Indonesia

• The FY24 guidance reflects a self-funded development and debt repayment programme.
• While a reduced capital programme, we believe this is a prudent strategy with upside optionality should additional funds from the Bulu sale or higher oil prices materialize.
• As a result of the Bulu sale not completed yet, Criterium is carrying more debt than we expected (the repayment of US$5.5 mm of debt in March would have also triggered a US$3.8 mm debt write down).

• Delta Djakarta (DLTA IJ) came out with subpar FY23 results, with revenues/profits down 5%/13% YoY with a loss of marketshare to Multi Bintang Indonesia (MLBI IJ) 
• Q4 2023 showed an improvement, with revenues/profits up 1.5%/4% YoY, breaking a sequence of three consecutive quarters of negative growth.
• Trading at 13x FY23 PE with 25% of the market cap in cash and 9-10% dividend yield, the stock is worth exploring, although we prefer Multi Bintang Indonesia (MLBI IJ) 

• Ultrajaya Milk (ULTJ IJ) 4Q2023 and FY2023 confirmed a recovery on both its dairy and carton tea segments, with strong growth and a normalisation of raw material costs boosting margins.
• ULTJ continue to focus on new product launches in dairy and carton tea and growing its distribution network with its new distrbution centre at MM1200 under pilot testing.
• Prospects for FY2024 look healthy with expanding distribution and a number of new products helping to drive growth. Valuations look reasonable versus listed competitor Cisarua Mountain Dairy (CMRY IJ).  

• Mitra Adiperkasa (MAPI IJ) finished the year with strong sales growth of +17.4% YoY in 4Q2023 with solid growth across all segments and improving margins. 
• The company continues to add to its 150-strong brand portfolio in Indonesia, as well as extending its reach further in Southeast Asia and growing its omnichannel capabilities. 
• MAPI remains our top retail pick in Indonesia with its focus on the resilient upper-middle segment in Indonesia and increasing regional exposure. Valuations remain attractive at 12.5x FY2024E PER.

• Kawasan Industri Jababeka released a strong set of FY2023 results, with revenue growth of 20% overall and EBITDA increasing by +15% YoY due to higher land sales at Kendal.
• KIJA also saw strong recurrent revenue from its infrastructure pillar making up 44% of sales. Marketing sales came in above its target and it is projecting a higher 2024 number.,
• The company’s Kendal Estate is a key beneficiary of shifting supply chains from China with 81% of sales to foreign companies and marketing sales increasing 68% YoY in 2023. 

• Multi Bintang Indonesia (MLBI IJ) reported its FY23 earnings with revenues/profits up 6.7%/15% YoY.  Q4 FY23 revenues and profits were up 5.6%/17% YoY. 
• OPM (%) expanded 180 bps from 40.6% to 42.4%, and NPAT margins 240 bps to 32.1%. We believe that trends will continue to improve in 2024.
• At its board meeting, we expect the company to declare a full-year FY23 dividend of 500 Rph/share ( implying a 7% yield). The H123 dividend was 110 Rph/share.

• PT Nippon Indosari Corpindo (ROTI IJ) saw a relatively slow finish to the year with a slight decline in sales but the key drag came from a higher return rate.
• 4Q2023 did not see the usual seasonal spike but 2024 has started well and the return rate has come down, which will boost profitability as new products gain traction. 
• ROTI has launched several more affordable products to help drive its push into general trade whilst raw material prices remain under control. Valuations are attractive with recovery ahead.

• Semen Indonesia (SMGR IJ) released a positive set of results in FY2023 despite a difficult operating environment and intense competition through increasing efficiencies linked to sustainability at the same time. 
• The company continues to work on improving production efficiency as well as distribution through greater digitalisation and is benefiting from synergies from Semen Baturaja.
• Increasing government infrastructure spending will help to drive growth in demand for bulk cement, especially from the new capital, with Semen Indonesia being a prime beneficiary. