BMTR: A subsidiary of BMTR can loan USD 153 million. The subsidiary of PT Global Mediacom Tbk (BMTR), PT MNC Kabel Mediacom (MKM) has just obtained a loan facility. The loan fund will be used to strengthen cable and internet-based cable business. MNC Cable Mediacom entered into a loan facility agreement with China Development Bank (CDB) with an aggregate ceiling of USD 153 million. The 10-year tenured loan was signed on November 17, (Kontan) GEMS: A subsidiary of Golden Energy secured a US $ 15 million loan. The subsidiary of PT Golden Energy Mines Tbk (GEMS), GEMS Trading Resources Pte Ltd (GEMSTR) as co-borrower obtained a loan of USD 15 million from ICICI Bank Limited Singapore Branch. The loan term will be valid until September 3, (Kontan) Dyan: Dyandra sell assets in The City Tower IDR M. PT Dyandra Media International Tbk (Dyan) on 17 November 2017 signed an asset purchase agreement with PT Andalan Securities Lotus on sales offices in The City Tower floor 7, Jakarta Center. Daswar Marpaung, Director of DYAN, said that the selling price of asset sales including VAT is IDR billion. The transaction is not an affiliate transaction and the sale of the asset is performed after considering the asset valuation report of the public appraisal service dated November 13, (Kontan) WSKT: Waskita already pocketed a new contract of IDR 45 T. Waskita Karya Tbk (WSKT) still optimistic that we can achieve the target of IDR 60 trillion new contract until the end of the 2017's. Because during the period January-October, the company has pocketed 75% of the target. Waskita Karya has posted contracts of IDR 45 trillion for the first ten months of this year. Most of the new contracts are obtained from infrastructure projects related to toll roads. (Kontan) 2

3 Summary Technical analysis Tasrul Jakarta Composite Index (JCI) Mixed to High Item Data Item Data Close (Nov 21, 2017) 6,031.9 (-0.35%)Trading range 6,017-6,060 Average index performance (%) 4.09 Target Period Daily 6,061 r-squared Weekly 6,106 Volatility (+/-, %) / Monthly 6,108 Volatility (+/-, point) / Stop loss 6,003 Source: Research Figure 1. Daily trend Uptrend ^JKSE [ ^JKSE ] - Daily - 11/21/2017 Open: 6,062 High: 6,076 Low: 6,009 Close: 6,032 Vol. 5,722,210,816 Prev. Avg. Price: 6,038.9 R-Squared: Period: 162 Std.Dev: 1.69 Volatility (+) : Volatility (-) : V-Ratio : 0.99 Chg.: -0.4% 6, , , , , , Optimization Trading System ^JKSE - Volume = 5,722,210,816.00, EMA(Volume,17) = 5,915,168, ,915,168,256 5,722,210,816 Mar Apr May Jun Jul Aug Sep Oct Nov Source: Research 3

4 Figure 2. Daily MFI optimized,rsi optimized, Stochastic %D optimized & Bollinger Band optimized ^JKSE - MFI Smoothed = ^JKSE - RSI Smoothed = ^JKSE - Stochastic %D = 48.44, MA = ^JKSE - Daily 11/21/2017 Open , Hi , Lo , Close (-0.4%) BBTop(Average,17,1.69) = 6,073.46, BBBot(Average,17,1.69) = 5,991.32, SMA Typical Price(Average,17) = 6, , ^JKSE [ ^JKSE ] - Daily - 11/21/2017 Open: 6,062 High: 6,076 Low: 6,009 Close: 6,032 Chg. -0.4% Vol. 5,722,210,816 Prev. Avg. Price: 6,038.9 R-Squared: Period: 162 Std.: 1.69 Volatility (+) : Volatility (-) : V-Ratio : , , , Optimization Trading System ^JKSE - Volume = 5,722,210,816.00, EMA(Volume,17) = 5,915,168, ,915,168,256 5,722,210, Jul Aug Sep Oct Nov Source: Research 4

