Indonesia Daily Focus Taye Shim +62-21-515-3281 taye.shim@dwsec.com For subscription of our Daily Focus, please contact us at research@dwsec-id.com Market Index Last Trade Chg (%) MoM YoY JCI 5,142.0 0.2-0.1 18.9 MSCI EM 1,009.4-1.4-5.9 3.7 HANG SENG 23,229.2-1.9-4.3 3.6 KOSPI 2,026.6-0.2-2.0 1.5 FTSE 6,646.6 0.0-2.5 2.9 DJIA 17,071.2-0.2 0.1 13.1 NASDAQ 4,505.9-0.1-1.5 19.6 Key Rates Last Trade Chg (bps) MoM YoY Policy Rate 7.50 0 0 50 3yr 7.88 10 17 38 10yr 8.44 20 28-6 FX Last Trade Chg (%) MoM YoY USD/IDR 12,169.00 1.0 3.1 5.6 USD/KRW 1,053.88 0.9 4.0-1.9 USD/JPY 109.50 0.2 4.9 11.4 USD/CNY 6.15-0.2-0.3 0.1 Commodities Last Trade Chg (%) MoM YoY WTI 94.6 1.1-0.5 1.6 Gold 1,215.8-0.2-5.5-8.5 Coal 65.6 0.5-5.6-16.2 Palm Oil 750.0 0.0-0.7-14.0 Rubber 111.5 0.0-11.5-40.7 Nickel 16,980.0-2.0-9.7 21.4 Copper 6,742.0 0.4-3.4-7.7 Tin 20,725.0 1.6-6.7-12.4 JCI Index VS MSCI Emerging Markets (pt) 6,000 5,000 4,000 JCI MSCI EM (pt) 1,200 1,000 800 3,000 600 03/13 12/13 09/14 Time to revisit consumer names (Part II) We think it s time to revisit Indonesian consumer names. Although a lame story, let s quickly touch on the demographic backdrop of Indonesia: Indonesia is the world s 4 th largest populous country with a population of 251mn after China (1.4bn), India (1.2bn), US (317mn). According to Indonesia Investment Coordinating Board (BKPM), 50%+ of the population is less than 29 years old; labor participation is growing at 2.3mn per year; and Indonesia s population covers more than 39% of total population of 10 Southeast Asian countries. Simply, consumption base is huge and what s more important is that the pie is growing bigger. The problem with this explosive consumption growth story is that it s a wellknown story and hence, most of the good companies are not good stocks to own because they are already trading at stretched valuations. For example, while the JCI is trading at 16.7x against 2014F P/E, Unilever is trading at 42.0x 2014F P/E, Kalbe Farma at 36.1x, Mayora Indah at 32.5x. So how do we take advantage of this consumer story? First of all, we would like to filter our investment according to our September strategy, Big boys are back on the scene. We are looking at large cap stocks (above IDR5tr) with strong market presence. Secondly, we are looking at companies above average ROE. Thirdly, we are considering valuations in the selection. Last but not least, we are reflecting our technical analyst s view in picking stocks. Our list of selection is summarized below: Consumer stocks which we recommend to investors Ticker Description - Indofood CBP Sukses Makmur is a leading staple food solution company (Indomie noodles) ICBP - Low cost of raw materials and pricing power to keep earnings sustainable - Matahari Department store is a retail department store operator LPPF - Attractive business model which is able to capture the growing middle income households - Japfa Comfeed Indonesia is a leading animal feed manufacturer JPFA - Low wheat and soybean prices and possible lifting of import ban on Indonesian chicken meat by Japan is a positive catalyst on earnings - Tiga Pilar Sejahtera Food is a rice and food manufacturer AISA - Indonesia is still a rice import nation due to increasing domestic consumption). Given such, we believe AISA has ample leg room to fill - Tiphone Mobile Indonesia is a handset distributor as well as pre-paid credit (pulsa) distributor. TELE - As TLKM s largest distributor, we see high growth potential in handset and pre-paid credit sales Note: Forecasted figures based on Bloomberg estimates Source: KDB Daewoo Securities Research Market cap 15F ROE (IDRtr) (%) 15F P/E (x) 65.9 19.3 22.2 49.7 202.9 24.2 13.3 17.9 11.6 6.7 16.1 13.6 6.5 25.5 11.0
Local flashes AALI: CPO Sales Reached IDR 7.65 Trillion. Price of Crude Palm Oil (CPO) more blooms. It makes PT Astra Agro Lestari Tbk (AALI) was recorded IDR 7.65 trillion of CPO sales until August. This figure rose 15.9% from IDR 6.6 trillion in the same period at the previous year. In fact, the sales volume of CPO decreased 9.2% from 980,591 tons to 889,978 tons. Fortunately, the average price of CPO sales rose 27.8% from IDR 6,735 to IDR 8,604 per kilogram. (Kontan) WIKA: Top Management WIKA Sold Ownership of Shares. Top management of PT Wijaya Karya (Persero) Tbk (WIKA) returned to sell its stock. Based on the company's official release on Monday (29/9), Director of Operations I WIKA Budi Harto sold his 400,000 shares of series B, and now the remaining is 225,000 shares. Sale of shares was done at the level IDR 2,862 per share. It means Budi obtain fresh money about IDR 1.14 billion through the sale. (Kontan) PBRX: 1H14, Pan Brothers Record USD 6.9 Million Profit. PT Pan Brothers Tbk (PBRX) finally released the audited financial statements for first half of 2014. In that period, net profit jumped to USD 6.9 million. The number was up 33.6% compared to the same period last year of USD 5.17 million. The increase in profit was actually not supported from increased sales. (Kontan) GDST: Gunawan Dianjaya Steel to Realize Steel Mill Development October. Issuers of iron and steel, PT Gunawan Dianjaya Steel Tbk ready to realize a plate mill plant II in Margomulyo, Surabaya in October. Hadi Sutjipto, Director of Gunawan Dianjaya Steel said plant expansion with an investment of USD 100 million is already in the final stages to be realized. Initially, the development will be realized in September 2014, but postponed to October. (Bisnis Indonesia) CKRA: Cakra Mineral Establish New Subsidiary. PT Cakra Mineral Tbk has established a subsidiary named PT Cakra Smelter Indonesia, which will collaborate with the Hong Kong-based company Z & N International Co. Limited. In disclosure information to the Indonesia Stock Exchange, Monday (29/9/2014), Corporate Secretary Cakra Minerals Sjarif Son Dexter Sjarif Putra explains the Z & N will go in as a shareholder Cakra Smelter Indonesia. (Bisnis Indonesia) SMGR: Expand to Papua, SMGR Prepares IDR 1.5 Trillion. PT Semen