AISA Pola Cup n Handle

AISA pada penutupan hari senin tanggal 18 Juni 2012 di harga 630, dan jika ditarik chartnya dari bulan Desember 2011 sampai dengan sekarang membentuk pola cup n handle (cangkir dan pegangan) dan pada tanggal 08 Juni 2012 telah break dan mencoba untuk naik dengan target I di 720 dan target II di 970.

Untuk level Support I di 580 dan Support II di 500

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Selamat Sempurna (SMSM) A Lucrative Acquisition

TP raised to Rp2,506, maintain BUY 

Although our sales target remains unchanged, we slightly raise our net earnings forecast because of the acquisition of a 49% stake in PT Hydraxle Perkasa, its sister company. We also adjust our macro assumptions, as well as the debt portion in our WACC calculations (to 40% from 30% previously) and our cost of debt assumption (to 10.5% from 11% previously). Consequently, we raise our Target Price to Rp2,506, implying PER FY12-13 of 15.0-13.3x. The stock currently trades at an attractive valuation of 11.2-9.9x PER FY12-13. BUY maintained. 

New Acquisition: PT Hydraxle Perkasa 

On 1 May, SMSM bought a 49% stake in PT Hydraxle Perkasa (HP), its sister company, which, according to GIAMM, is the largest manufacturer of dump body hoists for trucks in Indonesia. In the transaction, SMSM bought 720,588 shares in HP for Rp 113bn or Rp 157/share. This implies PER FY11 for HP of 7.0x. The HP shares sold to SMSM are entirely new shares. Proceeds raised from the transaction will be used by HP to repay its entire debts of Rp 42bn with the remainder used to fund expansion of its facilities and for working capital. SMSM has the option to buy another 2% stake in HP before 31 December. 

Earnings Boost from the New Acquisition 

SMSM's needs for molds and dies are met by HP. As a result, the acquisition of a 49% stake in HP will guarantee continuity in the supply of molding products. In FY08-11, HP's revenues and net profits grew by CAGR 24.3% and 84.1%, respectively. Looking ahead, with further strong growth anticipated in Indonesia's mining sector, we expect HP's net earnings to show stronger growth. SMSM's share of HP profits shall be incorporated using the equity method. Moreover, the acquisition should also be earnings boosting, we believe, since our estimates for SMSM's net profits in FY12-13-14 are lifted to Rp 240bn-272bn-312bn (or 2-6% higher than our previous forecast). To fund the acquisition, SMSM has obtained a loan facility without collateral from Mizuho Bank. In this regard, we assume SMSM takes on additional loans of Rp 100bn in FY12. Following the acquisition we now forecast SMSM's gearing ratio to increase to 49% (compared to our previous forecast of 30%). 

Generous Final Dividends of Rp50/share 

SMSM has announced a FY11 final dividend of Rp 50/share. This comes after the interim dividend of Rp 50/share. Hence, in total, SMSM shall distribute 72% of its FY11 net profits as dividends to its shareholders - as we had previously forecast. SMSM's final dividend of Rp 50/share offers the shareholders an attractive yield of 2.7% at the current share price. The cum-date will be on 29 June with the dividends paid on 17 July. Reflecting the company's guidelines of delivering sustained dividends growth, we forecast SMSM's dividends per share to grow by 6% CAGR in FY12-14, assuming that interim dividends distributed to shareholders are 50% of the total dividends. This suggests a DPR of around 60% in FY12-14 and a dividend yield in FY12 of 5.7% at the current share price.

Semen Gresik (SMGR) All about expansion

Targeting Vietnam

The management of Semen Gresik has stated its intention of investing in Vietnam - a move which reflects the company's desire to grow inorganically if there are any opportunities. The acquisition would create additional capacity instantly and boost Semen Gresik's cash flows. Vietnam's close proximity to North Sumatra provides good access to Indonesia and to the northern part of Sumatra especially. Nonetheless, the acquisition price remains an important factor. As to the acquisition target, Semen Gresik has yet to disclose any names. It is also too early to determine the potential impact of any such acquisition on Semen Gresik's operations.

Tuban IV in operation

Tuban IV has been running trail operations for the last two months. Although delayed for about 4 months, the project is still within budget. The current production level of the new plant is 3,000 tonnes per day, translating into a utilization rate of 30%. Going forward, the plant's utilization rate will gradually be increased over the next 2-3 months. With the additional capacity coming from Tuban IV, the Tuban facility should have production capacity of 10mn tonnes p.a., thereby increasing the total production capacity to 22.0mn tonnes p.a.

