Equity SNAPSHOT - dmia.danareksaonline.comdmia.danareksaonline.com/Upload/Morning pack 20171206.pdf · better profitability and earnings, ... company has the second highest audience

Equity SNAPSHOT Wednesday, December 06, 2017

Danareksa Sekuritas – Equity SNAPSHOT

FROM EQUITY RESEARCH

Media Sector (Initiation): More bullish on FTA TV ad spending in 2018 (OVERWEIGHT)

We are positive on the outlook for the media sector next year given: 1) FTA TV ad spending will improve in 2018 driven by local FMCG

and internet companies, 2) higher expected revenues growth for

both SCMA and MNCN as they maintain their leading positions in terms of audience share, 3) content cost efficiencies which can drive

better profitability and earnings, and 4) attractive dividend yields for both SCMA and MNCN.

To see the full version of this report, please click here

Media Nusantara (Initiation): Maintaining no. 1 Audience share, cheap valuation (MNCN IJ. IDR 1,290. BUY. TP IDR 1,750)

We initiate coverage on MNCN with a BUY call and TP of IDR 1,750. We think improving local FMCG company ad spending and content

revenues should translate into higher 2018F top line growth. We also expect the company to maintain its no. 1 audience share position in

the TV industry. Meanwhile, content business efficiencies remain on

track along with the recent re-branding of Global TV and iNews. The cheap valuation, attractive dividend yield and significant potential

upside make MNCN our top pick in the sector. To see the full version of this report, please click here

Surya Citra Media (Initiation): Content cost efficiencies and clean balance sheet (SCMA IJ. IDR 2,330. BUY. TP IDR 2,800) We initiate coverage on SCMA with a BUY call and a TP of IDR2,800. We expect that improving local FMCG company ad spending will help

support SCMA’s top line growth next year. In the industry, the company has the second highest audience share and improvements

are expected in 4Q17. Content cost efficiency remains intact with

possible gross and EBITDA margins improvements. Moreover, the stock offers an attractive dividend yield. BUY!

To see the full version of this report, please click here

MARKET NEWS

Macroeconomy Government issues USD 4bn global bonds

Government sees option to increase fuel price Sector

Infrastructure: land acquisition for the Greater Jakarta LRT to

complete by March 2018 La Nina established in the tropical Pacific

Corporate Kimia Farma: KAEF allocates IDR2-3tn capex in 2018

Semen Indonesia expects its domestic cement sales to grow by 5%yoy

KEY INDEX

Close

Chg Ytd Vol

(%) (%) (US$ m)

Asean - 5

Indonesia 6,000 0.0 13.3 394

Thailand 1,698 (0.1) 10.0 1,226

Philippines 8,145 0.7 19.1 142

Malaysia 1,725 0.7 5.1 633

Singapore 3,438 (0.0) 19.3 774

Regional

China 3,304 (0.2) 6.4 33,941

Hong Kong 28,843 (1.0) 31.1 13,104

Japan 22,622 (0.4) 18.4 13,709

Korea 2,510 0.3 23.9 5,578

Taiwan 10,567 (0.8) 14.2 4,827

India 32,802 (0.2) 23.2 650

NASDAQ 6,762 (0.2) 25.6 103,273

Dow Jones 24,181 (0.5) 22.4 10,910

CURRENCY AND INTEREST RATE

Rate

w-w m-m ytd

(%) (%) (%)

Rupiah Rp/1US$ 13,519 (0.1) 0.0 (0.3)

SBI rate % 5.90 - - (1.3)

10y Gov Indo bond 6.52 (0.1) (0.1) (1.4)

HARD COMMODITY

Unit Price

d-d m-m ytd

(%) (%) (%)

Coal US$/ton 97 (0.8) (2.5) 9.2

Gold US$/toz 1,267 0.1 (1.2) 9.9

Nickel US$/mt.ton 11,321 0.8 (10.7) 13.6

Tin US$/mt.ton 19,582 0.3 (0.5) (7.7)

SOFT COMMODITY

Unit Price

d-d m-m ytd

(%) (%) (%)

Cocoa US$/mt.ton 2,006 (1.9) (2.8) (6.6)

Corn US$/mt.ton 124 - 2.6 (3.7)

Oil (WTI) US$/barrel 57 (0.3) 0.2 6.9

Oil (Brent) US$/barrel 63 0.7 1.3 10.6

Palm oil MYR/mt.ton 2,499 1.0 (10.5) (21.9)

Rubber USd/kg 146 (2.3) 2.6 (24.3)

Pulp US$/tonne 972 N/A 5.6 20.2

Coffee US$/60kgbag 114 0.1 2.4 (23.2)

Sugar US$/MT 383 (0.9) (0.5) (26.9)

Wheat US$/ton 118 (0.6) (2.6) (9.4)

Soy Oil US$/lb 33 0.1 (2.9) (2.9)

