FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Wintermar Offshore Marine: Riding the charter rates upcycle; initiate with Buy (WINS.IJ Rp 505; BUY TP Rp 760)

  • We expect DCR to be supported by growing demand paired with supply tightness in the Gulf of Mexico, W. Africa, and S. America.
  • We forecast WINS to deliver 117%/90% core EPS growth in FY24-25E through higher utilization, daily rates, and higher vessel count.
  • We initiate with a Buy rating on WINS as it is attractively positioned in the cycle; our TP is Rp760 (blended of PB and PE).

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Macro Strategy: The Entropy of Risk

  • BI’s rate hike was balanced by adding to the industries qualified for incentives, supporting liquidity amid a weaker fiscal space outlook.
  • The reemergence of two risks - stagflation and trade tensions may mean global monetary policy is more uncertain.  This warrants caution.
  • The MSME Business Index remained in the expansionary zone in 1Q24, while the outlook for 2Q24 remains bright backed by Lebaran demand

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RESEARCH COMMENTARY

Poultry – 1st week of August 2024 Price Update

  • Livebird (LB) prices are hovering around Rp18k/kg post-Suro month. The average price in the first week of Aug24 increased to Rp17.9k/kg from an average of Rp16.3k in the last week of Jul24, a 10% increase.
  • There is no new data on DOC, which remains at Rp7.5k/chick.
  • The local corn price crept up to Rp5.1k/kg recently, while the average price in the first week of Aug24 increased to Rp4.8k/kg from Rp4.7k/kg in the previous week (+2.1% wow).
  • The price of soybean meal (SBM) declined to its YTD low of US$326/t in the first week of Aug24. The average price in Aug24 declined to US$347 (-3% mom, -19% yoy).
  • While LB prices have yet to return to pre-Suro levels, we believe the lower feed costs will provide a buffer to LB margins. The short-term pressure on local corn prices due to seasonality was somewhat offset by the significant drop in SBM prices. (Victor Stefano & Wilastita Muthia Sofi – BRIDS)

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MARKET NEWS

CORPORATE

ADRO Targets 3 Water Processing Projects to be Operational by 2024

ADRO continues to drive its water processing business this year. ADRO is aiming for three development projects to be operational by 2024. The water processing business is managed by ADRO through its Adaro Water division. ADRO stated that Adaro Water operates four water processing facilities with a capacity of 1,470 liters per second. Currently, Adaro Water is developing four projects with a total capacity of 1,100 liters per second. (Bisnis)

 

EXCL and FREN Merger Awaiting Due Diligence

EXCL and FREN have provided the latest update on their merger activity, stating that the process is still ongoing. The due diligence stage has not yet been completed by either party. There is no further detailed information regarding the exact schedule for the completion of the due diligence process. (Bisnis)

 

MEDC Prepares Rp941.8bn In Funds for Bonds Maturing in Nov24

MEDC prepares Rp941.8bn for the payment of the Principal of Continuous Bonds IV Phase II Year 2021 Series A, which will mature on November 23, 2024. The funds come from the issuance of Continuous Bonds V Phase II Year 2024, totaling Rp1.5tr, to pay off the Company's Rupiah bonds. (Emiten News)

 

PGAS Secures Liquefied Natural Gas Cargo Contract from DSLNG

PGAS has signed a framework contract for the purchase of liquefied natural gas (LNG) from PT Donggi-Senoro LNG (DSLNG) through a Master LNG Sale and Purchase Agreement (MSPA). According to PGAS, the agreement with DSLNG was finalized on August 8, 2024. Additionally, PGAS has also secured the purchase of one LNG cargo for delivery in September 2024 through a confirmation memorandum (CM) agreement. (Bisnis)

 

TOWR Signs Credit Facility Agreement with PT Bank Mizuho Indonesia

TOWR has signed a Credit Facility Agreement with PT Bank Mizuho Indonesia. The agreement involves the company's subsidiaries, PT Profesional Telekomunikasi Indonesia (Protelindo) and PT Iforte Solusi Infotek (Iforte), as the debtors, while Mizuho acts as the lender. Signed on August 7, 2024, the agreement has a commitment value of JPY14bn, which will be used for general corporate purposes, including but not limited to capital expenditure and refinancing of existing debt. (Emiten News)