Indonesia (Persero) Tbk (SMGR) more incentive to strengthen its business portfolio. Now, the state-owned listed companies will expand into eastern Indonesia, Papua to build a cement factory. "Starting in 2015, we will build a new cement plant in Papua," said Agung Nugroho, Corporate Secretary SMGR last weekend. (Kontan) BMRI: Bank Mandiri Launch Micro Services. Bank Mandiri launched Micro Service Mandiri Sejahtera on Monday (29/9). Mandiri Sejahtera Micro services include savings, investment, and microinsurance. According to Budi Gunadi Sadikin, Director of Bank Mandiri, Mandiri Sejahtera Micro Services is the result of collaboration with a number of bank subsidiary include AXA Mandiri Financial Services (AMFS), Mandiri AXA General Insurance (MAGI), Mandiri Manajemen Investasi (MMI), and Bank Syariah Mandiri (BSM). (Kontan) 2
Technical analysis Recommendation Trading Buy Target price 5,190 Stop-loss 5,060 Close 5,142 Indicator GC = Golden-cross Stoch GC MACD DN PSAR DC Volume NM AC = Accumulation Investor sentiment After a rough pullback last week, the JCI managed to successfully mark a rebound. We think it is likely to continue the uptrend. In particular, seeing that the resistance is still quite far away and yesterday's hike was not high enough collectively will lead to increased opportunities for a continuation of a rebound. Daily analysis DC = Dead-cross UP = Up DN = Down NM = Normal Dis = Distribution OB = Overbought OS = Oversold Strengthening by 0.18% yesterday led the stochastic indicator to mark a golden cross. We think there's increasing opportunities for further strengthening of the benchmark during today's trading session. Given PSAR resistance is at the 5,200pt level, we think there's sufficient leg room to fill. We are setting our initial price target of 5,250pt. 60 minutes chart If we look at chart 2 it is clear that the chances of yesterday's rebound continuing is high for today. Trend line that we created is the basis for the increase toward the green arrow. Moreover, the Stochastic and MACD indicators are supported by the golden crosses. Chart 1. Daily chart Chart 2. 60 minutes chart Source: HOTS, Source: HOTS, 3
Chart 3. JCI Vs. USD/IDR Chart 4. JCI performance (absolute vs. relative) (pt) 5,500 JCI Composite Index (L) USD/IDR (R) (IDR) 12,250 (%, %p) 16 Absolute Relative 5,250 12,000 12 12.2 11.2 8 7.2 5,000 11,750 4,750 11,500 4 0 0.2 1.6 1.5 0.1 4,500 11,250-4 -1.5 1D 1W 1M 1Y Note: Relative to MSCI EM Index Chart 5. Foreigner s net purchase (EM) Chart 6. Oil price (USDmn) 400 200 15 0-200 -400-391 -600-404 1 Day 5 Days -45 178-54 67 59-40 -295-366 (pt) WTI Brent Dubai 105 100 95 90-800 -1,000-1,200-1,074 Korea Taiwan Indonesia ThailandPhilippines India Note: The latest figure for India is September 26 th 85 80 Chart 7. Non-ferrous metal price (pt) Copper Nickel Tin 115 Chart 8. Precious metal price (pt) Silver Gold Platinum 105 100 105 95 95 90 85 85 80 4