Soy Bean US$/by 1,009 1.0 3.2 1.2

Source: Bloomberg

http://dmia.danareksaonline.com/Upload/20171206%20Media%20Sector.pdf

http://dmia.danareksaonline.com/Upload/20171206%20MNCN.pdf

http://dmia.danareksaonline.com/Upload/20171206%20SCMA.pdf

Company Ticker Rec Price, IDR

Target Price, IDR

Market Cap,

IDRbn

EPS Growth, % ----- P/E, x ----- ----- P/B, x ----- EV/EBITDA, x ROE, %

2017F 2018F 2017F 2018F 2017F 2018F 2017F 2018F

Surya Citra Media SCMA BUY 2,330 2,800 29,243 (0.6) 18.5 22.9 21.3 9.1 8.2 15.8 14.6 40.5 Media Nusantara Citra MNCN BUY 1,290 1,750 20,629 7.7 19.5 12.5 10.5 2.0 1.8 7.2 6.5 18.2

www.danareksa.com See important disclosure at the back of this report

1

Equity Research Initiation

Media Sector More bullish on FTA TV ad spending in 2018

We are positive on the outlook for the media sector next year given: 1) FTA TV ad spending will improve in 2018 driven by local FMCG and internet companies, 2) higher expected revenues growth for both SCMA and MNCN as they maintain their leading positions in terms of audience share, 3) content cost efficiencies which can drive better profitability and earnings, and 4) attractive dividend yields for both SCMA and MNCN. Ad spend to grow in 2018. FTA TV ad spending is expected to improve in 1H18, relative to 1H17, thanks to higher consumption growth in 2018. We think that supported by higher fiscal subsidies in 2018, local FMCG companies will record higher revenues and ad spending growth next year of around 11% and 9% yoy for the companies under our coverage (UNVR, ICBP, MYOR, KLBF), assuming cost efficiency strategies are still implemented. We believe FMCG companies will seek to expand further, particularly by launching new products. Meanwhile, a recent Nielsen survey reveals that: 1) internet companies such as Traveloka have been advertising heavily in recent quarters, and, 2) TV dominancy in the adverting industry persists with nearly 80% market share despite an increase in digital ads.

SCMA and MNCN to maintain their leading audience share positions. SCMA and MNCN can be expected to maintain their large scale advantage during the demand upturn next year despite stiffer competition from ANTV. We expect MNCN to maintain its no. 1 position in terms of audience share at 34-35% in 2017-18F with SCMA no. 2 with audience share at 27-28% in 2017-18F. The companies will be supported in 4Q17 by the high-rating TV dramas “Cahaya Hati” and “Dunia Terbalik” (RCTI) and “Siapa Takut Jatuh Cinta” and “Anak Langit” (SCTV). Higher revenues growth in 2018; better content cost efficiencies. We forecast aggregate revenues growth in 2018 of +5.5% yoy for SCMA and MNCN, taking into account: 1) better expected SCTV and IVM revenues growth next year and 2) RCTI’s recently booked billing commitments and more upside on MNCN’s content revenues from Malaysia’s DTH satellite pay-TV license. SCMA and MNCN can 1) leverage on strong in house production capabilities to gain further content cost efficiencies and 2) monetize their local content library by selling it to various video drama streaming and Over the Top (OTT) platforms. We estimate better gross and EBITDA margins in 2018, which will translate into better earnings.

Attractive dividend yields, cheap valuations with expected better earnings on the cards. Attractive dividend yields for both SCMA and MNCN will provide further support for the stocks to rerate ahead, in our view. With capex intensity likely to be modest, we expect SCMA to maintain its net cash and MNCN to have stable net gearing going forward. Our top pick is MNCN (BUY/Target Price: IDR1,750, +35.7%) given its cheap valuation, stronger estimated revenues growth and improving profitability in 2018, followed by SCMA (BUY/Target Price: IDR2,800, +20.2%). The risks to our call include: 1) audience share stagnating or worsening, 2) higher content and operating costs, 3) stiffer competition.

Wednesday, 06 December 2017 OVERWEIGHT

Jaktrade relative to JCI Index

Source: Bloomberg

November audience shares, %

Source: Nielsen

Brand ad spend in 9M17, IDRbn

Source: Nielsen

Segmental ad spend in 9M17, IDRbn

Source: Nielsen Adeline Solaiman

(62-21) 29 555 888 ext.3503

[email protected]

800

850

900

950

1,000

11/2

7/20

16

12/2

6/20

16

1/23

/201

7

2/20

/201

7

3/20

/201

7

4/17

/201

7

5/15

/201

7

6/12

/201

7

7/10

/201

7

8/7/

2017

9/4/

2017

10/2

/201

7

10/3

0/20

17

11/2

7/20

17

-5.0

-2.0

1.0

4.0

7.0

10.0

Jaktrad Index (LHS) Relative to JCI Index (RHS) %

3

5

7

9

11

13

15

17

19

21

23

SCTV RCTI IVM MNCTV GTV ANTV

1,200

872767

572 564

0

200

400

600

800

1,000

1,200

1,400

Meikarta Traveloka Indomie VivoSmartphone

SamsungSmartphone

55

5

4

0

1

2

3

4

5

6

Politicalorganization

Hair products TelecommunicationInternet companies

http://www.danareksa.com/

www.danareksa.com See important disclosure at the back of this report 1

Equity Research Company Update

Wednesday, 06 December 2017

Media Nusantara (MNCN IJ) BUY

Maintain Maintaining no. 1 Audience share, cheap valuation

We initiate coverage on MNCN with a BUY call and TP of IDR 1,750. We think improving local FMCG company ad spending and content revenues should translate into higher 2018F top line growth. We also expect the company to maintain its no. 1 audience share position in the TV industry. Meanwhile, content business efficiencies remain on track along with the recent re-branding of Global TV and iNews. The cheap valuation, attractive dividend yield and significant potential upside make MNCN our top pick in the sector. Improving local FMCG company ad spending and content revenues; higher 2018F top line revenues growth. As we are positive on: 1) better ad spending growth in 2018 especially by local FMCG companies (as reflected in recent RCTI booked billing commitments of IDR1.1tn in 2018), and 2) more upside from content revenues next year, as the company just secured Malaysia’s direct to home (DTH) satellite pay-TV license, we estimate stronger 2018F revenues growth of +5.5% yoy. Nonetheless, we still estimate only +2.7% yoy 4Q17 revenues growth, leading to weak revenues in 2017F. Maintaining its no. 1 audience share position. MNCN’s no. 1 position in audience share will likely be maintained going forward, we think, despite competition from ANTV, which will translate into better bargaining power compared to its peers such as SCMA. We estimate MNCN’s audience share to be around 34%-35% in 2017-18F supported by its high ranking TV dramas “Cahaya Hati” and “Dunia Terbalik” in 4Q17. Content business efficiency. On the content side, MNCN’s newly-built broadcasting facilities and strong in-house production team (MNC Pictures) have so far yielded strong ratings and more importantly, reduced dependency on external content producers. MNCN is unaffected by Sinemart’s departure. The management has terminated contracts with Warner Brothers and is focusing on local content. We expect this to lead to better gross margins. BUY with a TP of IDR1,750, cheap valuation – greatest potential upside. We initiate coverage on MNCN with a BUY rating with a TP of IDR1,750, based on 10 years DCF (WACC 11% with 3% terminal growth rate), implying 14.2x P/E 2018F slightly below its 2010-2016 P/E band average. The stock is currently trading at an attractive valuation of only 10.5x P/E 2018F, about -1 std, due to MNCN’s recent share price decline after being removed from the MSCI. However, in our view, this decline in the share prices offers an entry point for investors to BUY with the stock having more upside than SCMA. It is our top pick in the sector. Risks to our call include: 1) audience share stagnating or worsening, 2) higher content and operating costs, and 3) capex overruns.

Last price (IDR) 1,290

Target Price (IDR) 1,750

Upside/Downside +35.7%

Previous Target Price (IDR) 1,750

Stock Statistics

Sector Media

Bloomberg Ticker MNCN IJ

No of Shrs (mn) 14,276

Mkt. Cap (IDR bn/USDmn) 18,416/1,362

Avg. daily T/O (IDR bn/USDmn) 27.8/2.1

Major shareholders

Global Mediacom 63.8%

Estimated free float 36.1%

EPS Consensus(IDR)

2017F 2018F 2019F

Danareksa 103.2 123.3 135.6

Consensus 110.7 126.6 135.3

Danareksa/Cons (6.7) (2.6) 0.2

MNCN relative to JCI Index

Source : Bloomberg

Adeline Solaiman

(62-21) 29 555 888 ext.3503

[email protected]

Key Financials Year to 31 Dec 2015A 2016A 2017F 2018F 2019F

Revenue, (IDRbn) 6,445 6,730 6,887 7,266 7,702 EBITDA, (IDRbn) 2,498 2,738 2,962 3,197 3,389 EBITDA Growth, (%) (10.1) 9.6 8.2 8.0 6.0 Net profit (IDRbn) 1,186 1,369 1,474 1,760 1,935 EPS (IDR) 83.1 95.9 103.2 123.3 135.6 EPS growth (%) (32.7) 15.4 7.7 19.5 9.9 BVPS, (IDR) 628.0 617.7 641.1 712.8 786.7 DPS, (IDR) 60.3 41.2 47.9 51.6 61.7 PER (x) 15.5 13.5 12.5 10.5 9.5 PBV (x) 2.1 2.1 2.0 1.8 1.6 Dividend yield (%) 4.7 3.2 3.7 4.0 4.8 EV/EBITDA (x) 8.7 7.9 7.2 6.5 5.9