Further expansion plans

The management of Semen Gresik plans to submit new expansion plans to its shareholders at the upcoming AGM. This will allow the company to attain shareholders' approval sooner rather than later. The initial plan is to build two new cement plants in Java and Sumatra. Although the timeline is to add new capacity in 2015-16, construction of new plants could take 36-48 months, meaning the new capacity is ready only in 2018-19. When the new capacity is ready, the current plant should be running at full capacity. Notably, all this expansion is on top of the inorganic growth. In simple terms, if the cement market grows by 6% p.a. - a reasonable assumption - then the cement industry will need to add capacity of 3.0mn tonnes every year - or basically one plant each year. Besides Semen Gresik, the other players in the industry also have plans to raise capacity. Although this is encouraging, the cement companies must be careful in adding capacity at the right time, so as to avoid a sudden oversupply condition.

BUY recommended

In our view, Semen Gresik remains committed to its grand strategy of maintaining market share of 40-45% in the domestic market. To ensure that it meets this goal, the company is actively seeking opportunities to grow - either organically or by making acquisitions. In this way, Semen Gresik hopes to maintain its dominant position in the domestic market. The Vietnam acquisition could help it achieve this target. BUY maintained with a Target Price of Rp13,850.

Jaya Agra Wattie (JAWA) A Distinctive Mix

We initiate coverage on JAWA with a BUY recommendation. We like the company because of: 1) its distinctive mix of revenues from rubber and palm oil, 2) its extensive unplanted land bank of 33k ha, 3) the good growth potential supported by the company's new plantings strategy and 4) the company's sound financial health. The stock currently trades at 8.3x FY12 P/E, a 34% discount to the industry average. Using a DCF valuation method, we set our Target Price at Rp550, implying FY12-13F P/E of 12.8-10.1x, offering 55% potential upside.

A distinctive revenues mix

JAWA has a unique revenues mix compared to other listed plantation companies. This is because rubber dominates its revenues at 63% of the total, while revenues from palm oil are 35% of the total, with the remaining 2% coming from others (coffee and tea). Profitability wise, rubber had the highest gross and net margins at 53% and 40%, respectively, in 2011. By comparison, the gross and net margins of palm oil were 39% and 30%, respectively. Note that rubber and palm oil have different weather performance characteristics. As such, a combination of these two plantations will lead to more stable performance since the company is not dependent on a single commodity.

Rubber provides the majority of the revenues

JAWA has large immature areas, both for rubber and palm oil. Rubber's immature area is 53% of the total rubber planted area of 9.6k ha. On top of this, there is also huge unplanted landbank of 21k ha. As a result, we expect higher rubber production growth in the coming years. Indeed, JAWA is already targeting new plantings of 14.5k ha up to 2014. In our estimates, rubber production will grow by 3-year CAGR of 13% in 2011-14F.

Palm oil to contribute more

Unlike other plantations companies, palm oil accounts for less than 50% of JAWA's total revenues (35% in 2011 or amounting to Rp 224bn). Notably, the immature portion is very large - 72% of the total area vs. an industry average of just 32%. This offers great potential for growth going forward. In this regard, JAWA targets new plantings of 7,000 ha for oil palm up to 2014. Along with the growth in nucleus production, we expect margins to increase since 49% of its COGS are purchases of raw materials (lumps, logs and FFB).

Sound balance sheet

The company's gearing ratio declined to 0.57x in 2011 from 1.32x in 2010. In regard to the planned expansion, we believe the company will be able to take on external loans since its net gearing is relatively low. JAWA has stated its intention of issuing bonds in September 2012. The financial results are now being audited. This will allow JAWA to get a rating from Pefindo. This year's capex is budgeted at Rp490bn for the new plantings and construction of 4 new plants. Furthermore, JAWA distributed some 20% of its 2011 net income as dividends, translating to Rp 9.6/share and implying a 2.7% gross dividend yield.

Metropolitan Land (MTLA) On A Strong Footing

We initiate coverage on Metropolitan Land (MTLA), an Indonesian property company which has a focus on the middle-income segment. We like the company for: 1) its balanced revenues structure between recurring and non-recurring income which helps ensure sustainability, 2) the continued good performance of its residential projects, 3) the company's sound financial conditions which facilitate development. To value this stock, we use a combination of the asset valuation and DCF methods. By applying a 50% discount to NAV, we arrive at a Target Price of Rp550, implying FY12F-13F P/E of 20.8-16.0 x. BUY.

