Professional Documents
Culture Documents
18 Jan, 2017
Research Report Indices Last Chg (%) MoM (%) YTD (%)
ASEAN
Indonesia Banking Industry Indonesia (IDX) 5,267 (0.06) 0.67 (0.56)
Malaysia (KLCI) 1,663 0.25 1.54 1.30
Analyst: Yap Swie Cu
Philippines (PCOMP) 7,123 (1.59) 3.98 4.13
4Q16 Earnings preview: Mandiri to drag down sector Singapore (STI) 3,013 (0.01) 2.55 3.82
performance Thailand (SET) 1,567 (0.32) 2.91 2.29
REGIONAL & USA
Mandiri to be the weakest, while BJB to show China (SHCOMP) 3,109 0.17 (0.45) 0.17
strongest 4Q16 net profit growth Hongkong (Hang Seng) 22,841 0.54 3.72 3.82
Loan loss provision to subside in most banks India (SENSEX) 27,236 (0.19) 2.82 2.29
Japan (Nikkei) 18,814 (1.48) (3.03) (1.57)
Margin to start declining Korea (KOSPI) 2,072 0.37 1.45 2.24
Lending to accelerate, but at modest pace Taiwan (TWSE) 9,355 0.67 0.30 1.09
USA (Dow Jones) 19,827 (0.30) (0.08) 0.32
Source: Bloomberg
Todays Headlines
Currencies Last Chg (%) MoM (%) Ytd (%)
INDUSTRY
USD/IDR 13,333 0.22 0.47 1.05
Bottled water industry aims to book 9% YoY USD/IDR (1-month NDF) 13,366 0.10 1.08 1.61
growth in 2017F EUR/IDR 14,223 (0.57) (1.72) (0.43)
GBP/IDR 16,162 (0.48) 3.07 2.31
JPY/IDR 117.7 (0.62) (3.77) (2.24)
CORPORATE CNY/IDR 1,942 (0.44) (0.79) (0.12)
Mayora Indah (MYOR IJ) will issue IDR500bn bond SGD/IDR 9,373 (0.37) (0.96) (0.67)
USD Index 100.3 0.85 2.61 1.87
with coupon rate of 9-9.5%, as part of its IDR2tn Source: Bloomberg
self-registered bond to refinance its Syariah bond Commodities Last Chg (%) MoM (%) YTD (%)
and financing its working capital
Coal (USD/ton) - Newcastle 84.6 1.99 (2.25) (4.36)
Sentul City (BKSL IJ) targets 2017 marketing sales Crude oil (USD/b) - Brent 55.5 (0.70) (0.63) (2.38)
to reach IDR1.2tn (vs 2016: IDR800bn) or grow by Gold (USD/toz) - Spot 1,217 1.19 7.24 6.06
Nickel (USD/mt) - LME 10,160 (0.97) (9.04) 1.40
50% YoY
CPO (MYR/mt) - MDEX 3,255 1.50 2.10 1.15
Astra International (ASII IJ) Astratel Nusantara Soybean oil (USd/lb) - Chicago 35.6 0.54 (3.21) 3.31
acquired 18% ownerships of PT Lintas Marga Skimmed Milk (USD/mt) - NZ 2,600 (3.70) (6.31) (5.11)
Corn (USD/mt) - Chicago 366 1.95 2.60 3.84
Sedaya (LMS) Pulp (USD/t) - NBSK 809 (0.01) 0.02 0.01
Semen Indonesia (SMGR IJ) to postpone the Sugar (USD/lb) - ICE Futures 20.7 1.02 13.78 6.25
Tin (USD/mt) - LME 21,100 0.36 (0.61) (0.12)
operation Rembang factory
Wheat (USD/bsh) - Chicago 434 1.76 5.93 6.25
Source: Bloomberg
Please see the overleaf for news details
ETF & ADR Last Chg (%) MoM (%) YTD (%)
Turnover
IDX - Top Movers & Laggards Last Chg (%)
(IDR bn) EIDO US (USD) 24.3 (0.73) 2.23 0.79
TLK US (USD) 29.6 0.44 3.93 1.47
MOVERS Source: Bloomberg
ASII ASTRA INTERNATIONAL TBK PT 8,050 0.94 47.1 Indonesian Government Bond Yield - Generic
TOWR SARANA MENARA NUSANTARA PT 3,500 6.38 2.8
TLKM TELEKOMUNIKASI INDONESIA PER 3,970 0.51 182.3 Yield 2Y Yield 5Y Yield 10Y
Research
Loan loss provision to subside in most banks. We expect most of the banks under our coverage would lower their
credit costs in the final quarter of the year, in line with slower formation of new NPL. We estimate average
annualized credit cost in 4Q16 to fall to 2.0% from 2.5% in a quarter before. Bank Mandiri is expected to book the
highest annualized credit cost of 3.2% as it intends to improve its loan loss coverage to 140% level from 126% at
end 3Q16. Meanwhile, Bank Central Asia (BBCA IJ) would book the lowest annualized credit cost of 1% as it had the
highest provision coverage of slightly above 200%.
