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Equity Research
Wednesday, December 21, 2016
Danareksa Sekuritas – Equity Research
MARKET NEWS
*Analysts’ comment inside
Government to keep electricity tariffs and fuel prices unchanged up to March 2017
All chains in the cigarette industry will be taxed Medium-sized banks face tighter liquidity BI predicts that the average interest rate on loans will continue to
decline until next year Kalbe Farma targets Rp 1tn of sales from biological drug products Phapros to conduct a Rp 1tn IPO PPRO to conduct stock split before right issue SMRA to develop a township in Makassar Krakatau Steel budgets capex of US$200mn for the development of
several projects in 2017
Previous Reports:
AUTO: November 2016: The highest monthly car sales in 2016 Snapshot20161219
WIKA: Ending the year on a high note, Ace Hardware Indonesia: In-line 11M16 revenues Snapshot20161216
MTLA: Taking the middle way, SMGR: Steady performance--Snapshot20161215
Cement sales November: still sluggish (UNDERWEIGHT), ASRI: Solid marketing sales growth due to one-off transaction, Ramayana Lestari Sentosa: In-line 11M16 gross sales -Snapshot20161214
ACES: Continued inventory problems -Snapshot20161213
Government to keep electricity tariffs and fuel prices unchanged up to March 2017
The government, through the Ministry of Energy (ESDM), will keep electricity tariffs and fuel prices unchanged up to March 2017. This should help support purchasing power and keep inflation below 4% in 2017. (Bisnis Indonesia, Investor Daily) All chains in the cigarette industry will be taxed
The Ministry of Finance (MoF) plans to tax all chains in the cigarette industry (previously, VAT was only imposed at the producer level). The Fiscal Policy Agency of the MoF states that plans to impose VAT at all levels will also be followed by increases in VAT tariffs at the producer level from 8.7% to 9.1%. The government will also charge VAT at the consumer level at the rate of 10%. Discussions on this matter are expected to be completed in the following weeks. (Kontan) Medium-sized banks face tighter liquidity
The LDR (loan to deposit ratio) of BUKU III banks as of September 2016 reached 97.59%, or above the OJK safe limit of 92%. The LDR of the banking industry stands at 91.71%. For BUKU IV banks the LDR is 86.61%, followed by BUKU I and BUKU II banks with an LDR of 81.59% and 92.49%, respectively. As of October 2016, the LDR of BBTN reached 103.26%, the highest among the 10 largest banks. The financial director of BBTN said that the bank would maintain its proportion of corporate funds at 15%. (Kontan) BI predicts that the average interest rate on loans will continue to decline until next year
BI projects that average interest rates on loans will continue to decline next year, even though the Fed plans to raise the FFR further. Lower interest rates are expected to be the driver of growth in bank lending. (Investor Daily) Kalbe Farma targets Rp 1tn of sales from biological drug products
Kalbe Farma (KLBF) is targeting Rp 1tn from sales of biological drug products made by Kalbio Global Medika, which specifically produces biological drug raw materials and finished goods. The first product to be developed by Kalbio in 2017 will be erythropoietin for anaemic patients. For the development of Kalbio’s biotechnology production facility, KLBF has invested Rp 500bn, excluding R&D. (Bisnis Indonesia) Phapros to conduct a Rp 1tn IPO
Phapros will conduct a Rp 1tn IPO in 2018, with the proceeds allocated for expansion. Previously, Phapros decided to cancel its plans to conduct an IPO in 2017. (Kontan) PPRO to conduct stock split before right issue
PP Property (PPRO) plans to conduct a stock split (1:4) to increase the liquidity of its stock in January 2017. An AGM will be held on 27 January 2017. Two months after the stock split, the company plans to conduct a rights issue with targeted proceeds of Rp1.5tn. (Bisnis Indonesia) SMRA to develop a township in Makassar
Summarecon Agung (SMRA) through its subsidiary, Bintang Mentari indah, is preparing a township in Makassar. The company plans to develop the land in 2018. The land bank in the area totals 333ha. (Bisnis Indonesia)
Krakatau Steel budgets capex of US$200mn for the development of several projects in 2017
Krakatau Steel (KRAS) plans to spend capex of US$200mn in 2017, which is higher than this year’s expectation of US$180mn. The capex will be spent on several projects such as its Hot Strip Mill (HSM) #2 factory, its push pull picking line and its blast furnace. The source of funds will be from bank loans. The company is expected to start the blow in process in the blast furnace in 1Q17, which is a delay from the initially planned December 2016. (Bisnis Indonesia)
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