JSMR Teknikal View

JSMR pada penutupan hari Rabu ditutup di 5700. Kalau dilihat dari fibonanci, maka JSMR tertahan di 5650 yang merupakan titik support 1, dan apabila break maka ke S2 di 5400. Dan untuk titik R1 ada di 5950 dan R2 6050

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Jasa Marga (JSMR IJ, BUY) 1H12 traffic volume

Robust traffic

Traffic volume reached 100.9mn vehicles in June 2012. This translates into 3.4mn vehicles per day (+2.5% mom). Compared to May 2012, the traffic volume in June 2012 was 0.8% mom lower as a result of fewer operating days. All in all, we continue to believe that the traffic volume shall improve, unaffected by the weaker global economic conditions. Cumulatively, traffic volume reached 583.0mn vehicles in 1H12, or up 11.7% yoy, and translating into 3.2mn cars per day. The 1H12 traffic volume is 52.1% of our full-year forecast. For 2H12, traffic volumes may be lower on the back of the one-week Lebaran holidays which will reduce traffic on the inner-city toll road. Hopefully, however, this will be somewhat offset by increased traffic on toll-roads out of Jakarta.

BORR records strong growth

The Bogor Ring Road (BORR) is a great success story despite the complexities of developing the second stage. Daily traffic on BORR has already reached almost 30,000 vehicles a day, above the threshold volume to decide whether to go ahead with the second stage. In two and a half years, traffic volume has surged a rapid 70% CAGR, justifying the development of the second stage. Nonetheless, there are some issues to face since development of the second stage shall require good coordination with the local government. For the second stage development which is expected to cost Rp340.8bn and take 17 months to complete, JSMR has appointed WIKA as the main contractor. Construction begins this month.

Eyeing the Batang Semarang toll road section

The concession holder of the Batang Semarang toll road section, PT Marga Setiapuritama, has been warned by the toll road authority body to seek new investors after Bakrie Toll Road withdrew from the project. Jasa Marga has expressed interest in the section since it will connect to its current Semarang Solo toll road. However, the company has not disclosed information on whether it plans any further action. In our view, Jasa Marga has the financial capacity to participate in this project. Nonetheless, the financial feasibility of the project will be the main issue as the investment cost has ballooned to Rp7.2tn from Rp3.6tn previously. This section is 75km long and is part of the Trans Java Toll road.

Maintain BUY

Jasa Marga's traffic volume remains strong and unaffected by the global economic weakness. Going forward, the prospects for this business look good overall. Maintain BUY on the stock with a Target Price of Rp6,100.

INDF Koreksi Terlebih Dahulu

INDF pada hari Selasa tanggal 17 Juli 2012 ditutup di 5400 (turun 100) dari penutupan Senin. dilihat dari chart sepertinya INDF akan koreksi terlebih dahulu sebelum melanjutkan kenaikkan. Apabila hendak membeli alangkah baiknya menunggu di S1 5200. Untuk R1 adalah 5650 dan apabila break maka INDF akan melanjutkan pergerakkan dengan target R2 6400

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PGAS Akan Koreksi Sebentar Atau Break?

PGAS hari Senin tanggal 16 Juli 2012 ditutup 3700 (sama dengan hari jumat). Kalau dilihat dari pola yang terjadi PGAS kesulitan menembus 3725 (R1) jadi PGAS ada kemungkinan koreksi terlebih dahulu dengan target S1 3625 dan S2 3550.

Akan tetapi bila PGAS besok berhasil menjebol (break) R1 3725 dengan volume yang tinggi, maka PGAS dapat dikoleksi dengan target selanjutnya di R2 3975.

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ISAT Technical Update

ISAT hari Senin tanggal 16 Juli 2012 ditutup 4400 turun 25 point dari penutupan hari Jumat kemarin. Hari ini ISAT telah menjebol resistance di 4475, akan tetapi karena terjadi aksi profit taking maka ISAT malah ditutup turun. Apabila dilihat dari pola chart diatas, ISAT membentuk pola Head n Shoulder.

