INVESTOR DIGEST Digest/8. Agustus... · 2020. 8. 4. · Please see important disclosure at the back...

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Latest 2020F

7-DRRR (%), eop 4.00 4.00

Inflation (YoY %) 1.54 2.52

US$ 1 = Rp, period avg 14,704 14,745

JCI Index 5,006.2 -2.79%

Trading T/O ( Rp bn ) 9,543.2

Market Cap ( Rp tn ) 5,800.9

2020F 2021F

P/E (x) 19.8 14.3

P/BV (x) 2.0 1.9

EV/EBITDA (x) 12.9 11.3

Div. Yield (%) 3.4 2.6

Net Gearing (%) 25.5 22.6

ROE (%) 10.2 13.5

EPS Growth (%) -26.6 38.4

EBITDA Growth (%) -9.8 13.6

Earnings Yield (%) 5.1 7.0

* Aggregate of 76 companies in MS research universe,

representing 65.0%of JCI’s market capitalization

Economic Data

Stock Market Data (3 August 2020)

Market Data Summary*

• Jul-20 CPI: Food and Air Transport Led Deflation; Revising YE20 Forecast • Banking Data May-20: Ample Liquidity, NPL Increased Again • Antam: Helped by Lower Opex (ANTM; Rp700; Buy; TP: Rp700) • Bank Tabungan Negara: 1H20 Results – A Turning Point in 2Q20 (BBTN; Rp1,210; Buy;

TP: Rp1,350) • Ciputra Development 2Q20: Net Loss on Interest and Tax Erosion (CTRA; Rp610; Buy;

TP: Rp1,120) • Harum Energy: Cost Cutting helps Support Bottom line (HRUM; Rp1,235; Neutral; TP:

Rp1,300) • Indofood CBP: Conference Call Takeaways: 2Q20 Results (ICBP; Rp9,300; Buy; TP:

Rp10,300) • Indofood: 2Q20 Results Call Takeaways (INDF; Rp6,475; Buy; TP: Rp8,450) • Media Nusantara Citra: 2Q20 Results - Margins Held Up Well (MNCN; Rp790; Buy; TP:

Rp2,200) • Medikaloka Hermina 2Q20 Results: Most Resilient Among Peers (HEAL; Rp3,000; Buy;

TP: Rp5,200) • Pakuwon Jati: 2Q20: Gross Loss (PWON; Rp396; Buy; TP: Rp670) • Pembangunan Perumahan: 2Q20 Earnings Beat Our Estimates (PTPP; Rp910; Buy;

TP: Rp1,370) • Sarana Menara Nusantara: 2Q20 Results - All-Round Beat (TOWR; Rp1,130; Buy; TP:

Rp1,300) • Waskita Beton: 2Q20 Results – Below Expectations (WSBP; Rp186; Buy; TP: Rp242) • Market Recap August 3rd 2020; JCI 5,006.22 Points -143.40 pts (-2.78%); Valued

$648mn; Mjk Cap $390bn; USD/IDR 14,704 Jul-20 CPI: Food and Air Transport Led Deflation; Revising YE20 Forecast

Deflation in Jul-20 aligned with our estimate. The Statistic Agency (BPS) announced a declining consumer price of -0.10% MoM in Jul-20, which is aligned with our estimate at -0.05%, while the consensus expected a small inflation of +0.05%. The monthly deflation was due to lower prices of food and transportation groups, especially air transport. This brings the annual inflation to ease to 1.54% YoY from 1.96% in Jun-20, with year-to-date inflation at 0.98% (the lowest figure since 2009). Furthermore, the core inflation trimmed to 2.07% (vs. our forecast at 2.10%) from 2.26% in the corresponding period.

Food and air transport as the source of deflation. The food group became the main factor for the deflation, as it contributed -0.19 ppt to the total monthly figure (vs. our forecast at -0.14 ppt). The food price decrease reflected the lackluster demand followed by sufficient supply amid the benign weather condition. Air transport also contributed -0.05 ppt and the contribution of education inflation was only 0.01 ppt (vs. 0.05 ppt in July 2015–2019 average) despite the new academic year.

HIGHLIGHT

ECONOMY

Equity Research | 4 August 2020 INVESTOR DIGEST

Equity Research | 4 August 2020


Declining wholesale price index. From the producer side, the wholesale price index also posted a deflation of -0.08% MoM in Jul-20, translating to an annual figure of 0.81% YoY (vs. 0.83% in the previous month), even weaker than consumer. The agriculture sector had the deepest price decline, with -0.07 ppt contribution, similar to the food deflation from the consumer side, followed by the manufacturing sector (-0.02 ppt contribution).

Revising down our inflation forecast. All in all, as the inflation has been lower than anticipated and will likely be followed by a modest economic recovery ahead, we decided to cut our inflation forecast to 2.0% from 2.7% for YE 2020. In details, the economic growth is still estimated to be below its potential level (or in other words, negative output gap), resulting in modest demand-pull inflation in 2H20. Moreover, we do not see a potential shock on food supply, as the World Meteorological Organization expects a low probability of El Nino at 10% for Jun-Nov 2020. In fact, we see the YE inflation could be less than 2% if fuel price is slashed around 10-15% (reducing inflation by -0.2 to -0.4 ppt).

INFLATION SUMMARY

Jun-20

MS Forecast Market Consensus Actual

Headline inflation (%, YoY) 1.96 1.59 1.71 1.54

Headline inflation (%, MoM) 0.18 -0.05 0.05 -0.10

Core inflation (%, YoY) 2.26 2.10 2.11 2.07

Jul-20

Sources: CEIC, Mandiri Sekuritas estimate

FOOD PRICE CONTRIBUTED -0.19 PPT TO TOTAL DEFLATION

WE REVISE DOWN OUR YE 2020 INFLATION FORECAST TO 2.0%

FROM 2.7%

Estimate Actual

Rice (0.01) (0.01)Broiler chicken meat (0.05) (0.04)Broiler chicken egg 0.02 0.04Red onion (0.07) (0.11)Garlic (0.03) (0.03)Chili pepper (Rawit) 0.00 (0.01)Sugar (0.04) (0.01)Others 0.03 (0.02)Total (0.14) (0.19)

Jul-20 (in ppt)Commodity

7.0

3.84.3

8.4 8.4

3.4 3.03.6

3.12.7 2.7

2.0

0.01.02.03.04.05.06.07.08.09.0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

F

Year-End Inflation (%)

Initi

al

Revi

sed

Source: BPS, Mandiri Sekuritas estimate Source: CEIC, Mandiri Sekuritas estimate Leo Rinaldy(+6221 5296 9406) [email protected] Imanuel Reinaldo(+6221 5296 9651) [email protected]

Banking Data May-20: Ample Liquidity, NPL Increased Again

Banking sector loan growth slowed down to +3.1% YoY/-0.6% YTD, while deposits growth continued to advance by +8.9% YoY/+2.9% YTD. NPL increased to 3.00% partly as a result of downgrade from SML, which declined to 6.43%. NIM declined to 4.50% in May, and we anticipate this to decline further in coming months. Maintain Overweight.

SECTOR



Loan growth:

− +3.1% YoY (-0.4% MoM/-0.6% YTD) in May, slower than April at +5.7% YoY (-1.8% MoM/-0.1% YTD).

− Adjusted for rupiah movement, total loan growth was at +2.7% YoY, slower compared to +4.7% YoY in April. Rupiah loan growth was at +2.7% YoY (+5.4% YoY in April), foreign currency in rupiah growth at +5.1% (7.8%), while FX loan growth in USD was at +2.7% YoY (+1.1% YoY in April).

− Based on bank classification, BUKU IV (7 banks) continued to record the highest loan growth at +8.3% YoY, followed by BUKU II at +3.2% YoY, while BUKU III’s loan growth contracted by -5.5% and BUKU I’s by -38.0% YoY. Sharia banks’ loan growth was at +9.3% YoY compared to +9.8% YoY in April.

− In terms of usage, investment loans posted the highest growth at +6.8% YoY, followed by consumption loans at +2.2% YoY and working capital loans at +1.5% YoY.

− Of the large sectors with >5% loan exposure: agriculture loans (6.7% exposure) grew by +3.8% YoY, manufacturing (16.7%) by +5.4% YoY, construction (6.5%) by +5.2% YoY, and home ownership/landed house (8.6%) by +3.6% YoY, while wholesale and retail trade (17.2%) continued the declining trend at -2.7% YoY due to rising NPL.

− On the regional basis, all areas reported slower loan growth in May, with Java and Bali seeing the steepest reduction in loan growth to +2.7% YoY from +5.5% in April, followed by Kalimantan to +0.8% YoY from +3.5% YoY, Sumatra to +0.7% YoY from +2.8% YoY, and Sulawesi to 1.5% YoY from 2.9% YoY.

Deposit growth:

− +8.9% YoY (+0.8% MoM/+2.9% YTD) vs. +8.1% YoY (-1.4 MoM/+2.2% YTD) in April.

− Adjusted for currency movement, deposits grew by +8.5% YoY in May, lower than 7.1% YoY in April. Rupiah deposits grew by +7.6% YoY vs. +7.8% YoY in April. Foreign currency deposits in rupiah grew by +16.9% YoY vs. +10.0% YoY. In USD, FX deposits increased by +14.1% YoY vs. +3.2% in April.

− Based on bank classification, deposits in BUKU IV banks grew the highest at +15.3% YoY, followed by BUKU II’s at +6.9% YoY. Meanwhile, deposits in BUKU I contracted by -42.6% YoY due to flight-to-quality to bigger banks and weak loan demand, and deposits in BUKU III slightly declined by -1.2% YoY. Deposit growth in sharia banks was at +11.3% YoY.

− Based on type, CASA deposit growth was at +13.2% YoY in May vs. 12.7% in April (CA at +19.6% YoY and SA at +8.7% YoY), while time deposits grew by +3.6% YoY. More e-commerce transactions during the crisis have helped support CASA growth so far.

Liquidity: LDR declined to 90.5% in May from 91.5% in April. BUKU IV banks’ LDR declined to 87.1% from 89.2% in April, and BUKU II’s to 89.1% from 89.8%, while LDR in BUKU I increased to 88.9% from 87.2%, and in BUKU III to 100.1% from 98.9%. Excluding BBCA, LDR in BUKU IV banks was at 89.4% in May vs. 91.4% in April. LDR in sharia banks was at 80.5% in May vs. 78.7% in April.

Asset quality:

− NPL increased to 3.00% from 2.89% in April, wherein part of it came from the special mention loans (category 2), which declined to 6.43% from 7.16% in April. In absolute terms, total NPL increased by +18.5% YoY/+3.3% MoM, while special mention loans increased by +25.9% YoY/-10.6% MoM, as many of the borrowers have started to be affected by the COVID-19 outbreak.

− BUKU IV banks saw the largest increase in NPL to 2.76% in May from 2.58% in April, followed by BUKU II to 4.11% from 4.01%, BUKU III to 3.04% from 3.01%, and BUKU I to 3.35% from 3.32%. NPF in sharia banks slightly declined to 3.35% from 3.41% in April.

− In terms of loan segment, NPL in investment loans worsened to 2.47% from 2.43% in April, in working capital loans to 3.84% from 3.71%, and in consumption loans to 2.14% from 2.00%.



− Main industries’ NPL levels: NPL in mining increased to 5.03% (from 3.73% in April), in processing industry to 4.39% (4.17%), in accommodation and F&B to 6.21% (5.67%), and in wholesale & retail to 4.29% (4.19%), while in construction it declined to 3.91% (3.93%). NPL in household loans increased to 2.25% from 2.11% in April, as NPL in home ownership (landed house) increased to 3.18% (3.12% in April), in apartment ownership to 2.64% (2.32%), in shop house ownership to 6.31% (6.17%), and in vehicle ownership to 2.40% (1.79%).

− Java and Bali posted the largest increase in NPL to 3.04% from 2.90% in April, followed by Kalimantan to 3.54% from 3.46% and Sumatra to 3.28% from 3.27%. Meanwhile, NPL in Sulawesi declined to 3.00% from 3.03%.

− Loan-loss coverage ratio declined slightly to 161% from 163% in April due to rising NPL. Coverage ratio remains the highest in BUKU IV at 214%, down from 225% in April, then in BUKU III at 108% (108%), BUKU II at 105% (106%), and BUKU I at 80% (82%). Coverage ratio in sharia banks improved to 80% from 77% a month earlier.

Profitability:

− Industry NIM declined to 4.50% from 4.57% in April on additional restructured loans. We expect lower NIM to continue in the coming months, in-line with declining central rate.

− Only BUKU I banks saw an improvement in NIM to 4.80% from 4.72% in April. Meanwhile, NIM in BUKU IV declined to 4.95% from 5.09%, in BUKU III to 3.59% from 3.65% and in BUKU II to 4.65% from 4.67%.

− Interest rates have continued trending down in the past one year across all types of loans. On average, lending rates have declined by 72 bps in the past 12 months. On the deposit side, the average 1-M T/D rates have declined by 117 bps over the past 12 months.

Capital: average CAR slightly increasing to 22.2% in May from 22.1% in April.

Maintain Overweight for the banking sector.