Source : MNCN, Danareksa Estimates

www.danareksa.com See important disclosure at the back of this report 1

Equity Research Initiation

Wednesday, 06 December 2017

Surya Citra Media (SCMA IJ) BUY

Initiate Content cost efficiencies and clean balance sheet

We initiate coverage on SCMA with a BUY call and a TP of IDR2,800. We expect that improving local FMCG company ad spending will help support SCMA’s top line growth next year. In the industry, the company has the second highest audience share and improvements are expected in 4Q17. Content cost efficiency remains intact with possible gross and EBITDA margins improvements. Moreover, the stock offers an attractive dividend yield. BUY! Improving local FMCG company ad spending, stronger top line growth in 2018. We are positive on the outlook for ad spending growth in Indonesia in 2018, given: 1) better consumption outlook nationwide, and 2) estimated higher growth of local FMCG company ad spending next year. We estimate SCMA’s revenues growth to reach +5.5% yoy in 2018 following flattish revenues growth this year as we still estimate 4Q17 revenues growth of -0.1% yoy. Second highest audience share, improving 4Q17 prime time audience share. Despite tighter competition from ANTV, we still expect SCMA to remain the second biggest player, with audience share steady at 27% in 2017 and rising slightly to 28% in 2018F. In 4Q17, an improvement in SCTV’s prime time audience share is likely due to the high-ranking TV dramas “Siapa Takut Jatuh Cinta” and “Anak Langit”, based on the recent Nielsen survey. Content cost efficiency remains intact, margins improvement. Content costs will remain steady at the current level in 4Q17, in our view, despite the ending of the premium Torabika soccer programming in 2H17. Content cost optimization will continue to be the management’s focus in 2018, resulting in better estimated gross margins. There were higher SCTV and IVM 9M17 program costs mainly due to the President’s cup and SEA Games which were broadcast on both SCTV and IVM channels, and investing in new programs on IVM and SCTV improved the audience share. BUY with a TP of IDR2,800, stronger balance sheet and attractive dividend yield. The company will remain in a net cash position in 2017-18F, we estimate. The dividend yield remains attractive at around 3.5% in 2017-18F, slightly higher than MNCN’s. We initiate coverage with a BUY call and a TP of IDR2,800, based on 10 years DCF valuation (WACC 10% and 3% terminal growth rate), implying a mean 2010-2016 P/E. The stock is currently trading at 21.3x P/E, on its mean. Risks to our call include 1) audience share stagnating or worsening, 2) higher content and operating costs, and 3) stiffer competition from ANTV.

Last price (IDR) 2,330

Target Price (IDR) 2,800

Upside/Downside +20.2%

Previous Target Price (IDR) N/A

Stock Statistics

Sector Media

Bloomberg Ticker SCMA IJ

No of Shrs (mn) 14,622

Mkt. Cap (IDR bn/USDmn) 31,583/2,338

Avg. daily T/O (IDR bn/USDmn) 36.8/2.7

Major shareholders

PT Elang Mahkota Teknologi 60.8%

Estimated free float 39.1%

EPS Consensus(IDR)

2017F 2018F 2019F

Danareksa 101.8 109.5 118.0

Consensus 107.9 122.0 130.7

Danareksa/Cons (5.7) (10.2) (9.7)

SCMA relative to JCI Index

Source : Bloomberg

Adeline Solaiman

(62-21) 29 555 888 ext.3503

[email protected]

Key Financials Year to 31 Dec 2015A 2016A 2017F 2018F 2019F

Revenue, (IDRbn) 4,238 4,524 4,530 4,779 5,066 EBITDA, (IDRbn) 2,138 2,138 2,114 2,259 2,424 EBITDA Growth, (%) 5.7 0.0 (1.2) 6.9 7.3 Net profit (IDRbn) 1,524 1,503 1,488 1,601 1,725 EPS (IDR) 104.2 102.8 101.8 109.5 118.0 EPS growth (%) 4.8 (1.3) (1.0) 7.6 7.7 BVPS, (IDR) 215.2 234.3 256.1 284.5 315.2 DPS, (IDR) 126.6 82.9 81.4 81.4 87.5 PER (x) 22.4 22.7 22.9 21.3 19.8 PBV (x) 10.8 9.9 9.1 8.2 7.4 Dividend yield (%) 5.4 3.6 3.5 3.5 3.8 EV/EBITDA (x) 15.7 15.8 15.8 14.6 13.5

Source : SCMA, Danareksa Estimates



MACROECONOMY

Government issues USD 4bn global bonds Government just issued global government bonds for USD 4bn that will be used for prefunding the 2018 government

budget. This global bonds has rating of Baa3 from Moody’s, BBB- from S&P, and BBB- from Fitch. The newly issued global bonds consist of RI0123 (USD 1bn, 5yr, 2,95% coupon), RI0128 (USD 1,25bn, 10yr, 3,5% coupon) and

RI0148 (USD 1,75bn, 30yr, 4,35% coupon). This bonds will be traded in Singapore and Frankfurt stock exchange. (Investor Daily)

Government sees option to increase fuel price As the fuel price goes up to USD 56/barrel, government may plan to increase the oil price should the oil price is

being traded above USD 60/barrel. However, the plan to increase the oil price is still the last resort. The government is still in the progress of price formulation to find a way to make the oil supply more efficient. Beside price

formulation, government may also increase the time span of oil price evaluation which currently once every three

months. The span for oil price is expected to be once for 6 months or a year to maintain the stability of oil price. (Kontan)

SECTOR

Infrastructure: land acquisition for the Greater Jakarta LRT to complete by March 2018 Ministry of Transportation aims to complete the land acquisition for the Greater Jakarta LRT to complete by March

2018. At the moment, the land acquisition progress is on the negotiation and socialization progress. Total land

required for the project reached 61.05ha, consisting of (i) 30.6ha belongs to Ministry of Tansportation, (ii) 15.20ha belongs to regional government of Jakarta, (iii) 0.94ha belongs to Indonesian Air Force. The additional land that

needs to be acquired reached 14.25ha, which intended to be developed into depo (10ha), depo access (1ha), and other purpose (3ha). The land acquisition budget of IDR1.6tn is expected to be disbursed by end of 2017 or early

2018. Should the land acquisition progress complete by March 2018, MoT expect the LRT to be complete by March

2019 and commence operational activities by May 2019. (Investor Daily)

