FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

MAP Aktif : 2H24 recovery expected, but overseas expansion remains a risk; maintain Buy rating with a lower TP (MAPA.IJ Rp 845; BUY TP Rp 1,000)

• MAPA’s expansion faces challenges, leading to inventory buildup and numerous promotions, hence, margin pressure in 1H24.
• We cut our FY24/25F NP by 11%/13% due to more conservative store expansion plans in FY25 and lower margin estimates.
• We anticipate a stronger performance in 2H24 but remain cautious on overseas expansion; Maintain Buy rating with a lower TP of Rp1,000.

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Mitra Adiperkasa FY24-25 estimates cut, but expect a stronger recovery in 2H24 and FY25 (MAPI.IJ Rp 1,505; BUY TP Rp 2,000)

• MAPI’s specialty segment drove 1H24 growth (+32% yoy), while Fashion/ Digimap’s solid margins partially cushioned 1H24 EBIT margin.
• We lowered our FY24/25F net profit est. by 8.5%/6.5% but expect a stronger 2H24 and continued recovery in FY25.
• Steady growth and profitable Fashion/Digimap businesses underscore strong value proposition; maintain Buy rating with lower TP of Rp2,000.

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MARKET NEWS

RESEARCH COMMENTARY

PANI (Non-Rated): Landbank Injection from Agung Sedayu Group (Rp3.68tr for 147.5ha; implied price at Rp2.5mn/sqm)

• PANI recently completed an affiliated transaction of landbank purchase from PT Wahana Utama Karya (WUK, Agung Sedayu subsidiary), valued at Rp3.68tr for 147.5ha, implying Rp2.5mn/sqm acquisition cost. The transaction value is slightly higher than the company's previous landbank injection during Rights Issue I-II (valued at ~Rp1.2mn/sqm), yet justifiable given its location, which is closer to the PIK2 future city center (see Map).
• This transaction is part of the private placement I-II proceeds of Rp6.53tr, @Rp5,200/share. After this transaction, the remaining proceed from Private Placement is Rp2.84tr; while our last estimation of possible landbank size to be injected is around ~619ha, which should imply future acq.price of ~Rp0.5mn/sqm, assuming future trx. not using PANI's internal cash (at Rp2.7tr per 1H24). Assuming this, future landbank injection should be located around PIK2 ext. area.
• Our last estimates of PANI's RNAV stood at Rp125tr, with the injection of this landbank, we estimate NAV could be added by Rp16tr (assuming Land ASP of Rp18mn/sqm with 60% plot ratio), resulting in PANI's total NAV of Rp143tr (current price trading at 45% discount, relatively premium compared to peers avg of 70%). (Ismail Fakhri Suweleh & Wilastita Sofi)

SAQU Jul24 Results

• SAQU reported a net loss of Rp117.8bn in 7M24, as it recorded a CIR of 123%. This was due to aggressive marketing, evidenced by a 38x yoy increase in promotion expenses, alongside a 47% yoy rise in personnel expenses.
• In Jul24, SAQU recorded a net loss of Rp33.2bn (+15% mom) attributed to a rise in CIR to 152.3% (+17bps mom), as opex grew by 5% mom, driven by a 33% mom increase in other expenses.
• However, its NIM improved by 16bps mom to 5.0% in Jul24, despite the 21bps mom increase in CoF to 5.0%, as EA yield rose to 7.5% (+29bps mom)
• Loans remained flat mom, while customer deposits grew by 4% mom, resulting in a lower LDR of 82.0% (-300bps mom) in Jul24.
• It is worth noting that SAQU was launched as a digital bank only towards the end of FY23. Thus, in our view, a yearly comparison is not particularly useful in evaluating the bank’s performance.
• In our view, SAQU’s performance was largely impacted by its current stage of development, which requires significant promotional costs, affecting its operating expenses and CIR. We expect this trend to continue until the bank establishes brand awareness, at which point promotion-related costs should subside. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

MACROECONOMY

Fed Chair Powell Signals Policy Adjustment

The Fed Chairman Jerome Powell stated that the time has come for policy to adjust, cementing the expectation of rate cut in September. He noted that further cooling of the labor market is not welcomed, emphasizing the upside risks to inflation have diminished while the downside risk to the unemployment have increased. (Bloomberg)

 

SECTOR

Government Requests Business Actors to Stabilize Livebird Prices

The government, through the Ministry of Agriculture, in collaboration with the Food Task Force of the National Police and the National Food Agency (NFA), has firmly requested poultry industry players to stabilize livebird prices at the farmer level, ensuring they are at least above the production cost. This commitment to stabilize prices will be effective starting August 21, 2024, and its implementation will be coordinated by the Indonesian Poultry Association in their respective regions.

 

In a coordination meeting at the Ministry of Agriculture on August 21, 2024, the Director General of Livestock and Animal Health detailed that sanctions will be imposed in accordance with regulations, including a review of the issuance of Grand Parent Stock import recommendations and feed raw material approvals, as well as a reduction in the allocation of broiler Grand Parent Stock for the current and following years. (Investor Daily)

 

CORPORATE

MDKA Injected Capital into Business Entity Worth US$135 Million

MDKA is strengthening the capital of Pani Brsama Jaya (PBJ) by adding US$135mn. With this addition, the total financing amount rose to US$260mn from the original US$125mn. This loan will be used by PBJ for general corporate purposes, capex, operational costs, and working capital. The loan is subject to a Secured Overnight Financing Rate (SOFR) of 3 months plus a margin of 5.76%. The loan will mature in the fifth year from the date of the initial agreement. (Emiten News)

 

Telkomsel 5G Customers Rose by 97% yoy

TLKM's expansion of 5G infrastructure and network has received a positive market response, as evidenced by the increase in Telkomsel's 5G network users. According to Telkomsel, as of July 2024, there are 3.2mn Telkomsel 5G customers, a surge of approximately 97% yoy. (Kontan)

 

TINS Partners with Yunnan Tin to Expand International Market

TINS has entered into a strategic partnership with Yunnan Tin Co., Ltd to strengthen both companies' positions in the global market. This collaboration includes leveraging mineral resources, mining, smelting and refining technology, international trade, information exchange, and downstream production development. According to TINS, this partnership will enhance production capacity and operational efficiency, while also opening up new access to a broader international market. (Investor Daily)