OJK BANKING DATA SUMMARY

May-19 Jun-19 Sep-19 Dec-19 Mar-20 Apr-20 May-20

Loan growth (% YoY) 11.1 9.9 7.9 6.1 8.0 5.7 3.1

Deposits growth (% YoY) 6.3 7.4 7.5 6.5 9.5 8.1 8.9

LDR (%) 95.5 94.3 93.8 93.6 91.9 91.5 90.5

NPL (%) 2.61 2.50 2.66 2.53 2.77 2.89 3.00

Loan-loss coverage (%) 117 118 118 116 165 163 161

Special mention loans (%) 5.3 5.6 5.6 5.1 6.6 7.2 6.4

NIM (%) 4.90 4.90 4.90 4.91 4.31 4.57 4.50

CAR (%) 22.4 22.6 23.3 23.4 21.7 22.1 22.2

Avg. Rp. lending rates (%):

Investment loans 10.26 10.24 10.11 9.90 9.70 9.45 9.32

Working capital loans 10.43 10.39 10.29 10.03 9.91 9.68 9.55

Consumer loans 11.57 11.57 11.53 11.62 11.37 11.29 11.22

Avg. Rp. deposit rates (%):

Demand deposit 2.27 2.21 2.21 2.27 2.18 2.25 2.20

Savings deposit 1.26 1.29 1.24 1.17 1.14 1.09 1.03

1-M T/D 6.78 6.70 6.32 6.02 5.72 5.65 5.61

3-M T/D 6.81 6.81 6.57 6.32 6.12 5.95 5.87

BI rate (%) 6.00 6.00 5.25 5.00 4.50 4.50 4.50

Source: OJK, BPS, Mandiri Sekuritas

Tjandra Lienandjaja (+6221 5296 9617) [email protected] Silvony Gathrie (+6221 5296 9544) [email protected]



Antam: Helped by Lower Opex (ANTM; Rp700; Buy; TP: Rp700)

ANTM’s 6M20 net profit was above forecast, driven by lower opex despite weak revenue due to lower gold and nickel ore sales. Higher nickel and gold prices should support earnings in 2H20.

6M20 net profit was above forecast due to lower opex. Aneka Tambang (ANTM) reported 2Q20 net profit of Rp367bn (+89%yoy), bringing 6M20 net profit to Rp85bn (-77% YoY), above our FY20F of Rp22mn net loss and consensus forecast of Rp86mn net profit. We believe the reason of the better-than-expected number was due to lower operating expenses (-47% YoY), while looming interest cost in1Q20 due to foreign exchange loss has decreased as USD weakened. As a result, its 6M20 operating profit of Rp451bn (-39% YoY) has exceeded our FY20F of Rp312bn. Low oil price should be positive for ANTM, as fuel accounts for 35% of FeNi’s cash cost. Going forward, we see better earnings contribution from FeNi and gold, mainly driven by higher ASP as a result of higher commodity prices. However, its 1H20 revenue at Rp9.2tn (-36% YoY) was weaker than expected, mainly due to lower sales revenue from gold (-33% YoY) and nickel ore (-95% YoY; as a result of nickel ore export ban starting this year), and still weak demand from the domestic market.

Key points to highlight in 2Q20: 1) FeNi’s ASP in 2Q20 stood at USD 10.9k/ton (-14% YoY/+2% QoQ), far below the current spot price of USD 13.7k/ton (-1.5% YTD). Gold ASP increased to USD 1,844/toz (+37% YoY/+8% QoQ). 2) FeNi sales volume stood at 6.7k tons (+10% YoY/+4% QoQ), while gold sales volume was at 2.8k tons (-69% YoY/-45% QoQ), affected by COVID-19 outbreak. 3) ANTM sold only 167k wmt of nickel ore (-92% YoY/no sales in 1Q20), implying ASP of USD 37/ton.

A cheaper nickel play. Despite recovery in nickel and gold prices, we believe this year is difficult for ANTM, as we also still see risk on domestic nickel ore sales after the government banned nickel ore export starting this year. However, ANTM’s valuation is attractive at 0.6x FY21F PBV, at 45% discount to INCO’s 1.1x.

FINANCIAL SUMMARY YE Dec (Rp Bn) 2018A 2019A 2020F 2021F 2022F EBITDA 2,349 2,010 1,425 1,540 1,525 Net Profit 1,636 194 (22) 197 163 Fully-diluted EPS 68 8 (1) 8 7 Fully-diluted EPS growth (%) 1,098.5 (88.2) (111.2) n/m (17.1) P/E Ratio (x) 10.3 86.8 (772.6) 85.5 103.1 EV/EBITDA (x) 9.1 10.8 14.1 12.9 12.6 P/B Ratio (x) 0.9 0.9 0.8 0.8 0.8 Dividend Yield (%) 0.3 0.4 0.0 0.4 0.3 ROAE (%) 8.9 1.1 (0.1) 0.9 0.8

Source: Company (2018-2019), Mandiri Sekuritas (2020-2022)

ANTM RESULTS SUMMARY FYE Dec (Rpbn) 2Q20 2Q19 %YoY 1Q20 %QoQ 6M20 6M19 chg yoy FY20F % of mansek Consensus Revenue 4,024 8,207 -51% 5,203 -23% 9,226 14,426 -36% 23,845 39% 34%

COGS (3,276) (6,870) -52% (4,641) -29% (7,917) (12,054) -34% (20,672) 38% 32%

Gross Profit 747 1,337 -44% 562 33% 1,309 2,373 -45% 3,173 41% 45%

Operating Income 314 435 -28% 138 128% 451 740 -39% 312 145% 123%

Pretax Income 469 308 52% (336) n.a 133 578 -77% (29) n.a 631%

Net Income 367 194 89% (282) n.a 85 366 -77% (22) n.a 98%

Gross Margin (%) 18.6 16.3

10.8

14.2 16.4

13.3

Operating Margin (%) 7.8 5.3

2.6

4.9 5.1

1.3

Net Margin (%) 9.1 2.4

(5.4)

0.9 2.5

(0.1)

Source: Company, Mandiri Sekuritas estimates

Ariyanto Kurniawan (+6221 5296 9682) [email protected] Wesley Louis Alianto (+6221 5296 9510) [email protected]

CORPORATE



Bank Tabungan Negara: 1H20 Results – A Turning Point in 2Q20 (BBTN; Rp1,210; Buy; TP: Rp1,350)

BTN’s net profit declined -41% YoY in 1H20, but improvement in operating income is seen in 2Q20, which should continue. NIM has stabilized at 3.0% in 1Q and 2Q20, and is anticipated to rise, while restructured loans for COVID-19 related are nearly done at 14.5% of total loans. New operating guideline for 2020 is revealed.

BTN recorded Rp768bn net profit in 1H20, down 41% YoY, accounting for 62%/88% of our/consensus expectations. Income growth was already at the negative territory from the top line and additional provisioning exacerbated the bottom line. Net profit in 2Q20 declined -32% QoQ/-47% YoY to Rp310bn, with improvement seen in operating income. PPOP declined -9% YoY to Rp2tn in 1H20, but on quarterly basis, it increased 11% YoY/+31% QoQ to Rp1.13tn in 2Q20.

Loan growth was flat YoY/-1% QoQ and deposits growth was at +3% YoY/+2% QoQ. Housing-related loans now account for 91% of total loans, growing at +1% YoY, mainly on subsidized housing loans at +6% YoY, while non-subsidized housing loans were at -2% YoY, other housing at -10% YoY, and construction loans at -6% YoY. Non-housing loans make up 9% of total loans, growing at -6% YoY in Jun-20, mainly on consumer loans at -3%, commercial loans at -14%, and corporate loans at +14% YoY. Of the deposits, BBTN managed to achieve double-digit growth on demand deposits, increasing its CASA portion to 41% of total deposits, from 40% a year earlier. Liquidity improved with LDR declining to 111% from 114% in Jun-19 and Mar-20.

NIM declined to 3.01% in 1H20 from 3.4% in 1H19. We believe the higher portion of subsidized housing loans was the main reason for the NIM reduction. This level seems to be at the bottom already, with NIM stabilizing at 3.0% in 2Q20 and 1Q20.

Asset quality improving with NPL of 4.71%, down from 4.91% in Mar-20 (NPL in subsidized housing loans at 1.23%, in non-subsidized housing loans at 4.24%, in construction loans at 18.44%, in commercial loans at 12.47%), with SML also declining to 12.9% from 13.7% over the same period. Provisioning expenses increased 115% YoY in 1H20, with cost of credit of 0.8% vs. 0.4% in 1H19. Total restructured loans are 20.7% in June, up from 8.3% in March, while NPL coverage ratio increased to 108% from 106% in March.

Key takeaways from the analyst meeting:

− Loan growth is picking up, restructured loans are slowing down. July saw loan disbursement similar to June, mainly on the subsidized housing loans. Non-subsidized housing loans are improving as well, in particular the lower-end segment, while the government plans to subsidize mortgage for 21–70-sqm houses. COVID-19-related loan restructuring reached Rp36.46tn (14.5% of total loans) for 231k borrowers in Jun-20, wherein its demand has started to decline since June. Grace period is given for customers for one year on principal and interest payments. At the worst case scenario, the bank expects up to 40% of total loans need to be restructured, but with 80% of the customers being fixed-income earners, this is an unlikely case.

− Relapse ratio expected at 20%. Of the restructured loans, the management expects 20% of them to be downgraded post the loan rescheduling. This is the reason the bank still puts substantial provisioning in 2020, at 25-30% of the COVID-19-related restructured loans.

− Network consolidation in 2H20. BTN will close down 115 of the total 905 in its network as of Jun-20, as many of its customers have turned to mobile and internet banking for daily banking transactions.

− 2020 targets: loan growth of 5-6%, deposit growth of 8-9%, NIM of 3.3-3.5%, NPL of 4.5%, ROE of 7-8%, ROA of 0.4-0.5%, coverage ratio of 105-106%, CIR of 55%, and CAR of 16-18%.



BBTN 1H20 RESULTS Income Statement (Rp bn)

6M19 6M20 YoY 2Q19 1Q20 2Q20 YoY QoQ FY20 % FY20 Cons

%

Net interest income 4,715 4,439 (6) 2,315 2,179 2,260 (2) 4 9,930 45 Non-interest income: 1,100 1,049 (5) 500 460 589 18 28 1,984 53

Fees and Comms. 605 460 (24) 289 231 229 (21) (1) 1,022 45

Forex (3) (3) (20) (3) (6) 4 (227) (157) 6 (45)

Others 498 592 19 214 235 357 66 52 956 62

Operating income 5,815 5,488 (6) 2,815 2,640 2,849 1 8 11,914 46 11,755 47 Provision expense (482) (1,036) 115 (229) (431) (605) 164 40 (2,588) 40

Operating expenses: (3,619) (3,497) (3) (1,798) (1,777) (1,719) (4) (3) (7,806) 45

Personnel Expenses (1,353) (1,354) 0 (643) (682) (672) 5 (1) (2,449) 55

Other Expenses (2,266) (2,143) (5) (1,155) (1,096) (1,047) (9) (4) (5,357) 40

Operating profit 1,714 956 (44) 788 431 524 (33) 22 1,520 63 1,259 76 PPOP 2,196 1,992 (9) 1,017 862 1,130 11 31 4,108 48

Pre-tax profit 1,695 963 (43) 774 586 376 (51) (36) 1,531 63 1,247 77 Net profit 1,306 768 (41) 583 457 310 (47) (32) 1,236 62 869 88

Balance Sheet (Rp bn) Jun-20 Mar-20 Jun-20 YoY QoQ Gross loans

251,041 253,252 251,837 0 (1)

Demand deposit

51,952 53,026 59,424 14 12

Saving deposit

37,064 36,889 34,160 (8) (7)

Time deposit

130,742 131,804 132,738 2 1

Total deposits

219,758 221,719 226,322 3 2 CASA to deposits (%)

40.5 40.6 41.3

Ratio (%) 6M19 6M20 2Q19 1Q20 2Q20 CAR 17.0 19.1

17.0 18.7 19.1

Tier 1 CAR 15.1 12.5

15.1 11.5 12.5

LDR 114.2 111.3

114.2 114.2 111.3

NIM 3.38 3.01

3.33 3.00 3.01

ROE 10.7 8.0

9.5 9.1 8.0

NPL, cat.3-5 3.32 4.71

3.32 4.91 4.71

Special mention loans 11.1 12.9

11.1 13.7 12.9

Cost of credit 0.4 0.8

0.4 0.7 1.0

Loan loss coverage 38 108

38 106 108

Restructured loans 9.3 20.7

9.3 8.3 20.7

Loan at risk 17.1 30.7

17.1 20.7 30.7

Cost to Income 62.2 63.7

63.9 67.3 63.7

Source: Company, Mandiri Sekuritas estimates

Tjandra Lienandjaja (+6221 5296 9617) [email protected] Silvony Gathrie (+6221 5296 9544) [email protected] Ciputra Development 2Q20: Net Loss on Interest and Tax Erosion (CTRA; Rp610; Buy; TP: Rp1,120)

CTRA booked reasonably sound revenue in 2Q20, translating to 1H20 revenue of IDR 2.8tn, 43% of our and consensus’ full-year forecast, broadly in-line given seasonality. This was helped largely by landed unit and land plot sales recognition. However lower margins dragged by the recurring business and interest and tax expenses eroded profitability leading to a net loss in 2Q20, and 1H20 net profit of just 19%/20% of our/consensus’ full-year forecasts.

Landed housing and land plots supported revenue. CTRA’s 2Q20 revenue amounted to IDR 1.3tn, -14% qoq and yoy, respectable amid 2Q20’s conditions as it was supported by landed housing and land plot sales revenue recognition, increasing 11% and 315% respectively yoy. These had largely mitigated the fall in recurring revenues as shopping centre rents were discounted and hotels saw massive occupancy decline. 1H20 was IDR 2.8tn, -11% yoy, 43% of our and consensus’ full-year estimates, broadly in-line given seasonality.



Margins declined but remained broadly stable. Blended gross margin was on the lower side in 2Q20 in 1H20 as higher contribution from landed units and land plot earnings were offset by the decline in recurring income gross margins, including gross loss at the hotel business. Additionally, opex savings were insufficient and led to a yoy decline of just 2%, leading to a fall in blended operating margin qoq although flat yoy at 16%.

