Weekly Brief (October 01 05)

Transcription

1 NH Korindo Research NH 해외주식 인도네시아 Weekly Brief (October 01 05) Summary: Last week JCI finished in a positive territory. The backdrop enabled JCI to successfully maintain its rally further within the 3 consecutive weeks. In fact, JCI rallied last week amid the FOMC meeting and BI s Board of Governors Meeting. Investors shrugged off the pressure from the hike in the Fed s and BI s benchmark rate hikes. This week JCI is estimated to rally further. Within this week, investors main focus is on the release of September s forex reserves. The stable rupiah coupled with the rally in bonds market of September will halt the pressure on forex reserves. We recommend LSIP as it is backed by the expectancy of recovery in performance amid the implementation of B20 mandatory. BBTN is another top pick as it has the high credit growth. JCI - one month JCI - one year 1

2 Last Week s Recap Jakarta Composite Index (JCI) : 5, (+0.32%) Foreign Investor : net buy of IDR1.6 trillion (Vs. previous week s net buy of IDR1.0 trillion) USDIDR : 14,903 (+0.58%) 10-year Government Bond Yield : 8.115% (-2.5 bps) The Fed s Stance of Tightening Rates On Wednesday, 09/26/2018, the Fed s raised its benchmark rate by 25 bps to be at the range of 2%-2.5%. It was the eighth rate hike since the Fed s stance of monetary normalization in December The FOMC estimated that one possible rate hike at the end of 2018 and 3 rate hikes in Another to the rate hike projection, it projected that the U.S. economic growth reaches 3.1% in The growth projection is higher than the growth estimate of 2.8% in June. BI s Stance of Raising Benchmark Rate BI s Board of Governors Meeting held on Wednesday and Tuesday, September 26 th 27 th, decided to raise BI 7-Day Reverse Repo Rate by 25 bps to 5.75%, the highest rate since May It was the fifth rate hike in BI has raised its benchmark rate by 150 bps since May The Fed s stance of raising its rates decided at the FOMC meeting dated September 25th-26th, 2018 preceded BI s stance of raising benchmark rate. Global Equity Market Sector Index 2

3 This Week s Outlook September 2018 s Inflation The Central Statistics Agency releases the data of September s inflation on Monday, 10/01/18. In August 2018, Indonesia posted the deflation of 0.05% m-m. On yearly basis, August 2018 s inflation was at 3.20%, lower than August 2017 s inflation of 3.82%. September 2018 s inflation is estimated to be higher than August 2018 s inflation. The higher inflation is pursuant to the monthly cycle in which September 2017 s inflation was at 0.13% m-m, higher than August s inflation of -0.07% m-m. On the other hand, investors keep their wary eyes on the consistently hiking core inflation since February 2018 and settling at 2.90% in August The consistent increase in the core inflation reflects the rosier domestic consumption. September 2018 s Forex Reserves BI releases September 2018 s forex reserves on Friday, 10/05/2018. In August 2018, Indonesia s forex reserves were at USD117.9 billion. The figures were lower than July 2018 s forex reserves of USD118.3 billion and the lowest forex reserves since January September s forex reserves were the substantial indicator in light the rupiah stably hovering at the range of 14,800-14,950 in September We estimate that the trend of downbeat forex reserves in September started to cease away. The Indonesian government has shown its concerted commitment to maintaining forex reserves, for example the policy on exports proceeds converted to the rupiah denomination. We estimate that within this week JCI likely rallies at the range of Investors are estimated to respond rebound in Indonesia s forex reserves. Inflation Rate Forex Reserve & USDIDR 3

