FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Indocement Tunggal Prakarsa: May24 sales volume: solid industry and INTP sales (INTP.IJ Rp 7,400; BUY; TP Rp 8,400)

• Industry/INTP recorded 11%/21% yoy vol growth in May24, causing the 5M24 sales vol to expand by 3%/10% yoy.
• INTP bulk sales grew further in May24 (+50% yoy) vs bagged (+9%-11% yoy), bringing some risk to ASP despite recent bagged price increases.
• We think the coming 1-2 months data will be crucial for the 2024 outlook. Reiterate Buy rating on INTP with a TP of Rp 8,400.

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Summarecon Agung: Strategically Located Projects in High-Density Areas, the cheapest in the sector (SMRA.IJ Rp 505; BUY; TP Rp 1,000)

• 5M24 pre-sales were backed by landed-residential projects, which is aligned with the sector’s current macro-theme, we believe.
• The company expects to backload its FY24F presales in 2H24, from new launches in Bogor, Bandung, and the new Bitung project.
• We resume our coverage with a Buy rating and disc. to RNAV-based TP of Rp1,000.

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RESEARCH COMMENTARY

BANK May24 Results

• BANK recorded a 28% decline in its net loss to Rp61.1bn in 5M24, as it recorded a provisions reversal amounting to Rp5.3bn, and its CIR fell to 147.4% from 190.3%, resulting in an 18% improvement in PPOP.
• In 5M24, NIM fell to 4.8% (-253bps yoy) despite the flat EA yield and a 41bps lower CoF, as the FDR significantly declined to 77% (-4,767bps yoy).
• The net loss in May24 was reported at Rp7.9bn (-13% mom, -63% yoy), as PPOP was flat mom and higher 43% yoy due to a decline in the CIR to 125.2% (-300bps mom, -4,592bps yoy).
• On a monthly basis, NIM rose 134bps to 6.6% due to a 112bps mom increase in the EA yield to 12.3% and a 10bps mom decline in the CoF to 6.3%.
• In May24, NIM declined 223bps yoy despite the 48bps yoy improvement in the EA yield, as the CoF rose 17bps yoy, and financing and customer deposits grew significantly by 119% and 229% yoy, respectively, leading to a 4,767bps decline in the LDR.
• Compared to FY23, NIM was 206bps lower in 5M24 due to the 11bps higher CoF and 35bps lower EA yield. However, CIR improved by 4,363bps in 5M24. (Victor Stefano & Naura Reyhan Muchlis - BRIDS)

BTPS Bank Only May24 Results

• BTPS reported net profits of Rp105bn in May24 (+4% mom, -3% yoy), with the CoC coming in slightly higher mom to 12.4% (-234bps yoy).
• In 5M24, BTPS’ NP declined 30% yoy to Rp465bn reflecting a lower loans balance (-14%), lower NIM (-100bps), higher opex (+10%), and higher provisions (+16%).
• The 5M24 NP forms 35% of the consensus FY24F, much lower than the 5M23 achievement of 62% but partly due to the low base in 2H23. 
• Despite the mom higher CoC in May24, 5M24’s CoC of 13.2% (+269bps yoy) remained lower than FY23’s CoC of 16.1%. 
• However, aside from the better CoC, compared to FY23`s ratios, the EA yield was lower (-119bps), CoF was higher (+39bps), NIM was lower (-133bps), and CIR was higher (+494bps).
• Loans declined 3% mom to Rp10.4tr (-14% yoy). While the CoF rose 18bps mom to 4.5%, deposits still declined by 2% mom to Rp12.0tr (-9% yoy).
• As the bank’s monthly CoC still trended upwards in the last two months and pressure on the CoF resumed after the recent rate hike, we remain cautious on the bank`s financial performance. (Victor Stefano & Naura Reyhan Muchlis - BRIDS)

MARKET NEWS

MACROECONOMY

US Producer Price Index Slows to 2.2% yoy in May24

The US Producer Price Index slowed to 2.2% yoy in May24 after four months of acceleration. This figure is well below market expectations of 2.5%. On a monthly basis, core PPI declined by 0.2%, or softer than the 0.1% mom growth that had been expected by the market. (Trading Economics)

 

SECTOR

Consumer: Bulog's Rice Imports Realization Reached 2Mt

According to Perum Bulog, the realization of rice imports has reached 2Mt of the 3.6Mt rice imports quota in 2024. The imports were obtained from various countries such as Vietnam, Thailand and Pakistan. Based on BPS KSA, rice production in Jan-Jul24 was down by 2.64Mt YoY. (Kontan)

 

CORPORATE

BELI to Issue 9.4bn Shares through a Private Placement

BELI plans to issue new shares at a maximum of 7.63% of its issued capital or a maximum of 9.4bn shares. According to the company, the private placement will be held in two schemes. First, under the MESOP program, BELI will issue a maximum of 4.5bn shares. Second, the Company will issue 4.9bn new shares under a capital increase scheme other than the MESOP program. This private placement will take place from 15 Dec 2024 to 14 Jan 2029. (Kontan)

 

EMTK to Distribute Dividends of Rp 4/share

EMTK will distribute dividends of Rp4/share, totaling Rp244,291,219,732. In addition, shareholders also approved the implementation of the Management and Employee Share Ownership Program (MESOP) with a maximum of 75mn shares. (Emiten News)

 

EXCL and FREN Merger Expected to be Completed in 2024

The EXCL and FREN merger plan is expected to be completed by the end of this year. This is after XL Axiata’s management confirmed that it will complete the due diligence process, no later than four months. (Kontan)

 

HEAL Establishes a Value Partnership with Siemens Healthineers

HEAL has established a value partnership with Siemens Healthineers. The value partnership includes a long-term commitment from Hermina Hospital Group to acquire diagnostic imaging equipment as well as full maintenance of Siemens medical devices until 2036. (Investor ID)

 

MYOR is Offering a Sustainable Public Offering of Bonds with Targeted Funds of Rp2.5tr

MYOR is offering a sustainable public offering of bonds with targeted funds of Rp2.5tr. The company will issue phase 1 bonds in 2024 with a principal amount of Rp500bn, offering them at 100% of the principal amount. The first bond interest payment will be made on October 5, 2024, and full bond payments will be made on the maturity date of July 5, 2029 for series A and July 5, 2031 for series B. (Investor Daily)

 

TINS and Yunnan Tin Explore Cooperation Opportunities

TINS and Yunnan Tin, a tin producer and exporter from China, began to explore opportunities for strategic cooperation. This meeting was a follow-up discussion after the International Tin Conference. There are several strategic matters discussed between TINS and Yunnan Tin, namely related to marketing aspects, aspects of technology and product development and also supply to subsidiaries. (Kontan)

 

WIFI completes construction of 200,000 homepasses for Viberlink

WIFI through its subsidiary, PT Integrasi Jaringan Ekosistem has completed the construction of 200,000 homepasses for Viberlink, an Internet Service Provider (ISP). Currently, Ecosystem Network Integration, known as Weave, is also finalizing cooperation with operators to build 1mn homepasses. Weave is also collaborating with PGAS to build a gas pipeline network and internet services for 2.5mn households and commercial customers. (Kontan)