Interest and tax expense erosion. Effective interest rates on loans fell to 8% on a blended, annualized basis in 2Q20, owing to the interest environment of the quarter, compared to 8.9% and 10% in 1Q20 and 2Q19 respectively. This led to a 10% qoq and 14% yoy fall in interest expense in 2Q20. Nonetheless, erosion from interest costs and final tax expense eroded profitability and resulted in net loss of IDR 8bn in 2Q20. Accumulated, 1H20 net profit amounted to IDR 170bn, -43% yoy, 20% of our full year forecast and 19% of consensus, below expectations’.

Maintain Buy. We maintain Buy on CTRA despite the weak 2Q20 set of results, which was within expectations given 2Q20 conditions. CTRA trades at 85 discount to NAV, 1.8 standard deviations below 2008-2020 mean at 58%.

2Q20 RESULTS VS ESTIMATES

IDRbn 1Q20 2Q20 2Q19 QoQ % YoY% 6M19 6M20 YoY% 2020F 2020C % of target

% of cons

Revenue 1,510 1,295 1,499 -14% -14% 3,145 2,804 -11% 6,590 6,512 43% 43% Gross profit 708 589 635 -17% -7% 1,489 1,297 -13% 3,278 3,168 40% 41% Operating profit 336 205 245 -39% -16% 752 540 -28% 1,748 1,708 31% 32% Pretax profit 240 18 82 -93% -78% 436 257 -41% 1,186 1,242 22% 21% Net profit 178 (8) 13 -105% -160% 296 170 -43% 832 885 20% 19% Gross margin 47% 45% 42% 47% 46% 50% 49% Operating margin 22% 16% 16% 24% 19% 27% 26% Pretax profit 16% 1% 5% 14% 9% 18% 19% Net margin 12% -1% 1% 9% 6% 13% 14% Debt 9,357 9,272 8,795 8,795 9,272 Equity 16,910 17,043 16,787 16,787 17,043 Cash 4,243 3,810 3,362 3,362 3,810 Net gearing 30.2% 32.0% 32.4% 32.4% 32.0% Revenue breakdown Revenue 1,510 1,295 1,499 -14% -14% 3,145 2,804 -11% Landed 780 749 675 -4% 11% 1,553 1,529 -2% Apartments 15 12 220 -23% -95% 365 27 -92% Offices 220 68 104 -69% -35% 217 288 33% Land lots 41 245 59 494% 315% 122 286 135% Shopping centres 190 87 193 -54% -55% 383 277 -28% Hotels 97 16 101 -83% -84% 210 114 -46% Others 166 117 147 -29% -20% 295 283 29% GPM 46.9% 45.5% 42.4% 47.3% 46.2% Landed 50.4% 46.7% 40.3% 48.5% 48.6% Apartments 24.3% 23.8% 30.2% 33.0% 24.1% Offices 24.2% 39.3% 36.7% 37.0% 27.7% Land lots 58.6% 57.0% 59.6% 66.7% 57.2% Shopping centres 63.9% 34.0% 59.7% 61.3% 54.6% Hotels 36.0% -37.9% 36.0% 37.5% 25.5% Others 47.0% 39.0% 48.6% 47.7% 43.7% Opex Selling (282) (320) (318) 13% 1% (588) (602) 2% G&A (91) (64) (72) -30% -11% (149) (154) 4% Interest expense (208) (187) (217) -10% -14% (435) (395) -9% Interest on cust. adv. 61 48 58 -22% -19% 105 108 2%

Source: Company, Bloomberg, Mandiri Sekuritas estimates

Robin Sutanto (+6221 5296 9572) [email protected]



Harum Energy: Cost Cutting helps Support Bottom line (HRUM; Rp1,235; Neutral; TP: Rp1,300)

HRUM’s 1H20 net profit was above forecast due to aggressive cost cutting initiatives amid weak coal price outlook. The acquisition of minority interest in nickel mining company could signal the potential for greater investment in nickel sector in the future.

1H20 net profit was above. HRUM’s strong 2Q20 net profit of USD 21.1mn (+235% YoY/+2470% QoQ) was driven by USD 13.2mn other income, including gain on forex and change in fair value of financial assets. Excluding other income, we estimate its 1H20 net profit was USD 8.7mn (-31% YoY), accounting for 89% of our forecast and 67% of consensus. 1H20 revenue declined to USD 103mn (-27%YoY) due to a combination of lower ASP (-11% YoY) and lower sales volume (-19% YoY). However, we estimate cash cost ex-royalty declined to USD 34/ton (-13% YoY), as SR also declined to 9.3x (vs. 11x in 1H19), which has led to lower mining costs (-16% YoY). As such, operating margin improved to 13.1% (vs. 12.9% in 1H19) despite lower ASP. While we think lower cost structure is positive for HRUM to mitigate low coal price, we do not see meaningful improvement in earnings in 2H20 due to still weak coal price outlook.

Key points to highlight in 2Q20: 1) ASP declined to USD 55.3/ton (-15% YoY/-9% QoQ), largely in-line with low coal prices’ benchmark in 2Q20, while sales volume was at 0.7mn (-30% YoY/QoQ), bringing the YTD number to 1.7mn (38% of our FY20 target). 2) We estimate production cash-cost/ton-ex-royalty declined to USD 31.6/ton (-15% YoY/-9% QoQ) due to a combination of lower overburden expense and average fuel price. 3) Lower 2Q20 SR at 9.0x (vs. 2Q19s: 12.8x) was necessary to cushion the impact of lower price. 4) HRUM purchased the shares of an Australian stock exchange listed company, Nickel Mines Limited (NIC), as part of its diversification effort with a total purchase price of USD 26.1mn in 2Q20, which represents a 3.72% stake in the company.

Cash rich coal player. HRUM is known for its cash rich balance sheet, which recorded USD 9.8mn net increase in cash level to USD 236mn, higher than its market cap of USD 215mn. However, we reiterate our Neutral call on HRUM, mainly due to still weak coal price outlook.

FINANCIAL SUMMARY YE Dec (US$ Mn) 2018A 2019A 2020F 2021F 2022F EBITDA 61 34 33 29 23 Net Profit 32 19 17 14 10 Fully-diluted EPS 1.2 0.7 0.7 0.5 0.4 Fully-diluted EPS growth (%) (28.0) (41.8) (5.9) (21.7) (28.6) P/E Ratio (x) 6.9 12.4 12.7 16.4 23.0 EV/EBITDA (x) 1.5 2.6 0.4 0.2 (0.2) P/B Ratio (x) 0.7 0.7 0.7 0.7 0.7 Dividend Yield (%) 7.9 4.5 4.3 3.4 2.4 ROAE (%) 10.3 6.0 5.5 4.2 3.0

Source: Company (2018-2019), Mandiri Sekuritas (2020-2022)

HRUM QUARTERLY RESULTS

in US$mn 2Q20 2Q19 %YoY 1Q20 %QoQ 6M20 6M19 %YoY FY20F %

ours % to

cons. Revenue 41.4 67.7 -39% 61.2 -32% 102.5 139.8 -27% 226 45% 40% COGS (27.3) (50.0) -45% (43.9) -38% (71.2) (102.2) -30% (175) 41% 35% Gross profit 14.1 17.7 -20% 17.2 -18% 31.3 37.6 -17% 52 61% 59% Operating expenses (9.0) (9.2) -2% (8.9) 2% (17.9) (19.6) -9% (36) 49% 38% Operating profit (loss) 5.1 8.5 -40% 8.4 -40% 13.5 18.0 -25% 15 88% 239% Net profit (loss) 21.1 6.3 235% 0.8 2470% 21.9 12.7 73% 10 223% 168% Gross margin 34.1% 26.1%

28.2%

30.6% 26.9%

22.8%

Operating margin 12.3% 12.6%

13.7%

13.1% 12.9%

6.8%

Net margin 51.0% 9.3%

1.3%

21.4% 9.1%

4.3%

Coal sales (Mt) 0.7 1.0 -30% 1.0 -30% 1.7 2.1 -19%

ASP (US$/t) 55.3 64.8 -15% 60.5 -9% 56.5 63.2 -11%

Cash cost - Ex Royalty (US$/t) 31.6 40.5 -22% 35.7 -12% 34.0 39.0 -13%

SR (x) 9.0 12.8 -30% 9.6 -6% 9.3 11.0 -15%

Source: Company, Mandiri Sekuritas Estimates

Ariyanto Kurniawan (+6221 5296 9682) [email protected] Wesley Louis Alianto (+6221 5296 9510) [email protected]



Indofood CBP: Conference Call Takeaways: 2Q20 Results (ICBP; Rp9,300; Buy; TP: Rp10,300)

Strong portfolio in In-Home categories and favorable raw material prices in instant noodles managed to offset the unsurprisingly poor performance in Out-of-Home categories, while downtrading was hardly an issue given ICBP’s acceptable pricing points. Guidance was not updated, though trend reversal in In-Home and Out-of-Home categories are likely gradual given the current COVID-19 situation. Maintain our Buy call with Rp10,300 PT.

More colors on 2Q20 results

− Excluding non-core items, adjusted 2Q20 core PATMI growth was +26.9%/+23.2% YoY in 2Q20/1H20 against reported PATMI growth of +12.8%/+31.2% YoY. About Rp241bn in FX losses were booked in 2Q20 against Rp542bn FX gain in 1Q20 and Rp24bn FX loss in 2Q19. See previous report for 2Q20 result analysis.

− 2Q20 earnings beat was driven by instant noodles, snack foods, and food seasonings. These three more than offset steep raw material increases in dairy and poor performance of ICBP’s Out-of-Home categories.

− SG&A efficiencies were seen in A&P and Distribution, respectively down 11% and 27% YoY in 2Q20. Regardless, 2Q20 total SG&A-to-sales still increased 1.6 ppt YoY and QoQ.

General demand overview

− With a 4.1% YoY in 1H20 revenues, ICBP outperformed the industry, which is estimated by Nielsen to deliver YoY declines of -0.7% in value and -6.6% in volume. Such outperformance was helped by ICBP’s strong brand equity, generally acceptable pricing points across income segments (downtrading is hardly seen at ICBP), and strong portfolio of In-Home categories (i.e. Instant Noodles, Food Seasonings, Snacks) outweighing Out-of-Home (i.e. Beverages, Nutrition & Special Foods). Segmental market shares were said to be stable.

− Reopening should not have immediate trend changes between Out-of-Home and In-Home categories, considering the current COVID-19 situation. Capacity limitations remain in place at F&B outlets, limiting the foot traffic recovery post-reopening.

Instant Noodles: above

− Revenue growth was 5.0% YoY in 2Q20 with around 3% YoY volume growth, both at comparable YoY run rates previously booked in 1Q20. 1H20 revenues/volume came slightly ahead of our estimates with FY20 realizations of 52%/53%. Pantry-stocking did not last long and mainly occurred at MT, yet affordable pricing points and being an In-Home proxy helped.

− EBIT margin bounced to 24.8% in 2Q20 from 20.5% in 1Q20 and 21.6% in 2Q19, contributing to the strong 21.8% YoY growth in 2Q20 EBIT. This brought 1H20 EBIT to Rp3,496bn (+12.0% YoY; 53% of our FY20) and EBIT margin to 23.3% (our FY20: 21.4%). Margin strength is attributed to sequentially favorable prices of fresh raw materials and cooking oil, while wheat flour was flat. Worth noting, however, that some raw materials have started going up recently.

Dairy: in-line

− 2Q20 revenue declined -0.5% YoY with flat YoY volume, weaker than the 6% volume growth achieved in 1Q20. 1H20 revenue therefore only increased 3.2% YoY to Rp4,202bn with a 3% YoY growth in volume, both meeting 51% of our FY20. Both liquid and sweetened condensed milk were said to deliver good growth, while the industry growth was said to be around mid-SD for both.

− Implied average unit pricing was still up 1.0% sequentially in 2Q20 and flat YoY in 1H20, suggesting relatively healthy pricing strategy despite the aggressiveness of several competitors in 2Q20. EBIT margin nonetheless dropped substantially to 7.5% in 2Q20 from 17.0% in 1Q20, primarily driven by increase in weighted average raw material costs resulting from the increases in skimmed milk powder and sugar. The timing of raw material shipments and pricing, and SG&A trend were not elaborated. Regardless, 1H20 EBIT still met our estimate with 51% achievement to FY20.

Snack Foods: above

− Revenue declined 2.9% YoY in 2Q20 because of -1.3% YoY in volume, though this is not a comparable analysis, as biscuit got discontinued in 2H19. Ex-biscuit, volume had +5% YoY in 2Q20 vs. +24% YoY in 1Q20, bringing 1H20 to +14% YoY. Both revenues and volume slightly exceeded our estimate with 53% full-year realization. EBIT margin declined to 5.8% in 2Q20 from 12.6% in 1Q20.

https://www.mandirisekuritas.co.id/r/H8fO



Food Seasonings: above

− Revenue growth was 24.4% YoY in 2Q20 with a solid 17.7% YoY volume growth, albeit weaker than 1Q20’s +27.5% YoY. Considered an In-Home proxy, its revenue and volume significantly beat our estimate with 1H20 meeting 67% of our FY20. This translated to a strong sequential jump in EBIT margin to 15.2% from 7.3% in 1Q20, with 1H20 EBIT already achieving 96% of our FY20.

Nutrition and Special Foods: below

− 2Q20 revenue at +1.8% YoY, while volume fell 17.1% YoY, missing estimates with 1H20 revenue/volume achieving just 45%/40% of our FY20. EBIT margin was relatively stable, up 0.9 ppt QoQ to 6.3% with 1H20 EBIT meeting 88% of our FY20.

Beverages: below

− As an Out-of-Home proxy, beverages’ 2Q20 revenue dropped the most at -52.3% YoY with volume decline of around 36% YoY. As such, 1H20 revenues and volume only met 33% and 44% of our FY20, respectively. Such weakness translated down into operating loss in 2Q20 at 19.0% of revenues after booking two straight quarters of positive EBIT. That said, 1H20 EBIT achieved just 17% of our FY20.