Balanced revenues structure

Revenues from real estate - from residential projects and condotel - accounted for 68.5% of the company's total revenues in 1Q12. All in all, the company is committed to achieving a balanced revenues structure. To this end, the company is developing new commercial assets. This year, for example, the company is constructing the Grand Metropolitan Mall in West Bekasi. Furthermore, in a bid to ride on the growth in Indonesia's burgeoning tourism industry, MTLA plans to build three budget hotels this year. Profitability wise, the gross margin is showing steady improvements as the company achieves a better mix between residential projects and high margin commercial properties.

Expecting strong sales

MTLA is currently developing six middle-segment focused residential projects. Demand for properties in each project remains high (as reflected in the continuously rising land prices). All in all, the company is targeting Rp582 bn in marketing sales from its residential projects in 2012 (30% higher than in 2011) and another Rp68.7 bn from the M-Gold apartment and office that will be launched this year. Our 2012 marketing sales forecast, by comparison, is slightly lower than the company's at Rp616 bn. Since MTLA does not have that much land bank (in comparison to other property companies), the company will keep looking for land plots of 100-200 ha in size to develop its new residential projects.

Good financials shall facilitate development

With several proposed projects, capex is expected to reach Rp965 bn this year. A large amount of the capex will be used to construct Grand Metropolitan Mall. For this mall, some 79% of the total capex required of Rp450 bn will be spent this year. To finance part of this year's capex, the company will use the remaining IPO proceeds. However, given the large amount of capex planned for this year, the company will also need to make use of external funding sources. In this regard, we believe the company may take on around Rp200 bn of bank loans. However, with a net cash position at the end of 2011, we don't think the company will face difficulties in taking on external loans.

Consumer Sector

Limited earnings downside from the weaker Rupiah 

Limited impact from rupiah depreciation

Our discussions with the companies under our coverage strongly suggest that the current Rupiah depreciation will have only a slight impact on earnings. Most of the companies are unconcerned since the impact of the Rupiah depreciation is naturally hedged through time deposits and export revenues. Furthermore, the softer food commodity prices will also help. As such, we foresee limited earnings downside from the Rupiah depreciation and retain our view of potential margins improvement from the downtrend in food commodity prices.

ASP increases to cushion earnings

All of the consumer players under our coverage are planning to increase ASP by 3-5% this year in response to the higher inflation while, at the same time, also enjoying cheaper raw material prices. In our view, higher revenues from exports will naturally offset the potential earnings downside arising from the weaker Rupiah. And although a weakening Rupiah could potentially shave 1% off gross margins, the planned increases in ASP shall help offset the negative impact on earnings.

Imported raw material costs under control

Although most of the raw material costs are USD linked, some of the costs are not directly expose to USD movement. Most of the contracts, for example, are done in IDR with turnover of 2-3 months. Thus, in the case of further adverse developments on the Rupiah, the impact will start to be seen in 4Q. Among the consumer players under our coverage, the pharmaceutical sector is most vulnerable to US dollar strength since around 80% of the raw materials are imported. Nonetheless, the pharmaceutical companies keep on average around 24% of their total cash in US dollars to cover around 5-6 months of raw material purchases. This is a natural hedge against potential currency risk.

Limited USD debt exposure

Most of the companies under our coverage have no major US dollar debt exposure. As such, we believe there is no currency risk in this regard. Here, Indofood reported that USD debt accounts for only around 27% of its total debt as per end of 1Q12, whereas Indofood CBP, the subsidiary, accounted of around 25%. Hence, both companies are in net cash position at the current period.

INDF and MYOR remain our top picks

We continue to favor Indofood Sukses Makmur (INDF) for its cheap valuation amidst the recent downtrend in stock prices and Mayora Indah (MYOR) for its superior growth.

PGAS On Track

PGAS pada tanggal 06 Juni 2012 ditutup di 3675 yang mana kalau dilihat secara jalur teknikal (garis warna hijau tebal) tetap dalam posisi uptrend. akan tetapi jika dilihat kembali pada chartnya, PGAS ini bergerak lambat karena berada pada posisi bawah bollingger-nya. akan tetapi untuk jangka panjang saham ini masih tetap layak untuk dikoleksi karena masih tetap di jalur uptrend-nya.

Untuk titik Resisten 1 di 4000 dan Resisten 2 di 4250. dan apabila titik Resisten 2 jebol maka dia akan melanjutkan kenaikkan dengan cepat.

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