5 Figure 3. Weekly Trend Uptrend, MFI optimized,w%r optimized, Stochastic %D & Bollinger Band optimized ^JKSE - MFI Smoothed = ^JKSE - Will%R Smoothed = ^JKSE - Stochastic %D = 71.38, MA = ^JKSE - Weekly 11/21/2017 Open , Hi , Lo , Close (-0.3%) BBTop(Average,16,1.83) = 6,068.15, BBBot(Average,16,1.83) = 5,781.90, SMA Typical Price(Average,16) = 5, , ^JKSE [ ^JKSE ] - Weekly - 11/21/2017 Open: 6,067 High: 6,099 Low: 6,009 Close: 6,032 Chg. -0.3% Vol. 11,134,367,744 Prev. Avg. Price: 6,046.4 R-Squared: Period: 47 Std.: 1.83 Volatility (+) : Volatility (-) : V-Ratio : , , , , , Optimization Trading System ^JKSE - Volume = 11,134,367,744.00, EMA(Volume,16) = 27,382,108, Jun Jul Aug Sep Oct Nov Dec 2017 Feb Mar Apr May Jun 22 Jul Aug 31 Sep Oct Nov 21 27,382,108,160 11,134,367,744 Source: Research Figure 4. Daily : 6,017 6,061 Figure 5. Weekly : 6,003 6,106 Figure 6. Monthly : 5,949 6,108 ^JKSE [ ^JKSE ] - Daily - 11/21/2017 Open: 6,062 High: 6,076 Prev. Avg. Price: 6,038.9 R-Squared: Period: 162 Std.Dev: 1.69 Volatility (+) : Volatility (-) : V-Ratio : 0.99 Chg.: -0.35% ^JKSE [ ^JKSE ] - Weekly - 11/21/2017 Open: 6,067 High: Prev. Avg. Price: 6,046.4 R-Squared: Period: 47 Std.Dev: 1.83 Volatility (+) : Volatility (-) : ,106.1 V-Ratio : 1.38 Chg.: -0.33% x ^JKSE [ ^JKSE ] - Monthly - 11/21/2017 Open: 6,017 High: Prev. Avg. Price: 6,034.3 R-Squared: Period: 32 Std.Dev: 1.14 Volatility (+) : Volatility (-) : V-Ratio : ,183.3 Chg.: 0.43% x 6, , , , , , , , ,017.1 ^JKSE - Volume = 5,722,210, ^JKSE - Volume = 11,134,367, ^JKSE - Volume = 88,078,761, ,722,210,816 11,134,367,744 Oct Nov Apr Jul Oct 88,078,761,984 Source: Research Source: Research Source: Research 5

6 Chart 7. JCI Vs. USD/IDR (pt) JCI (L) USD/IDR (R) 6,100 6,000 5,900 5,800 5,700 5,600 8/22 9/19 10/17 11/14 Source: Bloomberg, (IDR) 13,800 13,700 13,600 13,500 13,400 13,300 13,200 13,100 Chart 8. JCI performance (absolute vs. relative) (%, %p) Note: Relative to MSCI EM Index Source: Bloomberg, Absolute D 1W 1M 1Y Relative Chart 9. Foreigner s net purchase (EM) Chart 10. Energy price (USDmn) 2,000 1 Day 5 Days (D-3M=100) 125 CPO WTI Coal 1,500 1, , Korea Taiwan Indonesia Thailand Philippines India /22 9/19 10/17 11/14 Note: The latest figure for India are November 20 h, 2017 Source: Bloomberg, Source: Bloomberg, Chart 11. Non-ferrous metal price Chart 12. Precious metal price (D-3M=100) Copper Nickel Tin (D-3M=100) Silver Gold Platinum 90 08/17 09/17 10/17 11/17 Source: Bloomberg, 90 8/22 9/19 10/17 11/14 Source: Bloomberg, 6