ICBP’S 2Q20 RESULT SUMMARY

P&L (Rp bn) 6M20 6M19 YoY 2Q20 2Q19 YoY 1Q20 QoQ % of Mansek

% of Consensus

Revenue 23,047 22,130 4.1% 11,041 10,874 1.5% 12,007 -8.0% 52% 50% Gross profit 8,331 7,512 10.9% 4,148 3,724 11.4% 4,183 -0.8% 56% 54% EBIT 4,340 3,779 14.8% 2,145 1,851 15.9% 2,195 -2.3% 59% 53% Net profit 3,378 2,575 31.2% 1,396 1,238 12.8% 1,982 -29.6% 63% 60% Margins Gross 36.1% 33.9% 2.2% 37.6% 34.2% 3.3% 34.8% 2.7%

EBIT 18.8% 17.1% 1.8% 19.4% 17.0% 2.4% 18.3% 1.1%

Gross revenue breakdown

Noodles 15,493 14,573 6.3% 7,554 7,121 6.1% 7,939 -4.9% 54%

Dairy 4,274 4,073 4.9% 2,034 2,019 0.7% 2,240 -9.2% 52%

Food Seasonings 1,622 1,275 27.2% 767 602 27.5% 855 -10.2% 86%

Snack Foods 1,456 1,413 3.1% 687 699 -1.8% 769 -10.7% 54%

Nutrition and Special Foods 485 447 8.3% 228 225 1.8% 256 -10.8% 45%

Beverage 661 976 -32.3% 249 522 -52.3% 412 -39.6% 33%

EBIT breakdown Noodles 3,496 3,122 12.0% 1,871 1,536 21.8% 1,625 15.1% 55%

Dairy 534 650 -17.8% 154 315 -51.2% 381 -59.7% 53%

Food Seasonings 179 150 18.9% 116 75 54.4% 63 85.8% 96%

Snack Foods 136 (63) -317.3% 40 (34) -216.3% 97 -59.0% -304%

Nutrition and Special Foods 28 20 44.4% 14 11 35.9% 14 4.6% 88%

Beverage (30) (100) -69.8% (47) (53) -11.3% 17 -377.3% 17%

EBIT margin (gross sales)

Noodles 22.6% 21.4% 1.1% 24.8% 21.6% 3.2% 20.5% 4.3%

Dairy 12.5% 16.0% -3.5% 7.5% 15.6% -8.0% 17.0% -9.5%

Food Seasonings 11.0% 11.8% -0.8% 15.2% 12.5% 2.6% 7.3% 7.8%

Snack Foods 9.4% -4.4% 13.8% 5.8% -4.9% 10.6% 12.6% -6.8%

Nutrition and Special Foods 5.8% 4.4% 1.5% 6.3% 4.7% 1.6% 5.4% 0.9%

Beverage -4.6% -10.3% 5.7% -19.0% -10.2% -8.8% 4.1% -23.1%


ICBP’S QUARTERLY PERFORMANCE BY SEGMENTS Instant noodles 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2019A 2020F % (A/F) Revenues 7,285 6,957 6,905 5,885 7,722 7,308 27,031 28,689 52% YoY 13.4% 15.4% 6.7% 1.3% 6.0% 5.0% 9.3% 6.1% EBIT 1,586 1,536 1,668 1,289 1,625 1,871 6,079 6,304 55% YoY 13.5% 27.9% 20.2% -3.0% 2.4% 21.8% 14.4% 3.7%

EBIT margin 21.3% 21.6% 23.5% 21.3% 20.5% 24.8% 21.9% 21.4%

Dairy 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2019A 2020F % (A/F) Revenues 2,053 2,019 1,922 2,052 2,194 2,008 8,046 8,178 51% YoY 9.1% 5.8% -5.8% 20.1% 6.9% -0.5% 6.7% 1.6% EBIT 335 315 230 260 381 154 1,140 1,003 53% YoY 52.7% 43.7% -18.0% 249.2% 13.5% -51.2% 43.7% -12.1% EBIT margin 16.3% 15.6% 12.0% 12.7% 17.0% 7.5% 14.2% 12.3%



Food Seasonings 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2019A 2020F % (A/F) Revenues 538 472 452 332 679 587 1,794 1,896 67% YoY 133.2% 97.5% 158.9% 11.0% 26.0% 24.4% 90.2% 5.7%

EBIT 75 75 57 13 63 116 220 186 96% YoY 150.4% 150.1% 74.3% -65.8% -16.6% 54.4% 69.8% -15.6%

EBIT margin 11.2% 12.5% 9.5% 2.6% 7.3% 15.2% 9.4% 7.5%

Snack Foods 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2019A 2020F % (A/F) Revenues 703 681 643 534 743 661 2,561 2,674 53% YoY -2.2% -1.5% 8.0% 2.1% 5.8% -2.9% 1.3% 4.4%

EBIT (29) (34) (2) 22 97 40 (43) (45) -304% YoY -784.4% 54.2% -97.2% -119.1% -437.5% -216.3% -78.5% 5.0%

EBIT margin -4.0% -4.9% -0.3% 3.9% 12.6% 5.8% -1.6% -1.6%

NSF 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2019A 2020F % (A/F) Revenues 223 225 251 282 256 228 981 1,081 45% YoY 6.6% 20.8% 17.4% 23.3% 14.9% 1.8% 17.1% 4.4%

EBIT 9 11 8 14 14 14 41 32 88% YoY 7.3% -2.9% 29.9% 160.5% 54.5% 35.9% 35.5% -22.7%

EBIT margin 4.0% 4.7% 3.0% 5.1% 5.4% 6.3% 4.2% 3.0%

Beverages 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2019A 2020F % (A/F) Revenues 454 522 487 422 412 249 1,884 2,012 33% YoY 8.9% -1.3% -6.8% 15.6% -9.2% -52.3% 2.8% 6.8%

EBIT (47) (53) (67) 7 17 (47) (160) (181) 17% YoY 1.3% -52.7% -8.9% -110.6% -136.4% -11.3% -46.6% 13.2%

EBIT margin -10.3% -10.2% -13.8% 1.7% 4.1% -19.0% -8.5% -9.0%


Adrian Joezer (+6221 5296 9415) [email protected] Riyanto Hartanto (+6221 5296 9488) [email protected] Lakshmi Rowter (+6221 5296 9549) [email protected] Indofood: 2Q20 Results Call Takeaways (INDF; Rp6,475; Buy; TP: Rp8,450)

Strong earnings delivery at ICBP managed to offset the weak EBIT of Bogasari and Agribusiness, though the overall volume of the former remained surprisingly resilient despite the challenging situation for MSMEs. We have Buy rating on INDF with Rp8,450 price target.

More colors on 2Q20 results

− INDF’s 2Q20 PATMI growth of 20.3% YoY was predominantly driven by the strong operational performance of ICBP, offsetting weak Bogasari and Agribusiness divisions. Excluding FX gain of Rp286bn in 2Q20 and other non-core items, we derived its core PATMI growth at +13.5% YoY in 2Q20 and 19.1% YoY in 1H20. For more detailed analysis on the results trend, refer to the previous report.

− Consumer brand products under ICBP predominantly contributed to the earnings beat at INDF level, offsetting the weak performance at Bogasari and Agribusiness. Rising input costs affected flour margin, though the overall volume was surprisingly resilient despite the challenging situation for MSMEs in 2Q20. A separate report is published for ICBP’s call takeaways.

Bogasari: slightly below

− 2Q20 revenue declined by 4.3% YoY, mainly ASP-driven, as volume was flat YoY, similar to 1Q20 volume growth run-rate. This is still surprising to us given the challenging backdrop for MSMEs in 2Q20. With a flat YoY volume in 1H20, ICBP outperformed the industry’s approximate 2% YoY decline.

− There were no ASP adjustments made in 2Q20, likewise in 1Q20, likely contributing to the margin pressures, as input costs have crawled up. EBIT margin plunged by 6.4 ppt QoQ to 3.7% in 2Q20. As such, 2Q20 EBIT declined by 38.7% YoY to Rp211bn with 1H20 EBIT at Rp764bn (-9.7% YoY), meeting 47% of our FY20.

https://www.mandirisekuritas.co.id/r/H8fO

https://www.mandirisekuritas.co.id/r/M9p5



Agribusiness: below

− 2Q20 revenue increased by 12.0% YoY, while EBIT turned positive from a loss in 2Q19, thanks to the CPO price recovery. Upstream EBIT did well, coming in at Rp136bn in 1H20 from a loss of Rp323bn in 1H19, yet downstream (EOF) declined by 36% YoY to Rp196bn given the lower sales volume and higher input costs. Overall 1H20 EBIT came in at 45% of our FY20.

− 1H20 CPO sales volume declined by 11% YoY, given the 7% YoY drop in CPO production affected by the 5% weaker FFB nucleus production, considering the replanting activities in North Sumatra and Riau, and the unfavorable weather impact.

Buy rating with Rp8,450 PT. Our PT is derived from SOTP method, implying 2021 PE of 13.3X.

INDF’S 2Q20 RESULT SUMMARY

P&L (Rp bn) 6M20 6M19 YoY 2Q20 2Q19 YoY 1Q20 QoQ % of Mansek

% of Consensus

Revenue 39,385 38,609 2.0% 20,080 19,439 3.3% 19,305 4.0% 50% 48%

Gross profit 12,479 11,361 9.8% 6,197 5,563 11.4% 6,283 -1.4% 55% 52%

Selling expense 4,453 4,288 3.9% 2,219 2,145 3.4% 2,234 -0.7% 51%

G&A expense 2,715 2,511 8.1% 1,502 1,334 12.6% 1,213 23.8% 56%

EBIT 5,311 4,562 16.4% 2,476 2,084 18.8% 2,835 -12.7% 59% 51%

Pretax profit 4,960 4,236 17.1% 2,501 1,895 32.0% 2,459 1.7% 56% 53%

Net profit 2,843 2,545 11.7% 1,439 1,196 20.3% 1,404 2.5% 54% 54%

Core profit 2,889 2,426 19.1% 1,348 1,187 13.5% 1,542 -12.6% 57%

Margins

Gross 31.7% 29.4% 2.3% 30.9% 28.6% 2.2% 32.5% -1.7%

EBIT 13.5% 11.8% 1.7% 12.3% 10.7% 1.6% 14.7% -2.4%

Net profit 7.2% 6.6% 0.6% 7.2% 6.2% 1.0% 7.3% -0.1%

Gross revenues

Consumer branded products

22,796 21,869 4.2% 11,350 11,046 2.7% 11,446 -0.8% 54%

Flour 11,076 11,600 -4.5% 5,620 5,870 -4.3% 5,456 3.0% 61%

Agribusiness 6,884 6,424 7.2% 3,535 3,156 12.0% 3,349 5.5% 59%

Distribution 2,308 2,079 11.0% 1,183 1,050 12.7% 1,125 5.2% 56%

EBIT Consumer branded products

4,209 3,669 14.7% 2,185 1,848 18.3% 2,024 7.9% 58%

Flour 764 846 -9.7% 211 344 -38.7% 553 -61.9% 47%

Agribusiness 224 (41) -652.9% 57 (152) -137.8% 167 -65.7% 45%

Distribution 85 102 -16.3% 9 44 -79.2% 76 -88.1% 40%

EBIT margin (gross sales)

Consumer branded products

18.5% 16.8% 1.7% 19.3% 16.7% 2.5% 17.7% 1.6%

Flour 6.9% 7.3% -0.4% 3.7% 5.9% -2.1% 10.1% -6.4%

Agribusiness 3.3% -0.6% 3.9% 1.6% -4.8% 6.4% 5.0% -3.4%

Distribution 3.7% 4.9% -1.2% 0.8% 4.1% -3.4% 6.8% -6.0%


Adrian Joezer (+6221 5296 9415) [email protected] Riyanto Hartanto (+6221 5296 9488) [email protected] Lakshmi Rowter (+6221 5296 9549) [email protected]



Media Nusantara Citra: 2Q20 Results - Margins Held Up Well (MNCN; Rp790; Buy; TP: Rp2,200)

MNCN reported 17.5% YoY revenue decline and 17.2% EBITDA decline in 2Q20, not as bad as the rest of the industry. Yet, MNCN booked 5.6% YoY of Net Profit growth in 2Q20, helped by FX loss reversal. Backed with strong signature programming line-up in 2H20, MNCN could potentially regain momentum as economy regains pace in the coming quarters. Retain BUY.

2Q20 Revenues of Rp1.95tn (-17.5% YoY, -3.2% QoQ). Advertisement revenue declined 20.4% YoY in 2Q20, better than SCMA’s 26.6% YoY decline in the same period. Non-digital revenue declined 24.1% YoY in 2Q20, but digital revenue maintained its strong growth at 26.5% YoY. Strong growth in digital revenue can be attributed to company’s effort to push NTC (non-time consuming) ads within its fresh contents. This was supported by strong prime time audience shares at 36.4% in 2Q20 vs. 35.2% in 2Q19. On a 6-month basis, MNC booked Rp3.97tn Revenues in 1H20, down 6.7% YoY vs. in 1H19 and forming 45.3% of consensus FY20 revenue estimate.

2Q20 EBITDA of Rp893bn (-17.2% YoY, -0.2% QoQ). Content costs declined 18.1% YoY in 2Q20 as Euro Cup 2020 was postponed and the company relocated content production into its own studios. G&A expenses also declined 10.8% YoY in 2Q20, driven mainly by Personnel and A&P expenses in absolute basis. As a result, EBITDA margin slightly improved by 17bps to 45.7% in 2Q20. On a 6-month basis, MNC booked Rp1.79tn EBITDA in 1H20, down 6.4% YoY vs. in 1H19 and forming 47.5% of consensus FY20 EBITDA estimate.