Rekomendasi Buy jika break 4475 dengan volume tinggi dengan R1 5150 dan R2 5550. jika melihat chart hari ini ISAT bisa dikoleksi di S1 4225

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Indosat (ISAT; BUY) New ammunition

New board member appointed

Indosat’s shareholders have appointed a new board member, Erik Meijer, as Commercial Director, effective as of June 2012. Erik Meijer has gained extensive experience in the industry with incumbent Telkomsel and the so-called challenger Bakrie Telecom with notable success. With this appointment, Indosat should be better able to focus on its commercial strategy and execution speed. Nonetheless, Indonesia remains a complex market with intense competition. As such, it is vital that Indosat develops a customized strategy from cluster to cluster without adversely affecting the company’s grand strategy. The ultimate goal should be to gain market share by taking effective and timely marketing initiatives. The past couple of quarters have been difficult for Indosat and the company has struggled to challenge its competitors. Yet with the new commercial director now appointed, we expect positive results to filter through to the financials in 2H12.

No 3G spectrum issue

The Ministry of Communications and Information will soon auction another two slots (5 Mhz each) in the 3G spectrum. With the increasing growth in data, this spectrum has greater strategic importance for future business expansion. Nonetheless, Indosat has not indicated much interest in the auction since it feels it has sufficient spectrum to keep up with the data demand growth. Its plans are to optimize usage of the 900Mhz frequency since a new technology has been implemented to utilize 900Mhz for 3G. Indosat owns 2 blocks (10Mhz) in the 900Mhz frequency, or more than its main rivals Telkomsel (7.5Mhz) and XL (7.5Mhz). With slots in the spectrum becoming increasingly scarce, there is less chance of a price war in data, in our view. Nonetheless, since investment costs are tending to drop, operators need to come up with innovative offers that strike the right balance between quality and pricing.

Slim chance of M&A

Indonesia’s telecommunications market is a bit overcrowded with 10 operators. Some consolidation has taken place among the small players, most notably between Mobile 8 and Smart and between Bakrie Telecom and Sampoerna Telecom. However, Indosat has indicated that it is unlikely to seek any M&A opportunities. Note that the main motive for incumbents to seek M&A opportunities with smaller players is to acquire more spectrum. However, in Indosat’s case, the company feels that it has sufficient spectrum at the current time. Other assets such as customers and networks would be less valuable for the incumbents. As such, consolidation is more likely to take place among the smaller players. Quite simply, if Indosat can improve its service quality and come up with more attractive offers, then it stands to gain when unsatisfied subscribers using the services of smaller players decide to switch to other operators.

Upgrade to BUY

We upgrade our recommendation to BUY with a Target Price of Rp4,950, implying PER FY12-13 of 19.9-14.4x and EV/EBITDA FY12-13 of 4.3-3.7x, reflecting: 1) the expectation of an improved commercial strategy with the appointment of Erik Meijer and 2) the fact that the stock price has corrected significantly. We expect an improvement in earnings entering 2H12.

Selamat Sempurna (SMSM : BUY) Completely integrated

Sense of utilization

We visited SMSM main manufacturing filter factories in Tangerang, West Java, where it lies on vast 40ha manufacturing complex within the 75ha area owned by its holding company, the ADR Group. SMSM has six factories in total, to support its manufacturing activities from producing key parts from its raw materials, the assembly line, till the packaging and completed with 15,000m2 warehouse area. The filter factory is fully operated as it labors around 2,000 people, divided into 2-3 shifts per day with some machines which fully operated for 24-hours. To date, filter sales contributes up to 70% of SMSM's revenue, has a maximum capacity of 96mn units per annum and has product variations up to 5,000 types. In 2012, we believe the company can utilize its filter production up to 65% of its total capacity.

The Kaizen approach to quality

Most of SMSM's main raw materials are imported products, such as papers for filters came from distributor in Korea, and the steel plates also came from Posco Korea. The company maintained its supplies by ordered in 3-months inventory and buy at spot price. From its experience, management had chosen to use imported paper and steel plate because it has better quality and durability compared to local producers. SMSM main sales destination to overseas countries has imposed the company to produce qualified products that should meet the international minimum requirements. In addition, SMSM also has the laboratory to do quality assessment and maintained the quality of its products, while at the same time the laboratory also has been use to examine defect items which then allows the company to take further actions to continuously improve its product quality.