7 Table. Key valuation metrics Company Name Ticker Price Market Cap Price Performance (%) P/E(X)* P/B(X)* ROE(%)* (IDR) (IDRbn) 1D 1W 1M 1Y FY17 FY18 FY17 FY18 FY17 FY18 Jakarta Composite Index JCI 6,032 6,696, FINANCIALS Bank Central Asia BBCA 21, , Bank Mandiri Persero BMRI 7, , Bank Rakyat Indonesia Persero BBRI 3, , Bank Negara Indonesia Persero BBNI 7, , Bank Tabungan Negara Persero BBTN 2,990 31, CONSUMER HM Sampoerna HMSP 4, , Gudang Garam GGRM 78, , Indofood CBP Sukses Makmur ICBP 8, , Indofood Sukses Makmur INDF 7,725 67, Kalbe Farma KLBF 1,650 77, Unilever Indonesia UNVR 49, , AGRICULTURAL Astra Agro Lestari AALI 14,325 27, PP London Sumatera Indonesia LSIP 1,450 9, Sawit Sumbermas Sarana SSMS 1,470 14, INFRASTRUCTURE XL Axiata EXCL 3,090 33, Jasa Marga JSMR 6,525 47, Perusahaan Gas Negara PGAS 1,755 42, Tower Bersama Infrastructure TBIG 6,150 27, Telekomunikasi Indonesia TLKM 4, , Soechi Lines SOCI 286 2, N/A N/A Garuda Indonesia GIAA 328 8, BASIC-INDUSTRIES Semen Indonesia SMGR 9,975 59, Charoen Pokphand Indonesia CPIN 3,020 49, Indocement Tunggal Prakarsa INTP 20,050 73, Japfa Comfeed Indonesia JPFA 1,300 14, MINING Indo Tambangraya Megah ITMG 19,700 22, Adaro Energy ADRO 1,715 54, Aneka Tambang ANTM , Vale Indonesia INCO 2,920 29, N/A Tambang Batubara Bukit Asam PTBA 10,775 24, TRADE United Tractors UNTR 31, , AKR Corporindo AKRA 6,725 26, Global Mediacom BMTR 585 8, N/A N/A N/A N/A N/A N/A Matahari Department Store LPPF 11,300 32, Media Nusantara Citra MNCN 1,465 20, Matahari Putra Prima MPPA 492 2, N/A Surya Citra Media SCMA 2,160 31, Siloam International Hospital SILO 9,900 16, PROPERTY Bumi Serpong Damai BSDE 1,625 31, Adhi Karya ADHI 2,220 7, Alam Sutera Realty ASRI 386 7, Ciputra Development CTRA 1,165 21, Lippo Karawaci LPKR , Pembangunan Perumahan PTPP 2,750 17, Pakuwon Jati PWON , Summarecon Agung SMRA , Wijaya Karya WIKA 1,970 17, Waskita Karya WSKT 2,150 29, MISCELLANEOUS Astra International ASII 8, , Source: Bloomberg, *Note: Valuation metrics based on Bloomberg consensus estimates 7

8 Sector performance Top 10 market cap performance Name Index Chg (%) Ticker Price Market Cap (IDRbn) Chg (%) Agricultural 1, RMBA IJ , Mining 1, BJTM IJ , Basic-Industry NISP IJ , Miscellaneous Industry 1, KPIG IJ , Consumer Goods 2, IIKP IJ 274 9, Property & Construction DSNG IJ 472 5, Infrastructure 1, RIMO IJ 186 7, Finance 1, BUMI IJ , Trade STTP IJ , Composite 6, KLBF IJ , Source: Bloomberg Top 5 leading movers Top 5 lagging movers Name Chg (%) Close Name Chg (%) Close TLKM IJ 1.2 4,200 BBRI IJ ,280 HMSP IJ 1.0 4,180 ASII IJ ,125 BBCA IJ ,125 GGRM IJ ,850 KLBF IJ 1.2 1,650 TPIA IJ ,650 NISP IJ 3.8 2,060 UNTR IJ ,575 Source: Bloomberg Economic Calendar Time Currency Detail Forecast Previous 4:45am NZD Visitor Arrivals m/m 0.4% 6:00am USD Fed Chair Yellen Speaks 6:30am AUD MI Leading Index m/m 0.1% 7:30am AUD Construction Work Done q/q -2.1% 9.8% Tentative EUR German 30-y Bond Auction :30pm GBP Autumn Forecast Statement 8:30pm USD Core Durable Goods Orders m/m 0.4% 0.7% 8:30pm USD Unemployment Claims 241K 249K 8:30pm USD Durable Goods Orders m/m 0.4% 2.0% 10:00pm EUR Consumer Confidence :00pm USD Revised UoM Consumer Sentiment :00pm USD Revised UoM Inflation Expectations 2.6% 10:30pm USD Crude Oil Inventories 1.9M Note: Time is based on Indonesian local time Source: Forex Factory Disclaimers This report is prepared strictly for private circulation only to clients of PT. It is purposed only to person having professional experience in matters relating to investments. The information contained in this report has been taken from sources which we deem reliable. No warranty (express or implied) is made to the accuracy or completeness of the information. All opinions and estimates included in this report constitute our judgments as of this date, without regards to its fairness, and are subject to change without notice. However, none of and/or its affiliated companies and/or their respective employees and/or agents makes any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining unchanged after the issue thereof. We expressly disclaim any responsibility or liability (express or implied) of, its affiliated companies and their respective employees and agents whatsoever and howsoever arising (including, without limitation for any claims, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a results of acting in reliance upon the whole or any part of the contents of this report and neither Mirae Asset Sekuritas Indonesia, its affiliated companies or their respective employees or agents accepts liability for any errors, omissions or misstatements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission there from which might otherwise arise is hereby expresses disclaimed. This document is not an offer to sell or a solicitation to buy any securities. This firms and its affiliates and their officers and employees may have a position, make markets, act as principal or engage in transaction in securities or related investments of any company mentioned herein, may perform services for or solicit business from any company mentioned herein, and may have acted upon or used any of the recommendations herein before they have been provided to you. PT