Meanwhile, D&A charges increased 10.2% YoY in 2Q20 as the company kept its fresh content production even during local Covid-19 outbreak. As a result, Operating margin declined 160bps to 38.7% in 2Q20. On a 6-month basis, MNC booked Rp1.53tn Operating Profit in 1H20, down 9.3% YoY vs. in 1H19 and forming 44.3% of consensus FY20 Operating Profit estimate.

2Q20 Net Profit of Rp644bn (+5.6% YoY, +106.5% QoQ). MNC booked Rp81bn of non-operating income as the company recorded Rp209bn of FX gain in 2Q20 to offset some FX loss in 1Q20. Meanwhile, effective tax rate slightly increased to 19.3% in 2Q20 vs. 19.0% in 1Q20, but in-line with statutory tax rate. On a 6-month basis, MNC booked Rp956bn Net Profit in 1H20, down 17.4% YoY vs. in 1H19 and forming 45.4% of consensus FY20 Net Profit estimate.

Maintain BUY. MNCN maintained audience share leadership in 2Q20 and is more equipped than peers to defend ad spend share via fresh content production strength in 2H20. Debt reduction is in motion, while gradual economic recovery in coming quarters bode well to FTA TV ad spend growth pick-up in 2H20. Furthermore, the stock trades at an attractive valuation at 4.8x/4.5x PE ‘20F/’21F vs. 11.5x/10.6x PE ‘20F/’21F at SCMA and 13.5x/12.2x PE ‘20F/’21F average of global FTA TV companies.

MNCN: 2Q20 RESULTS

in Rp bn 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY % of FY20F Consensus

Advertisement 2,265 1,812 1,803 -20.4% -0.5% 4,033 3,616 -10.3% Digital 166 199 210 26.5% 5.3% 325 409 25.8%

Non-Digital 2,099 1,613 1,594 -24.1% -1.2% 3,708 3,207 -13.5% Content 453 471 336 -25.7% -28.6% 913 808 -11.5% Others 27 25 34 24.9% 33.0% 55 59 8.5%

(Elimination) (379) (293) (223) 41.3% 24.1% (748) (516) 31.0% Revenue 2,366 2,016 1,951 -17.5% -3.2% 4,252 3,967 -6.7% 45.3%

Direct costs 878 769 719 -18.1% -6.5% 1,579 1,488 -5.7% G&A expenses (inc. D&A) 534 468 476 -10.8% 1.8% 982 945 -3.9%

Operating expenses 1,412 1,237 1,196 -15.3% -3.3% 2,561 2,433 -5.0% Operating profit 954 779 755 -20.8% -3.0% 1,691 1,534 -9.3% 44.3% % margin 40.3% 38.6% 38.7% -160 bps 8 bps 39.8% 38.7% -109 bps D&A 125 116 137 10.2% 18.3% 218 253 16.0% EBITDA 1,078 895 893 -17.2% -0.2% 1,909 1,787 -6.4% 47.5%



in Rp bn 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY % of FY20F Consensus

% margin 45.6% 44.4% 45.7% 17 bps 136 bps 44.9% 45.1% 16 bps

Non-Operating expenses (148) (368) 81 154.8% 553.8% (155) (287) -85.3% Pretax profit 806 411 836 3.8% 103.5% 1,536 1,247 -18.8%

% margin 34.1% 20.4% 42.9% 881 bps 2248 bps 36.1% 31.4% -468 bps

Taxes (171) (78) (161) 5.5% -106.5% (316) (240) 24.2% % effective tax rate 21.2% 19.0% 19.3% -189 bps 28 bps 20.6% 19.2% -136 bps

PAT 635 333 675 6.3% 102.8% 1,220 1,008 -17.4%

% margin 26.8% 16.5% 34.6% 775 bps 1808 bps 28.7% 25.4% -329 bps Minority interest (25) (21) (31) -22.8% -47.6% (62) (51) 17.4%

PATAMI 610 312 644 5.6% 106.5% 1,158 956 -17.4% 45.4% % margin 25.8% 15.5% 33.0% 724 bps 1754 bps 27.2% 24.1% -312 bps Audience share 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY Prime time

RCTI 18.3% 15.3% 15.4% -287 bps 13 bps 19.0% 15.4% -367 bps

MNC TV 9.7% 10.9% 14.0% 433 bps 310 bps 10.2% 12.5% 225 bps GLOBAL TV 7.2% 6.1% 6.9% -27 bps 83 bps 6.9% 6.5% -40 bps Total 35.2% 32.3% 36.4% 120 bps 407 bps 36.2% 34.4% -182 bps Non-Prime Time

RCTI 14.5% 12.7% 13.4% -117 bps 70 bps

MNC TV 9.9% 11.0% 13.1% 313 bps 207 bps GLOBAL TV 9.0% 9.3% 9.1% 13 bps -20 bps Total 33.4% 33.0% 35.5% 210 bps 257 bps Source: Company Data, Mandiri Sekuritas Research estimates

Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected] Medikaloka Hermina 2Q20 Results: Most Resilient Among Peers (HEAL; Rp3,000; Buy; TP: Rp5,200)

Though 2Q20 performance is below expectation, HEAL’s patient volume remains the most resilient among listed peers; its high exposure to JKN and women-children services are the key. We have a Buy call on HEAL.

2Q20 Revenue of Rp748bn (-15.6% YoY) came below estimates, with 1H20 of Rp1.7tn (-3.1% YoY) forming 41%/46% of our/consensus’ FY20 estimates. Inpatient volume declined by 3.6% YoY in 2Q20 and Bed Occupancy Ratio (BOR) dropped to 56.3% (vs. 69% in 1Q20). However, average revenue per inpatient day rose 6.2% YoY to Rp2.4mn, which could have been driven by the various COVID-19 services done by HEAL. The revenue drop is mainly caused by the drop in outpatient volume which declined by 20.7% YoY in 2Q20, though average revenue per visit rose 12% YoY to Rp265,000, which might be affected by COVID-19 tests. JKN and private volume showed similar trends in the inpatient department, though private outpatient volume dropped 29.5% YoY while JKN outpatient volume only dropped 13.5% YoY in 2Q20. Similar trends are seen across hospitals, though HEAL saw the most resilient volume compared to listed peers.

2Q20 Reported EBITDA of Rp150.6bn (-27.8% YoY) came below estimates, and 1H20 Reported EBITDA of Rp 396.6bn (-7.6% YoY) is estimated to form 35%/39% of our/consensus’ FY20 forecasts. Gross margin dropped by 4.9ppt YoY to 40.3% in 2Q20 and overall earnings are weak from the operating deleverage, as overall operating cost was only reduced by 2%



YoY in 2Q20. 2Q20 NPAT of Rp32bn (-52.5% YoY) came below estimates, and 1H20 NPAT of Rp104bn (-16.4% YoY) formed 34%/40% of our/consensus’ FY20 estimates.

HEAL will conduct the 2Q20 earnings call today at 3.15PM JKT time.

2Q20 RESULTS SUMMARY

Rp bn 6M20 6M19 % YoY 2Q20 2Q19 % YoY 1Q20 % QoQ % of MANSEK

% of CONS

Net sales 1,732 1,788 -3.1% 748 887 -15.6% 984 -23.9% 41.4% 46.1%

Gross profit 742 825 -10.1% 301 400 -24.7% 440 -31.6% 38.2% 43.7%

Operational EBITDA* 330 380 -13.0% 110 195 -43.2% 220 -49.8% 34.9% 38.8%

Pretax profit 193 242 -20.5% 46 122 -62.4% 147 -68.9% 32.6% 38.2%

Net profit 104 125 -16.4% 32 68 -52.5% 72 -54.9% 34.3% 39.6%

Gross margin 42.8% 46.1% -3.3% 40.3% 45.1% -4.9% 44.7% -4.5%

EBITDA margin 19.1% 21.2% -2.2% 14.8% 21.9% -7.2% 22.4% -7.6%

Pre-tax margin 11.1% 13.5% -2.4% 6.1% 13.7% -7.6% 14.9% -8.8%

Net margin 6.0% 7.0% -1.0% 4.3% 7.7% -3.4% 7.3% -3.0%

*Operational EBITDA differs from Reported EBITDA by Company

Lakshmi Rowter (+6221 5296 9549) [email protected] Adrian Joezer (+6221 5296 9415) [email protected] Pakuwon Jati: 2Q20: Gross Loss (PWON; Rp396; Buy; TP: Rp670)

PWON booked gross-level losses at its recurring income and landed housing business segments due to tenant discounts and handover delays. 2Q20 saw substantial forex gain for the company which undid most of 1Q20’s forex loss, however on a core basis PWON still booked net loss in 2Q20, posing a drag to 1H20’s core profit. We maintain Buy on PWON despite the weak set of results.

2Q20 revenue -80% qoq, -82% yoy; 1H20 revenue below expectations. All revenue segments saw significant declines: recurring income fell -73% impacted by extensive rental and service charge discounts in 2Q20 with only offices faring relative stably. Development revenue fell more steeply at -91% yoy as handovers could not take place during the lockdown. 1H20 revenue of IDR 2tn was a 44% yoy decline and translated to 36% of our and 35% of consensus’ respective targets.

Gross loss at recurring and landed housing segments. The recurring income booked gross loss due to provision of 10 weeks of free rent in 2Q20 across malls, while hotel revenue decline was almost absolute at -93% qoq and yoy. On the flipside, the company was not able to reduce fixed costs such as utilities, maintenance and salaries by the requisite amount. Landed housing also saw gross loss as only IDR 5bn in handovers took place, which was insufficient in covering cost of sales, translating to minor gross loss of IDR 4bn. PWON’s high-rise segment meanwhile saw stable gross margin at 56%.

Substantial forex gain saves PATMI, core basis loss. 2Q20 saw IDR 457bn in forex gain, unwinding most of IDR 557bn forex loss in 1Q20. This led to IDR 416bn in 2Q20 net profit, +523% qoq but stil -35% yoy. 1H20 net profit was IDR 483bn, -65% yoy, 27% of our full-year estimate and 24% of consensus’. Stripping out non-core items, PWON’s 2Q20 core loss was IDR 85bn, dragging 1H20 core profit to IDR 550bn, -57% yoy and 29% of our full-year forecast.

Maintain Buy. We maintain Buy on PWON despite the set of disappointing results, which should fall within expectations. Gross level losses should recover in the coming quarters as rental collection and handovers resume. PWON currently trades at 68% discount to NAV, 1.7 standard deviations below its 2008-2020 mean of 50%.



2Q20 RESULTS VS ESTIMATES

IDRbn 1Q20 2Q20 2Q19 QoQ % YoY% 6M19 6M20 YoY% 2020F 2020C % of

target % of cons

Revenue 1,651 323 1,794 -80% -82% 3,505 1,974 -44% 5,430 5,655 36% 35%

Gross profit 977 (9) 1,015 -101% -101% 2,002 968 -52% 3,161 3,163 31% 31%

Operating profit 848 (103) 861 -112% -112% 1,728 745 -57% 2,586 2,783 29% 27%

Pretax profit 203 451 690 122% -35% 1,648 654 -60% 2,492 2,488 26% 26%

Net profit 67 416 644 523% -35% 1,365 483 -65% 1,791 2,003 27% 24%

Core 634 (85) 650 -113% -113% 1,286 550 -57% 1,917 29%

Gross margin 59% -3% 57% 57% 49% 58% 56%

Operating margin 51% -32% 48% 49% 38% 48% 49%

Pretax profit 12% 140% 38% 47% 33% 46% 44%

Net margin 4% 129% 36% 39% 24% 33% 35%

Debt 5,027 4,300 5,201 5,201 4,300 4,987

Equity 16,761 17,034 16,500 16,500 17,034 16,474

Cash 4,373 4,003 4,895 4,895 4,003 5,069

Net gearing 3.9% 1.7% 1.9% 1.9% 1.7% -0.5%

Revenue breakdown

Revenue 1,651 324 1,794 -80% -82% 3,505 1,974 -44%

Recurring 898 243 888 -73% -73% 1,775 1,141 -36% Space rental & svc chg

618 164 605 -73% -73% 1,197 783 -35%

Hotels 110 8 106 -93% -93% 227 118 -48% Parking, utilities & others

169 71 177 -58% -60% 352 240 -32%

High-rise 345 76 828 -78% -91% 1,486 421 -72%

Landed 407 5 78 -99% -94% 244 412 69%

GPM 59.2% -2.9% 56.6% 57.1% 49.0%

Recurring 52.2% -19.8% 52.2% 53.4% 36.9%

High-rise 54.4% 55.9% 60.4% 59.5% 54.6%

Landed 78.6% -77.4% 65.6% 70.1% 76.8%


Robin Sutanto (+6221 5296 9572) [email protected] Pembangunan Perumahan: 2Q20 Earnings Beat Our Estimates (PTPP; Rp910; Buy; TP: Rp1,370)

PTPP delivered 2Q20 net profit at Rp2.6bn with 1H20 earnings of Rp15.9bn (-95% YoY), forming 7%/3% of ours/consensus estimates. Construction margin in 2Q20 started to improve, while the overall soft earnings delivery is widely expected due to the pandemic as 24% of the company’s projects were put on pause in April and May. Maintain our Buy recommendation.

2Q20 earnings came above our estimate and slightly below consensus. The company reported 2Q20 net profit of Rp2.6bn (-80.3% QoQ; -98.5% YoY) with 1H20 net profit coming in at Rp15.9bn (-95.4% YoY), translating to 7%/3% of MANSEK/Consensus FY20. The company’s 1H20 earnings were supported by other income of Rp54.3bn (-40.0% YoY), thus in terms of core profit, the company booked 1H20 net loss of Rp38.4bn (1H19: Rp253.3bn).