Table 1. Key valuation metrics Company Name BANKING Ticker Price Market Cap Price Performance (%) P/E(X)* P/B(X)* ROE(%)* (IDR) (IDRbn) 1D 1W 1M 1Y FY13 FY14 FY13 FY14 FY13 FY14 Bank Central Asia Tbk PT BBCA 13,075 322,364 2.1 2.1 16.7 30.8 16.6 19.7 3.7 4.2 24.6 22.8 Bank Mandiri Persero Tbk PT BMRI 10,075 235,083 0.2-5.4-2.9 26.7 10.1 11.7 2.1 2.3 22.5 21.2 Bank Rakyat Indonesia Persero Tbk PT BBRI 10,375 255,943 0.2-3.9-6.1 43.1 8.4 10.8 2.3 2.6 29.7 27.1 Bank Negara Indonesia Persero Tbk PT BBNI 5,600 104,432 1.8-3.0 4.7 37.4 8.1 10.5 1.5 1.9 19.9 19.4 Bank Danamon Indonesia Tbk PT BDMN 3,935 37,716-0.1-4.3 4.9-1.0 9.0 11.2 1.2 1.1 13.5 10.3 Bank Tabungan Pensiunan Nasional Tbk PT BTPN 4,600 26,865 0.0 1.0 8.0 15.7 11.8 12.4 2.5 2.3 24.2 19.9 PROPERTY Surya Semesta Internusa Tbk PT SSIA 740 3,482-2.0-5.1-8.6 2.8 3.8 6.3 1.1 1.3 35.3 23.9 Ciputra Property Tbk PT CTRP 740 4,551-1.3-1.3-2.0-8.6 8.8 18.9 0.9 N/A 10.8 8.0 Pakuwon Jati Tbk PT PWON 405 19,505-1.9-4.0-6.9 42.1 11.5 12.8 3.4 3.4 33.4 31.5 Alam Sutera Realty Tbk PT ASRI 458 8,999-2.6-5.0-10.2-23.7 9.6 7.1 1.6 1.5 18.0 21.6 Bumi Serpong Damai PT BSDE 1,570 28,844-1.9-1.9-2.2 9.0 8.4 11.3 2.2 2.1 29.7 23.3 CONSTRUCTION Total Bangun Persada Tbk PT TOTL 950 3,240 0.0 2.2 19.5 21.8 8.8 20.7 2.3 4.1 27.5 20.2 Adhi Karya Persero Tbk PT ADHI 2,765 4,981-1.4-5.6-9.9 36.5 6.7 11.6 1.8 2.6 29.9 24.6 Wijaya Karya Persero Tbk PT WIKA 2,605 16,019-2.3-9.2-9.2 35.7 17.0 23.1 3.3 4.1 20.6 19.7 Pembangunan Perumahan Persero Tbk PT PTPP 2,150 10,411-1.6-9.5-12.8 92.0 13.4 19.4 2.8 4.4 23.1 23.4 Waskita Karya Persero Tbk PT WSKT 830 8,023-2.9-6.7-8.3 40.7 10.6 18.4 1.6 2.9 16.8 16.4 RETAIL & CONSUMER Indofood Sukses Makmur Tbk PT INDF 6,975 61,243 0.4-2.1 1.5-1.1 23.2 14.6 2.5 2.3 11.2 16.2 Kalbe Farma Tbk PT KLBF 1,695 79,453 0.0 0.3 2.1 43.6 30.5 36.0 6.6 8.4 25.3 24.0 Mitra Adiperkasa Tbk PT MAPI 5,500 9,130 1.9-5.6-8.7-11.3 27.9 30.0 3.8 3.4 14.3 11.5 Unilever Indonesia Tbk PT UNVR 32,000 244,160 0.6 0.1 3.1 6.1 37.1 42.0 46.6 50.7 130.2 127.2 Indofood CBP Sukses Makmur Tbk PT ICBP 11,350 66,181 0.4 1.3 8.1 10.7 26.7 25.5 4.7 4.7 18.5 19.1 Ramayana Lestari Sentosa Tbk PT RALS 940 6,670-2.1-3.1-5.5-22.3 19.3 15.5 2.3 1.9 12.5 12.6 Mayora Indah Tbk PT MYOR 30,500 27,278 0.0 3.0-0.4 12.4 22.3 32.5 6.0 6.0 30.4 18.9 Ace Hardware Indonesia Tbk PT ACES 920 15,778-1.6-4.2-1.6 31.4 19.9 27.6 5.3 6.7 29.0 26.0 Gudang Garam Tbk PT GGRM 56,600 108,903-0.6 0.2 4.8 61.7 18.7 20.4 2.8 3.3 15.5 17.2 Nippon Indosari Corpindo Tbk PT ROTI 1,160 5,872-2.1-4.5-4.5-9.4 32.7 27.6 6.6 6.1 21.7 23.9 AUTOMOTIVE Astra International Tbk PT ASII 7,050 285,409 0.7-4.1-6.9 9.3 14.2 13.8 3.3 3.0 25.0 22.5 Indomobil Sukses Internasional Tbk PT IMAS 4,400 12,167 1.1 0.0 0.0-21.4 25.4 16.4 2.3 1.9 9.6 13.5 Astra Otoparts Tbk PT AUTO 4,100 19,761-2.8-2.8 2.5-6.3 16.4 14.6 2.0 1.9 14.6 13.9 TELECOMMUNICATION Telekomunikasi Indonesia Persero Tbk PT TLKM 2,910 293,328 1.0 1.4 9.2 39.9 14.6 18.7 3.4 4.2 25.3 23.5 XL Axiata Tbk PT EXCL 6,400 54,621 0.0-1.2 7.6 50.6 43.0 139.3 2.9 3.6 6.7 2.0 Indosat Tbk PT ISAT 3,810 