Solid Indonesia Secondary Market Activities
Indonesia credit market transaction in last week trading touched IDR3,6 trillion, mostly short tenured (1-3 year) with a volume reaching IDR3,1 trillion or 86% of total market transaction last week. Looking at trading frequency, short tenured bonds (1-3 year) received higher trading frequency of 244x as compared to 35x and 15x in medium (5-7 year).
Read More...Link Net, Poised To Greatly Benefit From The Internet Boom
We initiate coverage on Link Net, a leading cable broadband and pay TV services provider with networks in affluent areas, with a BUY and DCF-based IDR6,250 TP (20% upside), implying 30x/23.2x FY15F/FY16F P/Es. It is in a significantly advantageous position to benefit from the internet boom in Indonesia as it could bank on rising wealth,.
Read More...MNC Sky Vision, Looking For a Silver Lining
We initiate coverage on MNC Sky Vision with a SELL and DCF-derived IDR1,100 TP, implying 11.5x/10.7x FY15F/FY16F EV/EBITDA. FY14 performance has been poor as subs growth has been muted (2.5m subs). We expect only 4.0% additional subs growth in FY15 on domestic economic headwinds, piracy and a clean-up of subs. We see competition remaining fierce.
Read More...Media & Broadband, Shaky Ground Ahead
While the growth of Indonesia’s media industry has slowed down to 9% (from a 21% mean in 2010-2014), media is still the most effective tool to promote consumer products, due to its long-term prospects. We believe ad spending may improve when the economy recovers. We initiate coverage on the sector with a NEUTRAL rating and.
Read More...Surya Citra Media, Sweet Bites
We reinitiate coverage on Surya Citra with a BUY and DCF-derived IDR3,000 TP, implying 29.1x/25.4x FY15F/FY16F P/Es. We believe local consumer firms will face macroeconomic headwinds in the near term, resulting in an ad spend slowdown in FY15. Yet, we do not think advertisers can cut ad spend for too long given Indonesia’s attractive structural.
Read More...Media Nusantara Citra, Overhang Remains
We reinitiate coverage on Media Nusantara Citra with a NEUTRAL call and DCF-derived TP of IDR2,100 (8% upside, 18.6x/16.0x FY15F/FY16F P/Es). Ad revenue is particularly challenging in FY15 amid economic headwinds, but we estimate that the newly-acquired I-News TV could grow at a 60% CAGR over FY15-18. We expect the group’s revenue to grow 3%/11.1%.
Read More...Mitra Adiperkasa Not Smooth Sailing Yet
It has not been smooth sailing for Mitra Adiperkasa in 2015 so far. Maintain NEUTRAL, with a lower TP of IDR5,000 (5% upside). Its specialty stores’ quarterly SSSG was level in 2Q15. With the IDR weakening against the USD, we are concerned over its ability to continue passing on higher costs by lifting prices to.
Read More...ACE Hardware Time To Awake The Captain
We reinitiate coverage of Ace Hardware Indonesia, Tbk (ACES IJ) with a NEUTRAL and a DCF-derived TP of IDR640, implying 20x/18x FY15/16F P/E. This year proves challenging due to a weak IDR vs USD which might erode ACES’ lifestyle product gross margin, increasing inventory days, while its aggressive store expansion plan might further lower its.
Read More...ACE Hardware Not Red Hot Yet
No surprises from 6M15’s performance, as sales and net income were in line with our/consensus FY15 estimates. Maintain NEUTRAL and IDR640 TP (0% upside) for now as we remained concerned with negative SSSG and persistently increasing inventory days. Furthermore, as Ace imports 40% of its goods from outside China, the recent import tariff hike would.
Read More...Ramayana Lestari Still a Weak Performance
In the current economic slowdown, Indonesia’s low-income segment has been the hardest hit – which was reflected in Ramayana’s 6M15 results. Its 6M15 earnings were weak after taking into consideration the seasonal factors related to Lebaran. The stock is still a SELL, with a IDR640 TP (9% downside). A positive re-rating catalyst would be economic.
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