Margin to start declining. From the recent 11M16 unconsolidated results, we notice that net interest income
showed decelerating growth in contrast to the acceleration of lending growth, which indicated that margin
compression was in sight. Highest contraction may happen at Bank Rakyat Indonesia (BRI/BBRI IJ) as its time
deposit portion rose significantly during the first two months of 4Q16 to catch up the robust lending growth.
Lending to accelerate, but at modest pace. Due to seasonal factor, lending growth was accelerated in 4Q16,
though the pace was lower compared to previous years amid weak economic condition. In 11M16, state banks
showed above average lending growth, like we had expected before, benefitted by governments infrastructure
projects, micro lending and low-cost housing programs. Bank Negara Indonesia (BNI/BBNI IJ) showed the highest
lending growth of 17.8% YTD in 11M16, followed by BJB at 15.2% YTD, Bank Tabungan Negara (BTN/BBTN IJ) at
13.7% YTD, BRI at 12.3% YTD and Bank Mandiri at 7.2% YTD. Meanwhile, Bank Central Asia showed flat lending
growth (0.5% YTD) in the period, while Bank Danamons total lending contracted by 8% YTD.
Top pick. We believe the top four banks - Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, and Bank
Negara Indonesia would have better position better compared to smaller peers to face new challenge of tight
liquidity and declining margin in the coming quarters. Beside having better liquidity position, their more advance
banking infrastructure would allow them to have faster fee-based business growth and operate more efficiently to
offset falling net interest income growth. Among these four banks, BRI and BNI are having more attractive
valuation at FY17F PE of 9.6x and 8.7x, respectively.
News
INDUSTRY
Bottled water industry aims to book 9% YoY growth in 2017F
According to Bottled Water Industry Association (Aspadin) this industry is expected to grow by 9% YoY in 2017F,
equal to the 2016FY growth at 8.5-9% YoY. The increment is mainly driven by sales volume growth that expected to
reach 2.41bn liters as the Aspadin members dont plan to set higher price sales. To capture this, the Aspadin
members plans to increase its production volume despite utilization rate that already reached 90%. (Investor Daily)
CORPORATE
Mayora Indah (MYOR IJ) will issue IDR500bn bond with coupon rate of 9-9.5%, as part of its IDR2tn self-registered
bond to refinance its Syariah bond and financing its working capital. (Kontan)
Sentul City (BKSL IJ) targets 2017 marketing sales to reach IDR1.2tn (vs 2016: IDR800bn) or grow by 50% YoY.
(Bisnis Indonesia)
Astra International (ASII IJ) Astratel Nusantara acquired 18% ownerships of PT Lintas Marga Sedaya (LMS)
Wiwiek Santoso, Director of PT Astratel Nusantara (AN) said that the total transaction acquiring 22.3% of LMS (Cipali
toll road operator) total shares reach IDR2.5tn. Currently, AN has acquired 18% of the shares while the rest is
shareholders loan which will be converted to shares. (Bisnis Indonesia)
Helmi Therik
Series Tenor Price Valuation. The select bond such as FR0059 and
FR0072 traded at 96.50 and 102.20 respectively,
FR0059 10.33 96.50
which based on our calculation was at the fair
FR0072 19.33 102.22 price (neutral).