4 PP London Sumatera Indonesia (LSIP CPO) Dec 2019 TP 1,500 Consensus Price 1,449 TP to Consensus Price +3.5% vs. Last Price +17.6% Last Price (IDR) 1,275 Price date as of Sep 28, wk range (Hi/Lo) 1,570/ 905 Free Float (%) 40.4 Outstanding sh. (mn) 6,823 Market Cap (IDR bn) 8,699 Market Cap (USD mn) 584 Avg. Trd Vol 3M (mn) Avg. Trd Val 3M (bn) Foreign Ownership 11.1% Sales Breakdown: Oil Palm and Palm Kernel 91.4% Rubber 5.6% Others 3.0% IDR bn FY2017 FY2018E FY2019E FY2020E Sales 4,738 4,067 4,427 4,855 y-y 23.1% -14.2% 8.8% 9.7% EBITDA 1,344 1,148 1,224 1,549 Net profit EPS (IDR) y-y 28.7% -16.0% 10.4% 31.1% NPM 16.1% 15.8% 16.0% 19.1% ROE 9.7% 7.7% 8.1% 10.0% P/E 12.7x 13.6x 12.3x 9.4x P/BV 1.2x 1.0x 1.0x 0.9x Global Agribusiness s Upstream Sector Experiencing Global Pressures LSIP posted the decline of 10.8% in sales from IDR1.0 trillion in 2Q17 to IDR894.9 billion in 2Q18. It was attributable to the downbeat global CPO prices of 32% since the early of January The decline in sales swept in all agribusiness sectors, including Bloomberg Agricultural Index decreasing by 22.6% since the early of B20 Mandatory As the world s first CPO exporter, the Indonesia government cushioned the rising crude prices by implementing B20 mandatory taking into effect since September The government through the mandatory urges the use of B20 in non-pso (Public Service Obligation) sector including private vehicles, trains, power plants, and heavy machines. The more expensive crude prices likely accelerate the implementation of B20 inevitably resulting in 2019 s CPO outlook. This backdrop is attributable to the high demand for CPO on the back of B20 mandatory. B20 Mandatory and Moratorium on Oil Palm Plantations Drivers for CPO Prices The government bans the forest concession of new oil palm plantations within 3 ahead years and postpone the forest concession altering forest areas into oil palm plantations. The policy curbing CPO supply and the high demand for B20 inevitably boost CPO prices. Share Price Performance CPO CIF Rotterdam (IDR/kg)

5 Bank Tabungan Negara (BBTN Bank) Dec 2019 TP 3,280 Consensus Price 3,232 TP to Consensus Price +1.5% vs. Last Price +24.7% Last Price (IDR) 2,630 Price date as of Sep 28, wk range (Hi/Lo) 3,890 / 2,110 Free Float (%) 40.0 Outstanding sh. (mn) 10,590 Market Cap (IDR bn) 27,852 Market Cap (USD mn) 1,868 Avg. Trd Vol 3M (mn) Avg. Trd Val 3M (bn) Foreign Ownership 19.8% Int. Income Breakdown: Loan 94.5% Non-Loan 5.5% Reliance on Stable Growth of Mortgage Loan BBTN managed to record the 2Q18 s growth of 19.1% y-y in credit. Its mortgage loan (KPR) enjoyed the increment of 30.3% and dominated 39.4% of its overall credit portfolios. We project that at the end of 2018 its credit growth likely hits 18.1%, slightly lower than the 2017 s growth of 21.0%. Acceleration in Net Interest Income Growth The estimated lagging growth of 18.1% is capable of stimulating the acceleration in the 2018 s growth of 19.7% in interest income (vs. the 2017 s lower growth of 12.4%). Thanks to the downtrend of lower bench mark rate accelerating the 2Q18 s growth; thus, it likely enjoys the loan yield estimated to stably stand at the minimum of 10%. Acceleration in 2019 s Net Profit Growth We estimate that the 2018 s growth in net profit likely lags as in 2H18, the higher cost of deposit cushioning the decline in current account saving account (CASA). However, the 2019 s net profit is estimated to be accelerated. The little risks of benchmark rate decline coupled with the credit growth stably topping 18% likely ceases the impact of the upbeat cost of deposit. IDR bn FY2016 FY2017 FY2018E FY2019E Int. Income 17,139 19,272 23,077 27,077 y-y 14.5% 12.4% 19.7% 17.3% Op. Rev 9,446 10,945 12,414 14,612 Net profit 2,619 3,027 3,360 4,025 EPS (IDR) y-y 41.5% 15.6% 11.0% 19.8% NIM 4.4% 4.1% 3.9% 4.0% ROE 15.9% 14.8% 14.6% 15.5% P/E 5.4x 12.5x 8.3x 6.9x P/BV 0.7x 1.7x 1.1x 1.0x Share Price Performance Loan Growth 5

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