PTPP booked 2Q20 revenues of Rp3.3tn (-2.1% QoQ; -41.4% YoY) with 1H20 revenues of Rp6.7tn (-36.6% YoY), accounting for 42%/33% of MANSEK/Consensus FY20. We think the 1H20 revenues were considerably ahead of our estimate, as 24% of the company’s total order book was temporarily on hold due to the pandemic, and PTPP’s 1H17-20 revenues contributed an average of 40% to the full-year. We expect an acceleration in 2H20 following the normalization in construction works. Key things to highlight in 2Q20 are as follows:

− Expectedly slow construction service amid di pandemic. The company booked 2Q20 construction service of Rp2.6tn with construction margin improved to 8.0% (1Q20 construction margin: 4.4%). This led to 1H20 construction service revenues of Rp5.3tn (-38.1% YoY).

− Slowing down JV income in 2Q20. The company booked 2Q20 JV income of Rp31.3bn (-77.5% QoQ; 2Q19: +99.1% YoY) as we saw limited progress from the Balikpapan RDMP project of Rp10.9bn (-9.5% QoQ), Meanwhile, Patimban port’s JV income advanced to Rp29.6bn (1Q20: Rp6.1bn), thus, the company posted 1H20 JV income of Rp170.3bn (1H19: Rp34.0bn).

− 2Q20 opex declined to Rp143.7bn (-13.4% QoQ; -44.2% YoY). Following the soft revenues booking, the company’s 2Q20 personnel expense (74% of total opex) declined by 3.6% QoQ/30.5% YoY to Rp229.6bn. In overall, the company’s 2Q20 opex declined by -13.4% QoQ/-44.2% YoY with 2Q20 opex to sales at 4.3% (1Q20: 4.9%).

− Balance sheet remained solid. As of Jun-20, PTPP’s total debt stood at Rp18.4tn (1Q20: Rp18.3tn), translating to gearing of 129%. Note that the company has fully factored in PSAK 71 adoption, which reduced its retained earnings by Rp2.6tn.

Maintain our Buy recommendation with Rp1,370 PT. Our PT of Rp1,370 is derived from 11.5x 2021 PE, lower than the 7Y average 12M forward PE of 13.2x. Key risks: delays in the Balikpapan RDMP project, lower-than-estimated new contracts, and longer-than-estimated COVID-19.

PTPP 2Q20 RESULTS

Rpbn 6M20 6M19 %YoY 2Q20 1Q20 %QoQ 2Q19 %YoY FY20F % of ours

FY20C % of cons.

Revenue 6,746 10,640 -36.6% 3,336 3,409 -2.1 5,692 -41.4 16,107 41.9 20,563 32.8

Gross profit 875 1,497 -41.5% 407 468 -12.9 840 -51.5 1,852 47.2 2,583 33.9

Operating profit 565 1,046 -45.9% 264 302 -12.6 583 -54.7 1,756 32.2 1,934 29.2

Pretax profit 245 845 -71.0% 113 133 -14.9 449 -74.9 857 28.6 1,236 19.8

Net profit 16 344 -95.4% 3 13 -80.3 173 -98.5 219 7.3 548 2.9

Gross margin (%) 13.0 14.1 12.2 13.7 14.8 11.5 12.6

Operating margin (%) 8.4 9.8 7.9 8.8 10.2 10.9 9.4

Pretax margin (%) 3.6 7.9 3.4 3.9 7.9 5.3 6.0

Net margin (%) 0.2 3.2 0.1 0.4 3.0 1.4 2.7

Source: Bloomberg, Company, Mandiri Sekuritas estimates

Edbert Surya (+6221 5296 9623) [email protected] Adrian Joezer (+6221 5296 9415) [email protected] Sarana Menara Nusantara: 2Q20 Results - All-Round Beat (TOWR; Rp1,130; Buy; TP: Rp1,300)

SMN booked revenue/EBITDA/net income YoY growth of 20.6%/25.1%/50.1% in 2Q20, supported by M&A, IFRS 16/PSAK 73, and favorable interest rates. SMN’s YoY growth stats in 2Q20 also turned out the best in the sector, so far. Reiterate BUY.

2Q20 Revenues of Rp1.87tn (+20.6% YoY, +2.5% QoQ) beat our estimate by 1.1%. Tower rental revenue growth accelerated from 14.6% in 1Q20 to 16.2% in 2Q20, backed by acquired tenancies from Indosat & XL Axiata tower deal.



Meanwhile, Non-Tower revenues grew 60.1% YoY in 2Q20, in-line with the larger fiber optic network reach and additional VSAT contracts. SMN closed the quarter with 21,271 tower sites and 38,122 tenants, implying 1.79x tenancy ratio in 2Q20 – up from 1.73x in FY19-end. In terms of tower tenancy additions, SMN gained the most from Indosat, Hutchison, and XL Axiata in 2Q20. Though, in terms of revenue additions, SMN gained the most from Hutchison & XL Axiata in 2Q20 (partly helped by weaker IDR YTD at Hutch level). Implied ARPT declined to Rp14.1mn/month in 2Q20, from Rp14.7mn in 1Q20 – a fairly-expected trend following sale-and-lease back agreements with Indosat and XL Axiata in recent quarters using Rp10mn/month rental rate. On a 6-month basis, SMN booked Rp3.69tn Revenues in 1H20, up 21.7% YoY vs. in 1H19 and forming 49.7%/50.4% of our/consensus FY20 revenue estimates.

2Q20 EBITDA of Rp1.60tn (+25.1% YoY, +2.8% QoQ) beat our estimate by 3.0%. Cash opex declined 1.2% YoY despite larger asset base in 2Q20. The decline is mainly attributable to IFRS 16/PSAK 73 adoption as reflected by the 3.7% YoY decline in direct costs in the quarter. As a result, EBITDA margin increased 309bps YoY to 86.0% in 2Q20. On a 6-month basis, SMN booked Rp3.16tn EBITDA in 1H20, up 26.4% YoY vs. in 1H19 and forming 51.3%/52.5% of our/consensus FY20 EBITDA estimates. EBITDA margin stood at 85.9% in 1H220, up 318bps YoY, supported by IFRS 16/PSAK 73 adoption.

D&A charges jumped 32.8% YoY in 2Q20, explained by IFRS 16/PSAK 73 adoption and SMN’s larger asset base post-acquisition of Indosat & XL Axiata towers. The strong revenue growth, however, ensured operating income up 22.2% YoY to Rp1.14tn in 2Q20. On a 6-month basis, SMN booked Rp2.28tn operating income in 1H20, up 24.9% YoY.

2Q20 Net Profit of Rp782bn (+50.1% YoY, +50.7% QoQ) beat our estimate by 14.3%. Non-operating expenses declined 53.5% YoY in 2Q20, benefitting from the QoQ domestic currency strengthening. Tax expenses came lower than expected in 2Q20, with 1H20 effective tax rate at 14.9% - below the FY20 statutory tax rate of 22%. On a 6-month basis, SMN booked Rp1.30tn Net Profit in 1H20, up 52.5% YoY vs. in 1H19 and forming 52.5%/49.3% of our/consensus FY20 Net Profit estimates. Net margin improved 250bps YoY to 35.3% in 1H20, owing to the strong revenue growth and favorable interest rates.

Reiterate BUY. SMN is on track to meet its guidance of 14%-15% YoY revenue and EBITDA growth guidance as 1H20 performance reflected solid growth execution amidst Covid-19 challenges. Backed with relatively low leverage and continued tenancy growth momentum, SMN still offers better earnings growth visibility than peers in FY20-21. More details to follow after the company’s earnings call tomorrow / 4 Aug ’20 at 5.30PM JKT time.

TOWR: 2Q20 RESULTS

in Rp bn 2Q19 1Q20 2Q20 2Q20F YoY QoQ vs Mansek's

6M19 6M20 YoY vs FY20F Mansek

vs FY20F Consensus

Tower rentals 1,369 1,545 1,582 1,575 15.5% 2.4% 0.4% 2,710 3,126 15.4%

MWIFO & VSAT rentals & services

177 275 284 270 60.1% 3.2% 5.1% 142 559 293.7%

Revenues 1,546 1,820 1,865 1,845 20.6% 2.5% 1.1% 3,028 3,685 21.7% 49.7% 50.4%

COGS 106 100 102 110 -3.7% 1.6% -7.0% 219 202 -7.6%

D&A 348 420 463 439 32.8% 10.1% 5.4% 677 883 30.4%

Gross profit 1,092 1,300 1,301 1,296 19.1% 0.1% 0.3% 2,133 2,600 21.9%

% margin 70.6% 71.4% 69.7% 70.3% -90 bps -168 bps -53 bps 70.4% 70.6% 14 bps

Selling expense 37 40 39 44 5.5% -1.1% -9.6% 76 79 4.5%

G&A 121 119 120 135 -1.0% 0.8% -10.9% 230 240 4.3%

Operating Expenses 159 159 160 179 0.5% 0.4% -10.6% 305 319 4.3%

EBITDA 1,282 1,561 1,604 1,557 25.1% 2.8% 3.0% 2,504 3,164 26.4% 51.3% 52.5% % margin 82.9% 85.7% 86.0% 84.4% 309 bps 23 bps 159 bps 82.7% 85.9% 318 bps

EBITDA less net interest expense

1,046 1,294 1,304 1,261 24.7% 0.8% 3.4% 2,018 2,598 28.8%

Operating Income 933 1,141 1,141 1,118 22.2% 0.0% 2.1% 1,827 2,282 24.9% 51.9% 49.7% % margin 60.4% 62.7% 61.2% 60.6% 81 bps -150 bps 59 bps 60.3% 61.9% 157 bps



in Rp bn 2Q19 1Q20 2Q20 2Q20F YoY QoQ vs

Mansek's 6M19 6M20 YoY vs FY20F

Mansek vs FY20F

Consensus Other Income (Expenses)

(289) (600) (134) (96) -53.5% -77.6% 39.9% (556) (734) 31.9%

PBT 645 541 1,007 1,022 56.2% 86.1% -1.5% 1,271 1,548 21.8% % margin 41.7% 29.7% 54.0% 55.4% 1228 bps 2425 bps -141 bps 42.0% 42.0% 3 bps

Income Tax (124) (15) (216) (330) 74.8% n.a. -34.5% (277) (231) -16.6%

% effective tax rate 19.2% 2.8% 21.5% 32.3% 229 bps n.a. n.a. 21.8% 14.9% -688 bps

Minority Interest - (7) (8) (8) n.a. n.a. n.a. - (15) n.a.

PATAMI 521 519 782 684 50.1% 50.7% 14.3% 994 1,301 31.0% 52.5% 49.3% % margin 33.7% 28.5% 41.9% 37.1% 824 bps 1342 bps 485 bps 32.8% 35.3% 250 bps

Operating Metrics 2Q19 1Q20 2Q20

YoY QoQ

6M19 6M20 YoY

Tenants (#) 29,153 36,778 38,122

30.8% 3.7%

29,153 38,122 30.8%

Net add 1,000 3,432 1,344

834 4,776

Tower sites (#) 18,152 20,914 21,271

17.2% 1.7%

18,152 21,271 17.2%

Net add 296 1,595 357

715 1,952

Tenancy ratio (x) 1.61 1.76 1.79

1.61 1.79

ARPT (Rp mn / month); Implied

15.9 14.7 14.1

-11.6% -4.2%

15.7 14.6 -7.2%

Revenue breakdown 2Q19 1Q20 2Q20

YoY QoQ

6M19 6M20 YoY

Hutchison 3 508 555 632

24.2% 13.8%

988 1,186 20.0%

XL Axiata 456 509 571

25.2% 12.2%

884 1,080 22.2%

Telkomsel 275 285 259

-5.9% -9.1%

559 544 -2.7%

Indosat 94 173 185

97.6% 7.4%

196 358 83.0%

Others 213 299 219

2.5% -26.8%

402 517 28.8%

Total Revenues (Rp bn)

1,546 1,820 1,865

20.6% 2.5%

3,028 3,685 21.7%

Hutchison 3 32.9% 30.5% 33.9%

32.6% 32.2%

XL Axiata 29.5% 28.0% 30.6%

29.2% 29.3%

Telkomsel 17.8% 15.6% 13.9%

18.5% 14.8%

Indosat 6.1% 9.5% 9.9%

6.5% 9.7%

Others 13.8% 16.4% 11.7%

13.3% 14.0%

Total Revenues (% mix)

100% 100% 100%

100% 100%

Telecommunication sites breakdown 2Q19 1Q20 2Q20 YoY QoQ 6M19 6M20 YoY

XL Axiata 10,353 12,198 12,484

20.6% 2.3%

10,353 12,484 20.6%

Hutchison 3 8,705 10,826 11,115

27.7% 2.7%

8,705 11,115 27.7%

Telkomsel 6,029 6,486 6,572

9.0% 1.3%

6,029 6,572 9.0%

Indosat 2,294 4,168 4,739

106.6% 13.7%

2,294 4,739 106.6%

Smartfren 1,387 2,493 2,605

87.8% 4.5%

1,387 2,605 87.8%

Others 385 607 607

57.7% 0.0%

385 607 57.7%

Total 29,153 36,778 38,122

30.8% 3.7%

29,153 38,122 30.8%

Source: Company Data, Mandiri Sekuritas Research estimates

Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected]



Waskita Beton: 2Q20 Results – Below Expectations (WSBP; Rp186; Buy; TP: Rp242)

WSBP reported 2Q20 net loss of Rp99.4bn with 1H20 earnings of Rp5.2bn, largely below our/consensus estimates at 1%. Despite slow revenues booking due to the pandemic, 2Q20 opex increased, partially driven by festive allowance. Inventory level along with inventory days also increased due to slower construction progress affected by COVID-19.

