Weekly Report - Danareksa Sekuritas Online Trading
Transcription
Weekly Report - Danareksa Sekuritas Online Trading
Tuesday, 7 April 2015 OVERWEIGHT Foreign fund flow 2015 Ytd Regional Performance 2015 Ytd Sectoral Performance Helmy Kristanto (62-21) 2955 5824 [email protected] Armando Marulitua (62-21) 2955 5817 [email protected] Danareksa research reports are also available at Reuters Multex and First Call Direct and Bloomberg. Weekly Report Making Progress Progress on infrastructure development is becoming increasingly critical as it will be a measure of the government’s execution capabilities, which, encouragingly, have started to show some signs of progress with: 1) the empowerment of land acquisition law through the recent presidential decree; 2) the solid progress made on the Cikapali toll road (which will be the first major toll road to be completed since 1985); and 3) 70% completion of the infrastructure package tenders. Last week, the JCI delivered a positive return, partly driven by window dressing, but also thanks to a resumption of foreign inflows after three consecutive weeks of outflows. Some signs of progress After Jokowi took office, hopes were raised that infrastructure development would be accelerated, especially given the government’s bold growth target. The foundations for such plans were laid down through the approval of a strong infrastructure budget earlier this year. Progress in this regard is now becoming increasingly critical since it will be viewed as the measure of the government’s execution capabilities, which so far have been perceived to be solid. Although some delays can be expected during the initial stage of such a major transformation - due to administrative and delivery reasons - some progress has already started to be seen: 1. The recent empowerment of the land acquisition law through the release of Presidential Decree no. 30, 2015, for which (under the revised law) there are two main elements: a. for land acquisition, the financing can come from all sources, including project owners and private investors (as opposed to only the state or regional budgets previously). The acquisition cost will then be refunded through the state or regional budgets upon completion of the land acquisition. Whilst this change looks to place a lighter burden on the government, we believe that it may be more effective in expediting progress; and b. the land acquisition law can be applicable to all projects at any stage of completion vs fulfillment of the initial 75% land clearing threshold as stipulated in Perpres no 99 2014. 2. The soon-to-be-completed Cikampek-Palimanan (Cikapali) 117 km-long toll road, which will become the country’s longest toll road section. Physical progress has so far reached 93% with completion of the toll road expected within the next two months. Traffic is estimated at around 25k vehicles per day, rising sharply to around 80k/day during the Eid holiday period. Progress on this toll road has come under the watchful eye of the government which is keen for the deadlines to be met; thereby setting the benchmark for other projects which will follow. 3. The Ministry of Public Works and Housing has stated that progress for the tender of 13,634 infrastructure packages has now reached 70%, or 9,578 packages with total contract value of Rp59tn from the budget of Rp77tn by early April 2015. The delay in the tender progress owes to changes in the organization of the Ministry of Public Works and Housing and because some multiyear projects are still awaiting MoF approval – which, we believe, is not alarming. Despite this, the government is keen to ensure that the tender process is accelerated with 100% of the target reached by the end of May 2015. A more favorable IDR; some earnings revisions Whilst the 2014 corporate results look to be inline (at 97% of our full year sales forecasts and 100.6% of our full year bottom line estimates), the weak demand data reported so far this year in several industries signals potential disappointment. As we have highlighted in our previous report, demand weakness on a y-y basis has been palpable in autos (2W and 4W), cement and heavy equipment. Adding to our concerns, the recent IDR weakness points to a bleaker outlook for margins. Whilst the March data might bring some relief (on a m-m basis, comparisons will be aided by more working days), it will not be sufficient to reverse the negative growth on a y-y basis, in our view. Nonetheless, the recent appreciation of the rupiah is encouraging, and coupled with improvements on Indonesia’s macroeconomic front, we anticipate a more conducive environment for companies in 2H. In recent weeks we have trimmed our 2015 earnings estimates for consumers (due to weaker-than-expected 2014 results), mining stocks (lower coal and nickel price assumptions) and telecoms (lower management guidance). Resumption of inflows The JCI gained 1.1% w-w, partly helped by 1Q15’s window dressing. Property was the best performing sector, up 3.4% w-w, which we believe was mainly driven by the expectation of 1. more-relaxed government regulatory change than initially believed and 2. further interest rate cuts which would boost demand. Foreign inflows resumed last week reaching IDR1.46tn - the first weekly inflows after three weeks of outflows amounting to IDR7.0tn. Market catalysts are, arguably, still lacking at this stage, in our view. The announcement of demand data in the coming weeks and the 1Q15 results by the end of the month will be closely followed, although there could be disappointments in regard to the latter. We continue to maintain our Overweight call on the market with a year-end index target of 5,900. 7 April 2015 Weekly Report Exhibit 1. Regional weekly performance Exhibit 2. Regional Ytd 2015 performance Source: Bloomberg, as of 2 Apr 2015 Source: Bloomberg, as of 2 Apr 2015 Exhibit 3. Sector weekly performance Exhibit 4. Sector Ytd 2015 performance Source: Bloomberg, as of 2 Apr 2015 Source: Bloomberg, as of 2 Apr 2015 Exhibit 5. Average daily transactions Exhibit 6. Foreign fund flows Source: IDX, as of 2 Apr 2015 Source: IDX, as of 2 Apr 2015 2 7 April 2015 Weekly Report Exhibit 7. Regional market valuations 2015F 2016F Philippines 20.2 17.8 Malaysia 16.8 15.5 NKY 18.6 16.9 Singapore 14.1 12.9 JCI 16.3 13.8 Dow Jones 16.2 14.6 Sensex 15.8 13.3 Thailand 15.1 13.2 FTSE 16.0 14.0 Hongkong 12.1 10.9 China 15.4 13.4 Taiwan 13.2 12.3 Average 15.5 13.7 Exhibit 8. JCI Valuation Source: Bloomberg, as of 2 Apr 2015 Source: Danareksa Sekuritas, as of 2 Apr 2015 Exhibit 9. USD/IDR performance Exhibit 10. CDS - 5 years Source: Bloomberg, as of 2 Apr2015 Source: Bloomberg, as of 2 Apr 2015 Exhibit 11. Danareksa bonds yield index Exhibit 12. Country risk premium Source: Danareksa Sekuritas, as of 2 Apr 2015 Source: Danareksa Sekuritas, as of 2 Apr 2015 3 7 April 2015 Weekly Report Exhibit 13. Winners within our coverage Exhibit 14. Losers within our coverage Source: Bloomberg and Danareksa Sekuritas, as of 2 Apr 2015 Source: Bloomberg and Danareksa Sekuritas, as of 2 Apr 2015 Exhibit 15. Winners within our coverage (Weekly) Exhibit 16. Losers within our coverage (Weekly) Source: Bloomberg and Danareksa Sekuritas, as of 2 Apr 2015 Source: Bloomberg and Danareksa Sekuritas, as of 2 Apr 2015 Exhibit 17. Government policy package to aid rupiah 1 Fiscal incentives in the form of tax allowance for foreign companies that reinvest their earnings in Indonesia and local companies that export at least 30% of their total production, as well as tax breaks for companies that invest in research and development and those in shipping and railway industries. 2 Import duties and temporary anti-dumping measures to protect local industries. 3 Visa waivers for nationals of 30 countries. 4 Increase in mandatory biodiesel mix from currently 10% to 15% in diesel. 5 Requirement for commodity exporters to file L/C to the government to improve monitoring of Indonesia's foreign exchange exports. 6 Merger of domestic state-run insurance firms. Source: Various publications 4 7 April 2015 Weekly Report Exhibit 18. Foreign reserves vs USD/IDR exchange rate Source: Various publications Exhibit 19. FY14 Results Source: Company, Danareksa Sekuritas 5 7 April 2015 Weekly Report Exhibit 20. One week report wrap Date Company Title Key Point 6-Apr-15 PTBA Standing out from the crowd 2-Apr-15 ECII Enticing valuation 2-Apr-15 BBCA Quality but at a hefty price 1-Apr-15 SILO To Retain Its Dominance Despite unfavorable coal prices which will encourage coal miners to either maintain or reduce coal production, we still believe that Bukit Asam (PTBA) will be able to maintain double-digit coal production of 3year CAGR of 11% in 2014 – 2017. Maintain BUY with a lower Target Price of Rp13,500 ECII booked Rp129bn of net profits in FY14, down 37% yoy, mainly due to increasing rental and service charge expenses. This year’s focus will be on increasing operating performance and efficiencies through the implementation of new IT systems. At the same time, the company will also continue to undertake further store expansion. BBCA’s market share in deposits declined as the competitive environment in CASA tightened. Notably, its CASA to deposits ratio fell to 75.1% as of December 2014 from 78.9% as of December 2013 – a reflection of the tight liquidity conditions in 2014. Yet, we expect this ratio edge up to 75.9% by December 2015F, since we expect liquidity to improve this year.We upgrade our TP to IDR14,050, implying PBV of 3.7-3.1x for 2015-16F. HOLD maintained. We initiate coverage on Siloam Hospitals with a BUY recommendation and a Target Price of IDR15,750 based on DCF valuation. Our Target Price implies 31x/23x 2015F/16F EV/EBITDA, putting the stock at a premium to its regional peers. However, we believe this premium is justified given: 1) Siloam’s leading position in Indonesia’s growing healthcare Industry, 2) its aggressive expansion plans to build 20 new hospitals over the next three years, and 3) its high EBITDA estimated growth of 42% in 2014-2017F. Source: Danareksa Sekuritas 6 Danareksa Quant Model 7 April 2015 Weekly Report DQM model commentary: Last week the JCI moved in green territory, recording a positive w-w return of 1.1% thanks to the strengthening in all sectors except for miscellaneous. This week, our DQM model predicts another strengthening in the market with most big caps stocks (esp. banking and consumer) are expected to strengthen. However, some big cap stocks such as TLKM, GGRM, UNTR, PTBA, and ADRO are expected to record negative w-w performance. (Please see the details in the table above). 8