FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Bank Neo Commerce : Turning into net loss in 2Q24 on loans and NIM contraction (inline 1H24); maintain FY24F net losses (BBYB.IJ Rp 232; BUY TP Rp 600)

• BBYB reported a slight net loss of Rp20bn in 2Q24 (vs. slight net profit in 1Q24) from lower NII, partly offset by lower opex and provisions.
• As expected in our prev. notes, NIM and loan disbursement still declined qoq in 2Q24; 1H24 net loss was still in line with our FY24F est. 
• Maintain Buy rating with an unchanged TP of Rp600, supported by a low LDR and sufficient coverage to drive loan and earnings growth. 

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RESEARCH COMMENTARY

XL Axiata (EXCL IJ, TP:Rp 3,300, BUY) – 1H inline result with our forecast and above consensus, amid persistently high EBITDA margin

XL 1H24 NP reached Rp1.02tr (57.5%yoy), in line with our estimates but well above consensus, due to its steady revenue growth and historically high EBITDA margin.

• 1H revenue reached Rp17.05tr (+8.2%yoy), inline with ests.
• XL's 1H EBITDA achieved 51.0% of FY ests. as cash OPEX performs better than expected by both us and consensus, resulting in an EBITDA margin of 52.5%, trending well above the XL FY guidance of ~50%.

 

XL 2Q24 NP reached Rp485bn (-9.9%qoq, +8.0%yoy) with meaningful revenue growth, however EBITDA margin slightly decreased to 52.3% (-50bps qoq), and there was a higher tax charge.

• 2Q24 revenue grew to Rp8.6tr (+2.1%qoq, +4.8%yoy), driven by growth in net adds of 900k subs (2Q: 58.5mn subs) and steady ARPU at Rp44k (prepaid ARPU grew from 1Q24 42k to 2Q24 43k). XL reports consistent qoq increases in own-app users, reaching 32.1mn.
• Additionally, positive trends continue in fixed BB, reaching 267k subs (+6%qoq, +73%yoy), and FMC convergence at 81%. (Niko Margaronis – BRIDS)

MDKA & MBMA 2Q24 Quarterly Activity Report

• Based on its operational figures, 2Q revenue for MDKA/MBMA were in line at 50-51% of ours and 47-51% of cons estimate.
• We anticipate an expanding margin on the back of a stronger overall ASP, leading to higher cash margin, especially for copper (+707% qoq) and matte (+253% qoq).

Gold

• Sales Improved upon stronger ASP, 1H production still in line with the FY target of 100-120k Oz, although cash cost of 1,482/Oz is on the higher end of its guidance of 1,350-1,500/Oz.
• Concurrently, TB gold announced additional reserve to 562k Oz (from: 412 Oz), which should see its operation extended through 2029 (From: 2026). However, it raises its gold price assumption to US$1,750/Oz (From: 1,600).
• Pani Gold has reached 10% construction completion in 2Q24, currently applying for PSN status. Financing initiatives should be completed by 3Q24, with commissioning in line in late 2025.

Copper

• Cash margin expanded to USD1.7k/ton (From: USD218/ton), due to its persistent AISC of US$3.55/lb vs. guided US$4.5-5.25/lb.
• Production is slightly behind target at 6.7kt (FY: 14-16kt), along with a weak sales volume in 2Q of 2k/ton, -53% qoq.

Nickel

• A well anticipated cash margin expansion supported by a stronger LME price.
• Moreover, MBMA have split its cash cost for saprolite and limonite, resulting in a significantly reduced limonite cost of US$3/ton (vs. US$10/ton), significantly improving its margin. (Timothy Wijaya – BRIDS)

MARKET NEWS

SECTOR

ICP Jul24: US$82 per barrel

The average price of Indonesian Crude Price (ICP) in July 2024 increased by US$2.68 per barrel to US$82 per barrel (from US$79.31 per barrel in Jun24). According to the Ministry of Energy and Mineral Resources, the rise in ICP for Jul24 was accompanied by an increase in the prices of major crude oils in the international market, driven by ongoing tensions in the Middle East. Additionally, OPEC revised its forecast for global economic growth in 2024 upwards in its Jul24 Monthly Oil Market Report (MOMR) to 2.9% (prev: 0.1%). (Investor Daily)

 

CORPORATE

MTEL Expands Optical Fiber Target and Lowers Tenant Addition Goal

MTEL is focusing on expanding its optical fiber business and has increased its target for adding optical fiber to 14,000 km this year, up from the previous 10,000 km. According to MTEL, the optical fiber business grew by 104.9% yoy in 1H24. Meanwhile, MTEL has reduced its target for adding tenants from 4,000 to 3,000. With this adjustment, the target tenancy ratio is set to reach 1.56x. (Kontan)

 

ROTI EGMS Approved the Buyback of up to 88Mn Shares

ROTI received shareholders’ approval to buyback a maximum of 88mn shares at a maximum price of Rp1,700 per share, using internal funding sources. This move is expected to provide flexibility in long-term capital management. (IDX)

 

Telkomsel Builds 49 BTS Units in IKN

Telkomsel is currently building 49 5G and 4G base transceiver stations (BTS) in the Core Government Area (KIPP) and surrounding areas of the new capital city (IKN), in East Kalimantan. These BTS are being prepared to support the 79th Independence Day of the Republic of Indonesia, which will be celebrated in IKN. (Investor Daily)

 

TLKM Seeks a Strategic Investor for Its Data Centre Business

TLKM has appointed two financial advisors to assist in seeking a strategic investor for its data centre business, NeutraDC, valued at over US$1bn, citing a previous Reuters' report. The company currently owns 29 data centers, including five global and three enterprise data centers in Indonesia. (Reuters)