La Nina established in the tropical Pacific On 5-Dec-17, the Australia’s Bureau of Meteorology has raised its ENSO outlook from La Nina alert to La Nina,

indicating that the tropical pacific has reached La Nina levels. Currently, all climate models have reached or surpass

La Nina thresholds during Dec-17 and is expected to last until around Mar-18. However, the climate models point out that the La Nina will be weak and short-lived (weaker than the 2010-2012 La Nina). (Australia’s Bureau of

Meteorology)

CORPORATE

Kimia Farma: KAEF allocates IDR2-3tn capex in 2018

Kimia Farma will allocate 2018 capex of IDR2tn to IDR3tn, which will be utilized for the completion of the new factory in Banjaran – Bandung, the factory for raw material in Cikarang, improvement in warehouses as well as

clinics/pharmacies. Honesti Basyir stated that the 2018 allocated capex excludes the company’s plan for inorganic growth through acquisition. The 2018’ capex – which will be higher than this year’ capex of IDR1.7tn – will be

financed by debt and internal cash. At the moment, the company is still waiting the approval of SOE Minister to

acquire 60% stake in DWAA Ltd Co, which has 30 pharmacies in Middle East. (Bisnis Indonesia)

Comments: In 9M17, KAEF’ debt to equity ratio reached 80%. Therefore, additional debt to finance the expansion will lead to higher interest expense going forward. On the flip side, we estimate significant additional revenue contribution in 2019 at the soonest. Maintain our SELL recommendation at TP Rp1,940. (Natalia)

MARKET NEWS



Semen Indonesia expects its domestic cement sales to grow by 5%yoy Semen Indonesia (SMGR) expects its domestic cement sales to grow by 5%yoy in 2017. Including the export sales,

it expects the total sales to grow by 7%yoy. In November 2017, the company expects its sales to grow by 5%yoy,

meanwhile in December 2017, the company expects its sales to be relatively flat. (Bisnis Indonesia)

Comment: We have slightly higher total sales volume growth assumption of 8.4%yoy. Up to 10M17, SMGR recorded total sales of 23.7mn tons, +9.2%yoy. (Antonia)


DANAREKSA VALUATION GUIDE


Rating Price (Rp) Price Mkt Cap

Target Rp Bn 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Danareksa Universe 3,915,259 195,879 221,569 196.1 221.9 15.0% 13.1% 20.0 17.7 20.6 18.5 2.9 2.7 15.5 15.8

Auto 331,965 18,975 22,003 381.6 442.5 25.2% 16.0% 17.5 15.1 12.7 10.7 2.1 1.9 12.8 13.4

Astra International HOLD 8,200 9,000 331,965 18,975 22,003 469 544 449 531 25.2% 16.0% 17.5 15.1 12.7 10.7 2.1 1.9 12.8 13.4

Banks 1,487,693 86,921 100,828 388.2 450.3 16.6% 16.0% 17.1 14.8 2.6 2.3 15.9 16.5

BCA HOLD 21,000 21,000 517,755 23,620 27,068 958 1,098 958 1,098 14.6% 14.6% 21.9 19.1 N/A N/A 3.9 3.3 19.3 18.8

BNI BUY 8,450 8,500 157,581 13,089 14,997 702 804 702 804 15.4% 14.6% 12.0 10.5 N/A N/A 1.6 1.4 14.2 14.6

BRI BUY 3,350 3,600 413,208 27,521 31,515 223 255 223 255 5.1% 14.5% 15.0 13.1 N/A N/A 2.5 2.3 17.8 18.2

Bank Tabungan Negara BUY 3,400 3,600 36,006 3,135 3,658 296 346 296 346 19.7% 16.7% 11.5 9.8 N/A N/A 1.7 1.5 15.4 15.8

Bank Mandiri BUY 7,475 7,700 348,833 19,555 23,590 419 505 419 505 41.6% 20.6% 17.8 14.8 N/A N/A 2.2 2.0 12.6 14.0

BTPN BUY 2,450 2,800 14,309 1,273 1,628 222 283 222 283 -27.3% 27.8% 11.1 8.6 N/A N/A 0.9 0.8 7.8 9.4

Cement 146,090 4,407 4,918 226 252 -49.1% 11.6% 33.1 29.7 15.4 14.4 2.5 2.4 7.5 8.1

Indocement SELL 18,850 15,700 69,391 2,131 2,229 579 605 573 600 -44.9% 4.6% 32.6 31.1 17.4 16.6 2.6 2.5 8.0 8.2

Semen Indonesia HOLD 9,350 9,600 55,460 2,127 2,539 359 428 347 416 -53.0% 19.3% 26.1 21.8 11.2 10.3 1.9 1.8 7.3 8.4

Semen Baturaja SELL 2,140 440 21,239 149 150 15 15 14 15 -42.9% 0.8% 142.3 141.2 51.9 47.4 6.6 6.3 4.7 4.6

Cigarettes 662,814 20,595 22,795 174 193 5.9% 10.7% 32.2 29.1 22.2 19.9 8.6 7.8 27.4 28.3

Gudang Garam BUY 80,300 83,800 154,504 7,498 8,487 3,897 4,411 3,897 4,411 12.3% 13.2% 20.6 18.2 13.1 11.7 3.7 3.2 18.4 18.8