FR0074 15.58 97.14
Foreign Reserve in bn USD
FR0068 17.16 102.85
Indonesia Rating
S&P BB+
Moodys Baa3
Fitch BBB-
Yield
Last Fair Bps Curve Spread to Trading
Series Tenor Coupon Price Price (+/-) YTM (NSS) YC (bps) Idea
SPN03170209 0.06 5.8% 99.74 100.06 -0.32 4.55% 4.4% 0.1 Neutral
SPNS24022017 0.1 6.0% 99.55 100.11 -0.56 4.55% 4.6% -0.1 Neutral
SPN12170302 0.12 6.3% 99.44 100.15 -0.71 4.90% 4.7% 0.2 Neutral
SPN12170511 2.74 6.2% 98.53 102.23 -3.7 4.88% 5.3% -0.4 Neutral
PBS009 1.02 0.0% 101.6 94.02 7.58 6.02% 6.3% -0.2 Neutral
SR007 1.14 8.3% 101.35 102.09 -0.74 7.02% 6.3% 0.7 Under value
ORI012 1.74 9.0% 103.4 103.71 -0.31 6.92% 6.6% 0.3 Neutral
SR008 2.14 0.0% 102.1 86.9 15.2 7.33% 6.8% 0.5 Neutral
FR0069 2.24 7.9% 102.1 102.1 0 6.84% 6.8% 0 Neutral
PBS006 3.66 0.0% 100.93 77.43 23.5 7.25% 7.2% 0 Neutral
FR0031 3.83 11.0% 112.75 112.12 0.63 7.12% 7.2% -0.1 Neutral
FR0053 4.49 8.3% 103.8 103.37 0.43 7.24% 7.4% -0.1 Neutral
FR0061 5.32 7.0% 99.25 97.94 1.31 7.17% 7.5% -0.3 Neutral
FR0063 6.32 5.6% 90.75 90.21 0.54 7.49% 7.6% -0.1 Neutral
FR0070 7.16 8.4% 104.5 103.87 0.63 7.55% 7.7% -0.1 Neutral
FR0040 8.66 11.0% 120.4 119.52 0.88 7.72% 7.8% -0.1 Neutral
FR0056 9.66 8.4% 105.58 103.69 1.89 7.58% 7.8% -0.2 Neutral
FR0059 10.33 7.0% 96.5 94.21 2.29 7.49% 7.8% -0.3 Neutral
FR0047 11.08 10.0% 115.26 115.42 -0.16 7.91% 7.9% 0.1 Neutral
FR0073 14.33 8.8% 106.75 106.95 -0.2 7.95% 8.0% 0 Neutral
FR0054 14.5 9.5% 112.14 112.87 -0.73 8.06% 8.0% 0.1 Neutral
PBS012 14.83 0.0% 105.5 32.14 73.36 8.22% 8.0% 0.3 Neutral
FR0058 15.42 8.3% 102.5 102.88 -0.38 7.96% 8.0% 0 Neutral
FR0065 16.33 6.6% 90 87.76 2.24 7.71% 8.0% -0.3 Neutral
FR0072 19.33 8.3% 102.22 102.93 -0.71 8.02% 8.0% 0 Neutral
FR0057 24.34 9.5% 111 115.07 -4.07 8.43% 8.1% 0.4 Neutral
FR0062 25.25 6.4% 77.5 82.27 -4.77 8.56% 8.1% 0.5 Neutral
FR0067 27.09 8.8% 103.56 107.68 -4.12 8.41% 8.1% 0.3 Neutral
Research
Institutional Sales
Kevin Tandrawan
Sales Trader
+62 21 278 38914
kevin.tandrawan@yuanta.co.id
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