2Q20 earnings came below expectations. WSBP booked 2Q20 net loss of Rp99.4bn (1Q20 net profit: Rp104.6bn; 2Q19 net profit: Rp90.2bn) and 6M20 earnings of Rp5.2bn (-98.6% YoY), translating to 1% of MANSEK/Consensus FY20 estimates—largely below.

It booked 2Q20 revenues of Rp347.3bn (-53.9% QoQ; -78.6% YoY) with 1H20 revenues at Rp1.1tn (-71.2% YoY), accounting for 25%/16% of MANSEK/Consensus FY20 estimates—below. The soft revenues generation was primarily driven by low plant utilization, which hovered around 30-40% of normal condition due to the pandemic. Key things to highlight in 2Q20 results are as follows:

− Still driven by WSKT-related group projects. In 2Q20, its parent-related group revenues contributed 81% to total revenues (1Q20: 79%; FY19: 68%) despite a slowdown in the construction works for some of WSKT’s projects in Greater Jakarta area during the pandemic.

− Rising inventory. WSBP’s inventory rose to Rp2.9tn in end-Jun (Mar-20: Rp2.4tn; FY19: Rp1.5tn); we believe this was partly due to the slower construction progress affected by COVID-19. WSBP’s average inventory days stood at 585 days in 2Q20, still relatively high compared to 2Q19 at 135 days.

− 2Q20 opex to sales at 15.4%. In 2Q20, Operating Costs accelerated to Rp53.4bn (+38.7% QoQ; -6.6% YoY) as WSBP’s personnel expense (58% of total opex) advanced by 37.7% QoQ/0.4% YoY. The increase was primarily due to recurring-festive allowances, which were paid in 2Q20. This led to opex-to-sales ratio at 15.4% (1Q20: 5.1%; 2Q19: 3.5%), contributing to the deleveraging.

− Gearing remained at 81.9%. As of Jun-20, WSBP’s total debt stood at Rp5.8tn (Mar-20: Rp6.0tn), with gearing ratio at 81.9%. Note that the company has fully factored in the PSAK 71 adoption of Rp1.0tn in the previous quarter.

Maintain Buy. We retain our Buy recommendation for WSBP with target price of Rp242. We expect an acceleration in construction works in 2H20 with higher plan utilization. Key risks to our call are: lower-than-expected new contracts achievement and external market risks.

WSBP 2Q20 RESULTS

Rpbn 6M20 6M19 %YoY 2Q20 1Q20 %QoQ 2Q19 %YoY FY20F % of ours

FY20C % of cons.

Revenue 1,101 3,823 -71.2% 347 754 -53.9% 1,622 -78.6% 4,374 25.2 6,660 16.5

Gross profit 206 673 -69.4% 19 187 -89.9% 282 -93.3% 909 22.7 1,361 15.2

Operating profit 114 560 -79.6% (35) 149 -123.2% 225 -115.3% 709 16.1 1,125 10.2

Pretax profit 10 420 -97.6% (108) 118 -191.3% 116 -193.6% 479 2.1 845 1.2

Net profit 5 377 -98.6% (99) 105 -195.0% 90 -210.3% 391 1.3 683 0.8

Gross margin (%) 18.7% 17.6% 5.4% 24.9% 17.4% 20.8% 20.4%

Operating margin (%) 10.4% 14.6% -9.9% 19.7% 13.9% 16.2% 16.9%

Pretax margin (%) 0.9% 11.0% -31.2% 15.7% 7.1% 11.0% 12.7%

Net margin (%) 0.5% 9.9% -28.6% 13.9% 5.6% 8.9% 10.3%

Source: Bloomberg, Company, Mandiri Sekuritas estimates

Edbert Surya (+6221 5296 9623) [email protected] Adrian Joezer (+6221 5296 9415) [email protected]



Market Recap August 3rd 2020; JCI 5,006.22 Points -143.40 pts (-2.78%); Valued $648mn; Mjk Cap $390bn; USD/IDR 14,704

TOP TURNOVER: BBRI BBCA TLKM BMRI BBNI ASII TOWR PGAS ICBP TKIM UNVR PTBA MDKA MNCN KLBF BRPT UNTR BBTN HMSP (56%)

ADVANCING SECTOR: NONE

DECLINING SECTOR: auto-5.8%; telco-4.9%; property-3.7%; construction-3.6%; cement-3.1%; financial-2.7%; mining & consumer-2.2%; plantation-2%

The JCI plunged as much as 4.3% on early Monday morning amid worries that the govt may have to go back to tougher lockdown measures to control the raging pandemic. Indonesia has the largest number of cases in Southeast Asia, with infections more than quadrupling since the end of May to over 111k. Rising infections have forced the capital city to delay the easing of social distancing measures by another two weeks, while neighboring Philippines will put capital Manila back on a stricter lockdown starting tomorrow as virus cases surged more than fivefold after curbs were eased in June. The Philippine Stock Index plunged as much as 3.9%. . President Jokowi said the govt has disbursed 20% of virus stimulus allocation. Indonesia is scheduled to announce 2Q20 GDP on Wed, with economists projecting a 4.7% contraction, steeper than the 4.3% drop estimated by President Jokowi. The consensus’s projection ranged from -3% to as low as -6%. The IHS Markit Indonesia July manufacturing PMI rose from 39.1 in June to 46.9, highest reading since Feb, but still below the 50 mark which signals contraction. Emerging-market stocks and currencies are within touching distance of erasing their pandemic-fueled losses of 2020, but most economies are shrinking and central banks are getting low on firepower amid lingering virus concerns. The JCI ended 2.8% lower at 5006 level, off day low of 4930 level. Market turnover (excluding $31.5MN ULTJ crossing) was strong at $648MN. Foreign participants declined slightly to 27% and came up better seller for 8%. Losers beat gainers by wide margin of 15 to 2. The 10-year govt bond yield was little changed at 6.83%. The IDR weakened to 14704 level although July inflation at 1.54% was better at expected (vs. +1.71% consensus). Global funds bought a net $8.7MN in Indo bonds on July 28th; and bought a net $3.4MN in country’s equities on July 30th.

Sales Team +6221 527 5375

Indofood CBP's (ICBP) shareholders approved Pinehill acquisition plan In the Extraordinary General Shareholder Meeting yesterday (3/8), ICBP obtained approval from shareholders on the proposed Pinehill Corpora transaction. Hence, all the Pre-Conditions of the proposed transaction as disclosed in the circular letter published on 8 June 2020 have been fulfilled. (IDX)

FROM THE PRESS

MARKET



Indices and Fund Flows Currencies and Bonds Major Commodities

Indices Last Chg (%) YTD Chg (%)

Currency Last Chg (%) YTD Chg (%)

Last Chg (%) YTD Chg (%)

JCI 5,006.2 -2.8 -20.5 Rp/US$ 14,630 +0.21 -5.4 Crude Oil, WTI (US$/bl) 41.01 +1.8 -32.8

Dow Jones 26,664.4 +0.9 -6.6 US$/EUR 1.176 -0.14 -4.7 Copper (US$/mt) 6,495 +1.1 +5.6

Nikkei 22,195.4 +2.2 -6.2 YEN/US$ 105.95 +0.11 +2.5 Nickel (US$/mt) 13,897 +1.2 -0.4

Hang Seng 24,458.1 -0.6 -13.2 SGD/US$ 1.376 +0.12 -2.2 Gold (US$/oz) 1,977 +0.1 +30.3

STI 2,484.9 -1.8 -22.9 Tin 3-month (US$/mt) 18,013 +0.7 +4.9

Ishares indo 18.2 -2.8 -29.0 CPO futures (Ringgit/ton) 2,731 +2.0 -9.9

Coal (US$/ton) 52.6 +1.3 -22.3

Foreign Fund Flows (US$mn)

Last Chg YTD Chg

Gov. Bond Yield

Last Chg (bps)

YTD Chg

(bps)

Rubber forward (US¢/kg) 162.3 +3.4 -2.4

Equity Flow -100.6 -1,404 5Yr 6.00 +4 -44 Soybean oil (US$/100gallons)

31.67 +2.5 -8.2

Bonds Flow +206.6 -6,802 10Yr 6.85 +2 -21 Baltic Dry Index 1,350.0 +0.0 +23.9



Equity Valuation Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield

Code Rating (Rp) Target PT (Rp Bn) 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021

MANSEK universe 5,006 5,540 10.7 3,669,652 185,435 256,670 19.8 14.3 2.0 1.9 12.9 11.3 -26.6% 38.4% 3.4% 2.6%

Banking 1,364,541 63,009 101,581 21.7 13.4 2.0 1.8 N.A. N.A. -34.4% 61.2% 3.2% 1.6%

BBCA Neutral 30,650 26,500 (13.5) 755,676 22,167 29,781 34.1 25.4 4.3 3.8 N.A. N.A. -22.4% 34.3% 1.8% 1.2%

BBNI Buy 4,440 5,900 32.9 82,800 7,073 15,323 11.7 5.4 0.8 0.7 N.A. N.A. -54.0% 116.6% 4.6% 2.1%

BBRI Buy 2,990 3,000 0.3 368,663 20,229 35,699 18.2 10.3 1.9 1.7 N.A. N.A. -41.1% 76.5% 5.6% 1.6%

BBTN Buy 1,210 1,350 11.6 12,814 1,236 1,554 10.4 8.2 0.7 0.7 N.A. N.A. 490.6% 25.7% 4.4% 2.3%

BDMN Buy 2,620 4,000 52.7 25,112 2,703 4,752 9.3 5.3 0.6 0.5 N.A. N.A. -33.6% 75.8% 5.7% 3.8%

BJBR Buy 885 860 (2.8) 8,707 1,260 1,438 6.9 6.1 0.8 0.8 N.A. N.A. -19.2% 14.1% 10.6% 10.6%

BJTM Buy 520 590 13.5 7,801 1,146 1,434 6.8 5.4 0.8 0.8 N.A. N.A. -16.8% 25.2% 9.3% 9.3%

BNGA Buy 740 840 13.5 18,597 2,340 4,211 7.9 4.4 0.5 0.4 N.A. N.A. -35.8% 80.0% 7.8% 5.0%

BNLI Sell 1,260 430 (65.9) 35,334 909 1,494 38.9 23.6 1.5 1.4 N.A. N.A. -39.4% 64.4% 0.0% 0.0%

PNBN Buy 770 1,100 42.9 18,547 1,976 3,508 9.4 5.3 0.5 0.4 N.A. N.A. -40.4% 77.5% 0.0% 0.0%

BTPS Buy 3,410 3,200 (6.2) 26,270 1,189 1,547 22.1 17.0 4.2 3.5 N.A. N.A. -15.1% 30.1% 1.1% 0.9%

BFIN Buy 282 475 68.4 4,220 781 841 5.4 5.0 0.6 0.6 N.A. N.A. 9.7% 7.7% 4.2% 5.6%

Construction & materials 158,561 5,441 9,053 29.1 17.5 1.2 1.1 13.8 10.4 -56.7% 66.4% 2.1% 1.3%

INTP Buy 11,900 14,500 21.8 43,807 1,673 2,003 26.2 21.9 1.8 1.7 11.7 10.2 -8.9% 19.8% 1.5% 1.3%

SMGR Buy 9,125 11,020 20.8 54,125 2,520 2,825 21.5 19.2 1.6 1.5 9.0 8.4 5.4% 12.1% 2.3% 1.8%

ADHI Buy 565 810 43.4 2,012 105 361 19.1 5.6 0.3 0.3 8.4 6.4 -84.2% 243.0% 6.6% 1.0%

PTPP Buy 910 1,370 50.5 5,642 219 754 25.8 7.5 0.5 0.4 9.0 5.9 -76.5% 244.3% 4.9% 1.2%

WIKA Buy 1,110 1,680 51.4 9,946 561 1,159 17.7 8.6 0.7 0.6 7.6 5.9 -75.4% 106.5% 1.1% 2.3%

WSKT Buy 585 1,010 72.6 7,828 -579 -838 -13.5 -9.3 0.7 0.7 28.0 20.5 N/M -44.8% -1.5% -2.1%

WTON Buy 262 500 90.8 2,283 285 438 8.0 5.2 0.6 0.6 3.7 2.6 -44.4% 53.7% 6.7% 3.7%

WSBP Buy 186 242 30.1 4,903 391 530 12.5 9.2 0.6 0.6 7.7 6.7 -51.5% 35.7% 8.2% 4.0%

JSMR Buy 3,860 5,900 52.8 28,015 266 1,822 105.3 15.4 1.5 1.4 23.0 12.2 -87.9% 584.6% 1.6% 0.2%

Consumer staples 924,761 40,530 51,061 22.8 18.1 4.9 4.4 14.9 12.0 -16.3% 26.0% 3.7% 3.2%

ICBP Buy 9,300 10,300 10.8 108,456 5,389 6,005 20.1 18.1 3.8 3.4 11.8 11.0 6.9% 11.4% 2.3% 2.5%

INDF Buy 6,475 8,450 30.5 56,850 5,245 5,573 10.8 10.2 1.4 1.3 7.0 6.5 6.9% 6.3% 4.3% 4.6%

MYOR Buy 2,290 2,650 15.7 51,202 2,861 2,745 17.9 18.7 4.3 3.8 12.7 11.3 43.9% -4.1% 1.5% 2.1%

UNVR Buy 8,250 9,500 15.2 314,738 7,495 8,038 42.0 39.2 62.0 59.5 30.0 27.7 1.4% 7.2% 2.3% 2.4%

GGRM Buy 48,325 63,450 31.3 92,982 7,422 10,321 12.5 9.0 1.7 1.6 8.2 6.4 -31.8% 39.1% 5.4% 5.4%

HMSP Buy 1,615 2,400 48.6 187,854 8,342 13,384 22.5 14.0 6.2 5.3 17.4 10.3 -39.2% 60.4% 7.2% 4.4%

KLBF Buy 1,560 1,650 5.8 73,125 2,764 2,985 26.5 24.5 4.2 3.8 18.0 16.5 10.2% 8.0% 1.9% 2.0%