Vertically integrated within the group

SMSM manufacturing process showed remarkable vertical integration within the ADR Group which allows the company to capture the margins from various parts of value chain process as well as to maintain the supply level of raw materials. Vertical integration gives room for the company to save in transport costs, experience faster turnover, and to have flexibility in adjusting to changes in product specifications. Furthermore, with the new acquisition of sister company, PT Hydraxle Perkasa (HP), SMSM can have a steady supply of customized steel plates along with the custom molds produced in HP which enables SMSM to sustain as one of the company that have comprehensive range of product variations, especially in filter products.

Maintained BUY

In addition to the strong track record of revenue and dividend growth plus the robust financials, we see SMSM also demonstrate solid competence in vertically-integrated manufacturing. We believe the company still on its track to capture the growth opportunity in filters and radiators market demand. Our Target Price of Rp2,506 implies PER FY12-13 of 15.0-13.3x and currently trades at PER FY12-13 of 11.9-10.3x, lower compared with the 12.9-10.6x peer averages. Remain attractive, BUY maintained.

AKRA BOW

AKRA pada penutupan Rabu 11 Juli 2012 ditutup di 3775 yang merupakan level support I-nya dan apabila hari ini tidak terjadi rebound maka bisa dilakukan BOW di level support II (3650)

Untuk resistance I di 3900 dan resistance II di 4150

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KAEF sudah di titik fibo 61,8%

KAEF pada penutupan hari selasa tanggal 03 Juli 2012 di harga 510, dimana harga ini merupakan level support I dan juga titik fibo 61,8% sehingga kemungkinan hari ini akan mengalami teknikal rebound dengan target di  550 (resistance I) dan apabila jebol akan menuju resistance II di 620

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Kalbe Farma (KLBF) The Milky deal

New JV: Kalbe Milko Indonesia 

Following the acquisition of Hale International, Kalbe continues to aggressively expand its business. The company has signed agreement with Milko Beverage Industry (MBI) to set a JV company, called Kalbe Milko Indonesia in which Kalbe will hold 51% ownership. Kalbe will invest up to Rp150bn on the new company. Our conversation with the management revealed that the company expects to start building the facility in 4Q this year in order to commence operation at end of 2013 or at the beginning of 2014. The new facility will be located in Sukabumi, near the source of milk. From the new JV, Kalbe expects to enter the liquid milk segment using the expertise from MBI. 

Milk contributes around 22% to Kalbe's revenues 

Currently, milk contributes around 22% to the company's total revenues. Hence, almost all of Kalbe's milk products are powder milk. Therefore, Kalbe intends to expand its Consumer Health and Nutritionals business with more prospective outlook in the future. Having approximately around Rp2tr net cash, Kalbe is focusing to acquire another 3 or 4 companies within those two segments. At the moment, Kalbe has two dairy liquid products: ready to drink Prenagen and Nutrive Benecol, contribution of which are still very low to the company's total revenues. The company's new JV is expected to strengthen its nutritionals units going forward. 

Prospective milk industry outlook 

According to Food & Agriculture policy Research Institute, average milk consumption in Indonesia has the highest growth amongst ASEAN countries in 2006 - 2010 with CAGR of around 2.9% whereas Thailand 2.4%, Vietnam 2.3%, Philippines 1.6% and Malaysia -3.6%. The Agriculture Minister also said that average milk consumption in Indonesia has shown significant improvement since 2008, from 7.7lt per capita to 11.09lt per capita in 2010 or about half of the average milk consumption in Malaysia. Hence, domestic national milk production accounts for only around 30% of the total milk needs in Indonesia. 

Maintain HOLD with a TP of Rp4,050 

We like the company's recent movement in expanding its business especially on the Consumer Health and Nutritionals division which have more rooms to expand. Kalbe's recent acquisition on Hale International will strengthen its Consumer Health division whereas the new JV company would allow the company to tap into liquid milk industry where the company has no experience at the moment. The counter is currently trading at 2012F P/E multiple of 22.8x. Maintain Hold