HM Sampoerna BUY 4,370 4,400 508,310 13,097 14,307 113 123 113 123 2.6% 9.2% 38.8 35.5 28.9 25.9 14.6 14.0 38.0 40.3

Construction 124,425 8,554 10,351 115 139 29.9% 21.0% 14.5 12.0 9.6 7.9 2.0 1.8 14.7 15.6

Wijaya Karya BUY 1,665 2,800 14,935 1,225 1,783 137 199 137 199 21.0% 45.5% 12.2 8.4 4.0 2.8 1.2 1.1 10.4 13.7

Pembangunan Perumahan BUY 2,490 5,700 15,438 1,295 1,570 209 253 233 283 33.9% 21.2% 11.9 9.8 5.8 4.8 2.4 2.0 22.5 22.6

Adhi Karya BUY 1,830 2,700 6,516 451 619 127 174 149 187 43.9% 37.3% 14.4 10.5 8.1 6.8 1.1 0.9 7.8 9.2

Waskita Karya BUY 1,950 2,800 26,469 2,383 3,034 176 224 176 224 39.1% 27.4% 11.1 8.7 11.0 9.1 2.0 1.7 19.8 21.5

Waskita Beton BUY 374 630 9,859 1,104 1,319 42 50 42 50 73.9% 19.5% 8.9 7.5 8.8 4.4 1.2 1.1 14.2 15.2

Wika Beton BUY 525 1,100 4,576 349 420 42 50 42 50 28.3% 20.2% 12.5 10.4 8.2 6.8 1.7 1.5 13.7 14.8

Jasa Marga BUY 6,425 6,300 46,632 1,747 1,606 257 236 261 240 4.4% -8.1% 25.0 27.2 14.1 12.7 3.5 3.2 14.0 11.6

Consumer 593,613 17,178 19,241 331 371 9.6% 12.0% 34.6 30.9 19.9 17.9 9.0 8.1 27.5 27.7

Indofood CBP BUY 8,650 9,700 100,876 3,894 4,296 334 368 334 368 8.2% 10.3% 25.9 23.5 16.3 14.8 5.1 4.6 20.9 20.6

Indofood BUY 7,300 9,100 64,097 4,381 4,847 499 552 501 550 5.7% 10.6% 14.6 13.2 7.0 6.2 2.0 1.9 14.5 14.8

Unilever HOLD 49,650 52,000 378,830 7,324 8,326 960 1,091 960 1,091 14.6% 13.7% 51.7 45.5 36.2 32.0 67.2 57.1 141.6 135.6

Kino Indonesia BUY 2,000 2,300 2,857 199 215 140 151 140 151 10.1% 8.0% 14.3 13.3 8.4 7.6 1.4 1.3 9.9 9.9

Mayora Indah HOLD 2,100 1,960 46,953 1,378 1,556 62 70 62 72 1.7% 12.9% 34.1 30.2 17.5 15.6 6.6 5.7 20.9 20.3

Healthcare 87,410 2,700 2,986 104 115 6.5% 11.5% 32.4 29.3 20.5 18.4 5.5 4.9 18.1 17.8

Kalbe Farma HOLD 1,610 1,700 75,469 2,411 2,660 51 57 51 57 4.9% 10.3% 31.3 28.4 19.9 17.9 5.7 5.0 19.1 18.8

Kimia Farma SELL 2,150 1,940 11,941 289 326 52 59 52 59 8.1% 12.7% 41.3 36.6 25.1 21.7 4.9 4.4 12.4 12.6

Heavy Equipment 122,069 6,873 7,645 1,843 2,049 37.4% 11.2% 17.8 16.0 7.8 6.7 2.8 2.5 16.7 16.7

United Tractors BUY 32,725 35,300 122,069 6,873 7,645 1,843 2,049 1,843 2,049 37.4% 11.2% 17.8 16.0 7.8 6.7 2.8 2.5 16.7 16.7

Industrial Estate 13,001 2,318 1,192 37 19 100.6% -48.6% 5.6 10.9 8.7 7.8 0.9 0.8 16.0 7.7

Puradelta Lestari BUY 170 240 8,194 771 779 16 16 15 15 1.8% 1.0% 10.6 10.5 9.8 9.6 1.1 1.0 10.4 10.2

Bekasi Fajar BUY 252 340 2,431 413 463 43 48 42 48 22.8% 12.3% 5.9 5.2 6.6 6.1 0.6 0.6 11.5 11.6

Surya Semesta HOLD 505 640 2,376 1,134 (50) 241 (11) (113) (19) 1716.1% -104.5% 2.1 (47.1) 9.6 7.3 0.6 0.6 32.8 (1.3)

Mining 159,630 11,073 12,401 139 156 41.4% 12.0% 14.4 12.9 5.3 4.9 1.3 1.3 9.4 10.2

Adaro Energy BUY 1,780 2,000 56,935 4,963 5,165 155 161 155 161 10.7% 4.1% 11.5 11.0 3.8 3.5 1.3 1.3 11.6 11.8

Timah BUY 775 1,100 5,772 313 334 42 45 42 45 24.3% 6.7% 18.4 17.3 6.7 6.5 1.0 0.9 5.4 5.5