SIDO Buy 1,285 1,450 12.8 19,275 872 947 22.1 20.4 6.0 5.8 16.4 15.1 7.9% 8.6% 3.8% 4.3%

MLBI Buy 9,625 13,250 37.7 20,280 141 1,063 144.3 19.1 53.1 15.5 35.2 12.3 -88.3% 656.9% 4.5% 0.7%

Healthcare 51,397 1,042 1,271 49.3 40.4 3.8 3.6 16.9 14.3 3.5% 22.0% 0.1% 0.2%

MIKA Buy 2,400 2,600 8.3 34,922 693 815 50.4 42.8 7.5 6.7 33.8 28.2 -5.1% 17.6% 0.0% 0.0%

SILO Buy 4,650 7,150 53.8 7,556 44 100 170.3 75.5 1.2 1.2 6.1 4.9 107.0% 125.6% 0.0% 0.0%

HEAL Buy 3,000 5,200 73.3 8,919 304 355 29.3 25.1 3.9 3.5 11.0 9.7 19.4% 16.7% 0.8% 0.9%

Consumer discretionary 286,481 18,149 25,248 15.8 11.3 1.4 1.3 9.0 8.1 -39.8% 39.1% 4.4% 3.1%

ACES Neutral 1,700 1,500 (11.8) 29,155 711 1,055 41.0 27.6 5.9 5.2 31.7 22.5 -31.0% 48.5% 1.8% 1.2%

LPPF Buy 1,215 1,800 48.1 3,545 50 497 70.3 7.1 2.0 1.6 5.7 2.2 -96.3% 884.6% 0.0% 0.4%

MAPA Buy 2,110 3,850 82.5 6,014 54 606 110.5 9.9 2.0 1.6 14.9 5.0 -92.1% 1013.2% 0.0% 0.3%

MAPI Buy 650 1,000 53.8 10,790 -1,704 543 -6.3 19.9 2.6 2.3 -107.2 6.8 N/M N/M 1.9% 0.0%

RALS Buy 530 700 32.1 3,761 -132 143 -28.5 26.3 1.1 1.0 -40.7 8.4 N/M N/M 10.2% -2.3%

ERAA Buy 1,490 1,500 0.7 4,753 140 355 33.9 13.4 1.0 0.9 14.2 9.2 -52.5% 153.2% 0.6% 1.5%

ASII Buy 4,880 5,000 2.5 197,560 14,710 17,216 13.4 11.5 1.3 1.2 8.7 8.8 -32.2% 17.0% 4.9% 3.4%

SCMA Buy 1,220 1,800 47.5 17,968 1,566 1,693 11.5 10.6 3.1 2.8 8.0 7.6 35.7% 8.1% 6.1% 6.6%

MNCN Buy 790 2,200 178.5 9,799 2,427 2,593 4.0 3.8 0.7 0.6 3.1 2.7 24.1% 6.8% 3.7% 4.0%

MSIN Buy 260 650 150.0 1,353 267 316 5.1 4.3 0.9 0.8 3.0 2.8 16.3% 18.1% 9.9% 11.7%

PZZA Buy 590 850 44.1 1,783 60 231 29.9 7.7 1.4 1.2 6.8 3.8 -70.1% 286.4% 5.6% 1.7%

Commodities 242,103 21,594 23,317 11.2 10.4 1.0 1.0 4.3 3.8 -11.1% 8.0% 3.5% 3.6%

UNTR Buy 20,450 22,500 10.0 76,281 8,962 9,195 8.5 8.3 1.2 1.1 3.8 3.3 -20.8% 2.6% 3.5% 3.6%

ADRO* Neutral 1,030 1,350 31.1 32,946 372 353 6.2 6.6 0.6 0.6 2.7 2.5 -7.9% -5.2% 5.7% 5.3%

HRUM* Neutral 1,235 1,300 5.2 3,170 17 14 12.7 16.4 0.7 0.7 0.4 0.2 -5.9% -21.7% 4.3% 3.4%

INDY* Neutral 915 910 (0.5) 4,767 2 6 202.2 52.7 0.4 0.4 1.7 1.3 N/M 286.9% 0.1% 0.5%



Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield

Code Rating (Rp) Target PT (Rp Bn) 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021

ITMG* Neutral 7,650 10,450 36.6 8,389 100 101 5.9 5.9 0.7 0.7 1.7 1.6 -20.8% 0.9% 14.5% 14.5%

PTBA Neutral 1,975 2,350 19.0 22,757 3,482 3,496 6.5 6.5 1.2 1.2 4.0 3.9 -18.3% 0.4% 11.5% 11.5%

ANTM Buy 700 700 (0.1) 16,822 -22 197 -772.6 85.5 0.8 0.8 14.1 12.9 N/M N/M 0.0% 0.4%

INCO* Buy 3,350 3,500 4.5 33,287 88 133 26.5 17.7 1.1 1.1 7.6 6.2 53.0% 51.1% 0.0% 0.0%

TINS Neutral 735 670 (8.9) 5,474 -420 246 -13.0 22.2 1.1 1.0 39.3 9.6 31.3% N/M -2.7% 1.6%

MDKA* Buy 1,745 2,200 26.1 38,211 92 111 29.1 24.2 4.6 3.9 11.0 9.3 26.4% 21.5% 0.0% 0.0%

Property & Industrial Estate 80,827 7,211 9,744 11.2 8.3 0.6 0.6 8.3 7.6 -4.7% 35.1% 2.6% 2.1%

ASRI Sell 115 80 (30.4) 2,260 150 938 15.0 2.4 0.2 0.2 6.5 5.1 -85.2% 524.8% 1.7% 1.7%

BSDE Buy 655 1,160 77.1 13,867 1,399 2,050 9.9 6.8 0.4 0.4 9.0 8.4 -54.4% 46.5% 0.0% 0.7%

CTRA Buy 610 1,120 83.6 11,322 832 1,094 13.6 10.3 0.7 0.7 9.4 8.1 -28.2% 31.5% 1.2% 1.2%

JRPT Buy 406 670 65.0 5,583 997 1,065 5.6 5.2 0.7 0.6 4.9 4.4 -1.9% 6.7% 4.7% 0.1%

PWON Buy 396 670 69.2 19,071 1,791 2,395 10.6 8.0 1.2 1.0 7.2 5.7 -34.1% 33.7% 1.5% 1.5%

SMRA Buy 560 960 71.4 8,079 420 604 19.2 13.4 1.0 1.0 9.7 8.7 -18.5% 43.8% 0.9% 0.9%

LPKR Neutral 132 200 51.5 9,318 74 391 126.2 23.8 0.3 0.3 10.4 10.5 N/M 429.7% 0.8% 0.8%

DMAS Buy 212 390 84.0 10,218 1,441 1,086 7.1 9.4 1.4 1.4 6.6 9.0 81.9% -24.7% 11.3% 9.6%

BEST Neutral 115 130 13.0 1,109 107 122 10.4 9.1 0.2 0.2 5.8 8.4 -72.0% 14.2% 3.1% 0.8%

Telco 415,275 23,702 25,930 17.5 16.0 2.7 2.6 5.8 5.5 -5.2% 9.4% 4.3% 4.7%

EXCL Buy 2,380 3,600 51.3 25,437 1,065 818 23.9 31.1 1.3 1.2 4.6 4.4 49.5% -23.2% 0.8% 1.3%

TLKM Buy 2,920 3,800 30.1 289,262 19,403 21,026 14.9 13.8 2.8 2.7 5.4 5.1 4.0% 8.4% 5.4% 5.8%

ISAT Buy 2,170 3,200 47.5 11,792 -1,046 -648 -11.3 -18.2 1.0 1.1 4.3 3.7 N/M 38.1% 0.0% 0.0%

LINK Buy 1,805 5,500 204.7 5,122 736 744 7.3 7.2 1.1 1.0 3.1 3.1 -17.8% 1.1% 8.6% 7.3%

TBIG Buy 1,245 1,400 12.4 26,931 1,068 1,264 25.2 21.3 4.9 4.4 11.7 10.9 30.4% 18.3% 2.2% 2.2%

TOWR Buy 1,130 1,300 15.0 56,732 2,476 2,725 22.9 20.8 5.7 4.9 12.3 11.5 5.7% 10.1% 2.1% 2.1%

Chemical 1,595 136 163 11.8 9.8 0.5 0.5 5.8 5.1 29.5% 20.3% 0.0% 0.0%

AGII Buy 520 700 34.6 1,595 136 163 11.8 9.8 0.5 0.5 5.8 5.1 29.5% 20.3% 0.0% 0.0%

Airlines 2,259 540 837 4.2 2.7 0.4 0.4 4.0 2.4 30.0% 55.0% 0.0% 0.0%

GMFI* Neutral 80 275 243.4 2,259 38 59 4.2 2.7 0.4 0.4 4.0 2.4 26.1% 56.3% 0.0% 0.0%

Transportation 2,602 -175 251 -14.9 10.4 0.5 0.5 11.2 4.5 -155.7% N/M -1.7% 2.4%

BIRD Buy 1,040 1,700 63.5 2,602 -175 251 -14.9 10.4 0.5 0.5 11.2 4.5 N/M N/M -1.7% 2.4%

Poultry 110,161 2,746 5,083 40.1 21.7 3.2 2.8 16.9 11.7 -50.5% 85.1% 1.9% 1.0%

CPIN Buy 5,925 5,500 (7.2) 97,158 2,058 3,378 47.2 28.8 4.5 4.0 24.3 17.4 -43.4% 64.2% 1.6% 0.9%

JPFA Buy 1,000 1,100 10.0 11,727 646 1,566 18.2 7.5 1.1 0.9 7.8 4.9 -63.4% 142.4% 4.4% 1.6%

MAIN Buy 570 675 18.4 1,276 43 139 29.9 9.2 0.6 0.6 5.7 4.5 -72.0% 225.6% 1.1% 3.5%

Oil and Gas 29,090 1,511 3,133 19.3 9.3 0.8 0.7 6.8 5.4 61.2% 107.4% 2.1% 4.3%

PGAS* Buy 1,200 1,700 41.7 29,090 106 221 19.3 9.3 0.8 0.7 6.8 5.4 56.4% 109.1% 2.1% 4.3%

Note: - *) net profit in USD mn - U/R means Under Review - n/a means Not Available - N/M means Not Meaningful - N.A means Not Applicable

Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia

General: +62 21 526 3445, Fax : +62 21 527 5374 (Equity Sales)

Adrian Joezer Head of Equity Research, Strategy, Consumer [email protected] +6221 5296 9415 Tjandra Lienandjaja Deputy Head of Equity Research, Banking [email protected] +6221 5296 9617 Ariyanto Kurniawan Automotive, Coal, Metal Mining, Chemical [email protected] +6221 5296 9682 Kresna Hutabarat Telecom, Media [email protected] +6221 5296 9542 Lakshmi Rowter Healthcare, Consumer, Retail [email protected] +6221 5296 9549 Robin Sutanto Property, Building Material [email protected] +6221 5296 9572 Edbert Surya Construction, Transportation [email protected] +6221 5296 9623 Silvony Gathrie Banking, Research Assistant [email protected] +6221 5296 9544 Riyanto Hartanto Poultry, Research Assistant [email protected] +6221 5296 9488 Henry Tedja Research Assistant [email protected] +6221 5296 9434 Wesley Louis Alianto Research Assistant [email protected] +6221 5296 9510 Leo Putera Rinaldy Chief Economist [email protected] +6221 5296 9406 Imanuel Reinaldo Economist [email protected] +6221 5296 9651 Silva Halim Managing Director [email protected] +6221 527 5375 Lokman Lie Head of Equity Capital Market [email protected] +6221 527 5375 Andrew Handaya Institutional Sales [email protected] +6221 527 5375 Feliciana Ramonda Institutional Sales [email protected] +6221 527 5375 Henry Pranoto Institutional Sales [email protected] +6221 527 5375 Kevin Giarto Institutional Sales [email protected] +6221 527 5375 Sharon Anastasia Tjahjadi Institutional Sales [email protected] +6221 527 5375 Talitha Medha Anindya Institutional Sales [email protected] +6221 527 5375 Angga Aditya Assaf Institutional Sales [email protected] +6221 527 5375 Ilona Carissa Institutional Sales [email protected] +6221 527 5375 Kusnadi Widjaja Equity Dealing [email protected] +6221 527 5375 Edwin Pradana Setiadi Equity Dealing [email protected] +6221 527 5375 Jane Theodoven Sukardi Equity Dealing [email protected] +6221 527 5375 Michael Taarea Equity Dealing [email protected] +6221 527 5375 Andreas M. Gunawidjaja Head Retail Equities [email protected] 6221 5296 9693 Boy Triyono Jakarta [email protected] 6221 5296 5678 Iedprima Intan Maradi Online Jakarta [email protected] 6221 5296 9516 Ruwie Medan [email protected] 6261 8050 1825 Linawati Surabaya [email protected] 6231 535 7218 Maulidia Osviana Lampung [email protected] 62721 476 135 Aidil Idham Palembang [email protected] 62711 319 900 Dhanan Febrie Handita Bandung [email protected] 6222 426 5088 Yuri Ariadi Pontianak [email protected] 62561 582 293 Yogiswara Perdana Yogyakarta [email protected] 62274 560 596 Achmad Rasyid Bali [email protected] 62361 475 3066 www.most.co.id [email protected] 14032

INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower). DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number 62-21-5263445 or fax 62-21-5275374. ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be influenced by any part or all of his or her compensation.

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INVESTOR DIGEST Digest/8. Agustus... · 2020. 8. 4. · Please see important disclosure at the back...

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Transcript of INVESTOR DIGEST Digest/8. Agustus... · 2020. 8. 4. · Please see important disclosure at the back...