20,703-1.0-2.3-0.5-8.2 20.2 44.3 1.4 1.2-16.0 3.5 INFRASTRUCTURE Jasa Marga Persero Tbk PT JSMR 6,450 43,860 0.8 0.8 4.0 24.0 24.0 27.5 3.5 4.3 14.9 15.7 Tower Bersama Infrastructure Tbk PT TBIG 7,900 37,893-1.3-0.6 0.3 35.0 22.3 26.4 7.0 7.0 31.3 30.5 MINING Aneka Tambang Persero Tbk PT ANTM 1,080 10,302-1.8-1.8-9.6-23.9 24.9 109.9 0.8 0.8 3.2 2.7 Timah Persero Tbk PT TINS 1,225 9,123-1.6-5.0-14.3 12.6 15.6 16.0 1.6 1.6 10.9 11.4 Tambang Batubara Bukit Asam Persero Tbk PTBA 13,325 30,703 1.7 3.9-0.2 4.5 12.4 15.5 3.0 3.4 23.0 23.6 CEMENT Indocement Tunggal Prakarsa Tbk PT INTP 21,850 80,435-1.5-7.3-9.9 21.4 14.7 15.0 3.2 3.1 23.7 21.5 Holcim Indonesia Tbk PT SMCB 2,605 19,962-1.0-4.2-10.8 9.7 18.3 17.6 2.0 2.1 11.1 12.3 Semen Indonesia Persero Tbk PT SMGR 15,250 90,456 0.8-6.3-6.0 17.3 15.6 15.3 4.0 3.8 28.1 25.8 *Note: Valuation metrics based on Bloomberg consensus estimates 5
Sector performance Top 10 market cap performance Name Index Chg (%) Ticker Price Market Cap (IDRbn) Chg (%) Agricultural 2,071.0-0.8 LPPF IJ 17,025 49,677.6 6.4 Mining 1,246.4 0.5 IIKP IJ 1,780 5,980.8 3.8 Basic-Industry 528.2-0.3 ITMG IJ 25,900 29,265.1 3.0 Miscellaneous Industry 1,246.4 0.5 CPIN IJ 4,185 68,625.6 2.6 Consumer Goods 2,135.3 0.2 MSKY IJ 1,640 11,584.8 2.5 Property & Construction 447.3-1.2 TOWR IJ 4,200 42,852.3 2.4 Infrastructure 1,187.8 0.6 INVS IJ 845 8,441.8 2.4 Finance 696.0 0.8 APLN IJ 340 6,970.3 2.4 Trade 947.1-0.1 AKRA IJ 5,325 20,785.8 2.4 Composite 5,142.0 0.2 SMSM IJ 4,500 6,478.5 2.3 Source: Bloomberg Top 5 leading movers Top 5 lagging movers Name Chg (%) Close Name Chg (%) Close BBCA IJ 2.2 13,075 EMTK IJ -8.1 6,000 TLKM IJ 1.0 2,910 INTP IJ -1.5 21,850 LPPF IJ 6.4 17,025 ADRO IJ -2.5 1,165 ASII IJ 0.7 7,050 TPIA IJ -7.7 3,000 BBNI IJ 1.8 5,600 LPKR IJ -3.0 960 Source: Bloomberg Economic Calendar Time Currency Detail Forecast Previous 1:00am JPY Housing Starts y/y -13.9% -14.1% 2:00am EUR German Retail Sales m/m 0.6% -1.4% 2:45am EUR French Consumer Spending m/m -0.2% Jul Data EUR French Consumer Spending m/m -0.3% 0.9% 3:55am EUR German Unemployment Change -2K 2K 4:00am EUR Italian Monthly Unemployment Rate 12.6% 12.6% 5:00am EUR CPI Flash Estimate y/y 0.3% 0.4% 5:00am EUR Core CPI Flash Estimate y/y 0.9% 0.9% 5:00am EUR Unemployment Rate 11.5% 11.5% 5:00am EUR Italian Prelim CPI m/m -0.3% 0.2% 9:00am USD S&P/CS Composite-20 HPI y/y 0.1 0.1 9:45am USD Chicago PMI 61.6 64.3 10:00am USD CB Consumer Confidence 92.2 92.4 7:50pm JPY Tankan Manufacturing Index 11 12 7:50pm JPY Tankan Non-Manufacturing Index 17 19 All Day CNY Bank Holiday 9:00pm CNY Manufacturing PMI 51.1 51.1 9:35pm JPY Final Manufacturing PMI 51.7 51.7 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 Daewoo Securities Indonesia (DWS). 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 DWS 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 DWS, 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 DWS, 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 Daewoo Securities Indonesia 2014. 6