Vale Indonesia HOLD 2,690 2,600 26,729 380 540 38 54 38 54 1412.0% 42.0% 70.3 49.5 9.6 9.1 1.1 1.1 1.6 2.3

Aneka Tambang HOLD 630 900 15,139 (147) 207 (6) 9 (6) 9 -52.0% -240.6% (102.8) 73.1 18.7 16.6 0.8 0.8 (0.8) 1.2

Bukit Asam BUY 11,200 14,500 25,806 2,498 3,004 1,149 1,382 1,149 1,382 72.7% 20.3% 9.7 8.1 6.6 5.6 2.2 1.8 22.9 23.2

Indo Tambangraya Megah HOLD 21,100 17,000 23,841 2,536 2,534 2,244 2,243 2,323 2,321 44.8% -0.1% 9.4 9.4 3.9 3.9 1.8 1.8 20.2 19.2

Harum Energy HOLD 2,000 2,200 5,407 530 617 196 228 196 228 196.4% 16.3% 10.2 8.8 2.4 1.9 1.3 1.3 13.4 14.7

Plantation 39,960 3,010 2,986 283 281 -1.1% -0.8% 13.3 13.4 7.1 6.7 1.3 1.2 10.3 9.5

Astra Agro Lestari HOLD 13,425 15,000 25,839 1,908 1,851 991 962 984 962 -4.9% -3.0% 13.5 14.0 7.3 6.8 1.4 1.3 10.7 9.6

Sampoerna Agro HOLD 2,580 2,320 4,876 283 301 156 166 156 166 -35.8% 6.4% 16.6 15.6 9.2 8.8 1.3 1.3 8.0 8.0

PP London Sumatra BUY 1,355 1,830 9,245 819 833 120 122 823 833 37.9% 1.7% 11.3 11.1 5.4 5.1 1.1 1.1 10.3 9.8

Poultry 62,510 4,078 5,292 27 35 -10.9% 29.8% 15.3 11.8 8.3 7.1 2.2 1.8 15.2 16.8

Charoen Pokphand HOLD 2,840 3,100 46,570 2,576 3,405 157 208 182 216 16.0% 32.2% 18.1 13.7 9.7 8.2 2.8 2.3 16.7 18.6

Japfa Comfeed BUY 1,240 1,650 14,149 1,463 1,811 128 159 128 159 -29.2% 23.8% 9.7 7.8 6.2 5.3 1.4 1.2 15.4 16.4

Malindo Feedmill HOLD 800 850 1,791 39 75 18 34 80 110 -86.4% 91.5% 45.4 23.7 6.2 5.7 0.9 0.8 2.0 3.5

Property 101,951 8,495 8,095 71 67 57.3% -4.7% 12.0 12.6 9.2 9.6 1.2 1.1 12.2 9.3

Alam Sutera HOLD 352 400 6,917 1,436 1,056 73 54 73 56 182.2% -26.4% 4.8 6.5 7.1 8.8 0.8 0.8 18.6 12.1

Bumi Serpong Damai BUY 1,560 2,000 30,025 3,923 2,784 204 145 245 184 118.4% -29.0% 7.7 10.8 6.3 8.6 0.7 0.6 12.0 6.1

Ciputra Development BUY 1,180 1,350 21,901 937 1,505 50 81 35 68 -30.0% 60.6% 23.4 14.6 13.8 10.9 1.6 1.4 7.1 10.5

Pakuw on Jati BUY 630 720 30,341 1,913 2,373 40 49 42 49 14.5% 24.0% 15.9 12.8 11.0 9.5 2.9 2.5 20.1 20.9

Summarecon BUY 885 1,100 12,768 287 378 20 26 30 33 -7.9% 31.6% 44.5 33.8 12.0 11.5 2.0 1.9 4.5 5.7

Retail 69,538 3,402 3,823 99 112 5.1% 12.4% 20.4 18.2 10.4 9.4 4.6 4.1 23.4 23.9

Mitra Adi Perkasa BUY 6,475 8,100 10,749 347 509 210 308 210 308 66.5% 46.8% 30.9 21.0 7.7 6.6 3.3 3.3 10.7 15.6

Ramayana BUY 950 1,130 6,741 431 462 67 70 67 70 10.9% 4.9% 14.3 13.6 10.2 9.2 1.9 1.7 12.5 12.4

Matahari Department Store SELL 9,775 10,500 28,523 1,928 2,029 661 696 719 777 -4.5% 5.3% 14.8 14.1 9.1 8.2 11.2 8.5 87.8 69.1

Matahari Putra Prima SELL 396 450 2,130 109 112 17 17 17 17 183.4% 2.7% 23.7 23.1 2.8 2.8 0.9 0.8 4.4 4.5

Ace Hardw are HOLD 1,125 1,300 19,294 588 711 43 47 43 47 3.2% 9.3% 26.2 23.9 24.3 23.2 5.7 5.1 18.2 19.7

Erajaya Sw asembada BUY 725 1,100 2,103 303 339 105 117 105 117 14.9% 11.8% 6.9 6.2 3.6 2.8 0.6 0.5 8.6 9.0

PER (x)

Equity

Valuation Net profit, Rp bn EPS (Rp) Core EPS (Rp) EPS Growth ROE EV / EBITDA (x) PBV (x)



LEADERS Price as on Code 05-Dec-17 04-Dec-17 Chg, % w-w, % m-m, % YTD, % Rating

Bank Tabungan Negara BBTN 3,400 3,290 3.3 9.7 16.4 95.4 BUY

Bank Negara Indonesia BBNI 8,450 8,225 2.7 3.7 9.7 52.9 BUY

Bank Rakyat Indonesia BBRI 3,350 3,300 1.5 1.5 3.1 43.5 BUY

Gudang Garam GGRM 80,300 79,150 1.5 1.0 8.6 25.7 BUY

Astra International ASII 8,200 8,100 1.2 (3.8) 1.5 (0.9) HOLD

HM Sampoerna HMSP 4,370 4,320 1.2 3.6 10.9 14.1 BUY

Matahari Putra Prima MPPA 396 392 1.0 (11.2) (33.4) (73.2) SELL

Bank Central Asia BBCA 21,000 20,800 1.0 (1.4) - 35.5 HOLD

Unilever UNVR 49,650 49,300 0.7 (1.5) 1.0 28.0 HOLD

Charoen Pokphand CPIN 2,840 2,820 0.7 (6.0) (12.9) (8.1) HOLD

Sources: Bloomberg

LAGGARDS Price as on Code 05-Dec-17 04-Dec-17 Chg, % w-w, % m-m, % YTD, % Rating

Kino Indonesia KINO 2,000 2,170 (7.8) (13.4) (20.3) (34.0) BUY

Matahari Department Store LPPF 9,775 10,500 (6.9) (12.1) (3.7) (35.4) SELL

Waskita Karya WSKT 1,950 2,080 (6.3) (9.7) (11.8) (23.5) BUY

Semen Baturaja SMBR 2,140 2,280 (6.1) (17.7) (29.1) (23.3) SELL

Timah TINS 775 825 (6.1) (7.7) (14.4) (27.9) BUY

Wika Beton WTON 525 555 (5.4) (12.5) (19.8) (36.4) BUY

Waskita Beton WSBP 374 392 (4.6) (7.0) (7.9) (32.6) BUY

Kimia Farma KAEF 2,150 2,250 (4.4) (7.7) (19.2) (21.8) SELL

Bumi Serpong Damai BSDE 1,560 1,630 (4.3) (7.1) (11.6) (11.1) BUY

Adhi Karya ADHI 1,830 1,910 (4.2) (7.8) (19.7) (12.0) BUY

Sources: Bloomberg

COVERAGE PERFORMANCE



PREVIOUS REPORTS

Ace Hardware Indonesia: Attractive entry point, Mayora Indah: Limited upside SnapShot20171205

Bekasi Fajar Industrial Estate: Beating expectations, Plantation: In a Temporary Corrective Phase, Wijaya Karya: Strong revenues growth SnapShot20171204

Adhi Karya: Heightened uncertainty over LRT project investors, Wijaya Karya Beton: Strong revenues on the back of a solid order book SnapShot20171130

Bumi Serpong Damai: Minimal impact from the deal, Indofood Sukses Makmur: Enticing valuation, Poultry Sector: New regulation to have a muted impact SnapShot20171129

Jasa Marga: There is always a way, Kalbe Farma: Brighter prospects on consumption recovery, United Tractors:

Mining sector sustained Komatsu sales SnapShot20171127 Puradelta Lestari: Value remains SnapShot20171123

Indofood CBP Sukses Makmur: More room for growth, Matahari Department Store: Expansion on track; valuation looks attractive, Waskita Karya: No glory without sacrifice SnapShot20171121

http://dmia.danareksaonline.com/Upload/Morning%20pack%2020171205.pdf









Adeline Solaiman

[email protected] (62-21) 2955 888 ext. 3503 Retail, Poultry

PT Danareksa Sekuritas

Jl. Medan Merdeka Selatan No. 14 Jakarta 10110 Indonesia Tel (62 21) 29 555 888 Fax (62 21) 350 1709

Equity Research Team S

Sales team

Novrita E. Putrianti

[email protected] (62-21) 29555 888 ext. 3128

Ehrliech Suhartono


Maria Renata

[email protected] (62-21) 29555 888 ext.3513 Construction

Lucky Bayu Purnomo

[email protected] (62-21) 29555 888 ext.3512 Technical Analyst

Laksmita Armandani


Antonia Febe Hartono, CFA

[email protected] (62-21) 29555 888 ext.3504 Cement, Property, Industrial Estate

Tuty Sutopo

[email protected]

(62-21) 29555 888 ext. 3121

Upik Yuzarni


Kevin Giarto


Stefanus Darmagiri

[email protected] (62-21) 2955 888 ext. 3530 Auto, Coal, Heavy Equip, Metal, Cement

Natalia Sutanto

[email protected] (62-21) 29555 888 ext.3508 Consumer, Tobacco, Property

Yudha Gautama

[email protected] (62-21) 29555 888 ext.3509 Plantation

Helmy Kristanto


Head of Research, Strategy

Eka Savitri

[email protected] (62-21) 29555 888 ext.3511 Banking

Ignatius Teguh Prayoga

[email protected] (62-21) 29555 888 ext.3511 Research Associate

Rendy Ben Philips




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