FROM EQUITY RESEARCH
Aneka Tambang:  Completion of project divestments set the stage for more future downstream projects (ANTM.IJ IDR 1,645 BUY.TP IDR 1,960) ·         ANTM divested SDA with proceeds of US$416mn and contingent rights to receive further payments within 36 months. ·         It also completed the divestment of Feni Haltim (FHT), with potential one-off gain of Rp599bn in 4Q23. ·         We maintain our Buy rating and TP of Rp1,960 for now, based on the valuation the existing projects. To see the full version of this report, please click here   To see the full version of this snapshot, please click here   MARKET NEWS

MACROECONOMY

Indonesia Retail Sales Rose by 2.1% yoy in Nov23

Retail sales underwent a downward revision in November, adjusted to 2.1% from 2.9% in the initial estimate. Sales experienced a softening trend across almost all categories, notably in Information & Communication (-11.3% compared to -9.9%) and Cultural & Recreational (-4.7% versus -3.7%) goods, further extending the contraction. Projections for December anticipate a modest 0.1% annual increase in retail sales, even during the holiday season. The expected surge in vehicle fuel sales is offset by a decline in recreational goods sales, indicating a consumer preference for allocating more towards transportation costs than recreational items. (Bank Indonesia)

 

US Consumer Price Index for Dec23 is Scheduled for Release Tonight

The US Consumer Price Index (CPI) for December 2023 is scheduled for release tonight at 08:30 PM. Market expectations anticipate a marginal increase in headline inflation to 3.2% from November's 3.1%. In contrast, core inflation is projected to decline to 3.8% yoy (compared to November's 4%), marking the lowest core inflation rate in over 2.5 years. Should the actual core inflation figure continue its downward trend, it is likely to alleviate the recent hawkish sentiments expressed by certain members of the FOMC. (Bloomberg)

 

SECTOR

Government Incentive for Imported CBU Electric Cars

The Minister of Investment Regulation (Permeninves) No. 6 of 2023 ensures incentives in the form of import duty exemption and PPnBM to be borne by the government for the import of completely built-up (CBU) electric cars. The incentive is given to manufacturers committed to or invested in building electric car factories in Indonesia. This incentive also applies to conventional car manufacturers who want to switch production to electric cars. The period for providing duty-free incentives and PPnBM is valid until the end of December 2025. (Kontan)

 

CORPORATE

ADHI New Contract Exceeds 2023 Target, Reaching Rp37.4tr

ADHI reported a new contract value of Rp37.4tr (+58% yoy) for 2023, exceeding the company's aim of a 15% - 20% increase compared to 2022, when new contracts worth Rp23.7tr were realized. The engineering and construction business line accounted for 93% of new contract acquisitions at ADHI. Furthermore, the manufacturing line accounted for 3%, and the remaining came from the property, hospitality, and investment business lines. (Bisnis)

 

AVIA Continues its Rp1tr Buyback Program

AVIA is still in the process of carrying out a share repurchase that began at the end of December and has set aside Rp1tr for this purpose. The maximum number of shares that can be repurchased is 1.425bn, approximately 2.3% of the company's total paid-up and issued capital. Aside from that, AVIA's share buyback activity does not dominate the company's total share market transactions. According to AVIA shareholder statistics as of January 9, 2024, AVIA repurchased 104.24mn shares, representing approximately 7.3% of the maximum quantity specified. (Bisnis)

 

ISAT Evolves into a TechCo Company

ISAT sold its data center assets to BDX Indonesia for Rp2.62tr. This move is related to the company's plan to evolve from a telecommunications company to a technology company. The company said BDx Indonesia has agreed to acquire a portfolio of data centers in the form of carrier-neutral colocation and edge sites. Through this transaction, BDx Indonesia has a total IT capacity of more than 150MW+ in Indonesia through 10 colocation facilities, including a new 15MW facility under construction. These facilities are expected to be ready for operation in the fourth quarter of 2024. (Investor Daily)

 

PGAS Targets LNG Terminal Revitalization to Be Completed by 2025

PGAS targets the revitalization of the Arun LNG terminal to be completed in the third quarter of 2025. This commercial strategy is carried out in order to capitalize on the attractive potential of the Asian LNG market. According to the conclusions of market analysis in PGAS public exposure material, there is a prospective requirement for up to three LNG tanks in Asia-Pacific. The Arun LNG port is strategically placed along a major trade route adjacent to Southeast and South Asia's expanding LNG market. (Kontan)

 

TPIA Allocates Capex of US$400mn for 2024

TPIA plans to spend US$400mn on capital expenditure (capex) in 2024. The majority of the capex, up to US$300mn, will be used to build a world-scale integrated chlor-alkali and ethylene dichloride plant (CA-EDC plant). The project will take between 26 and 28 months to complete. The CA-EDC plant will be run by PT Chandra Asri Alkali, a subsidiary of Chandra Asri Perkasa (CAP) 2, which will produce 500,000 metric tons of ethylene dichloride and more than 400,000 metric tons of caustic soda each year. (Kontan)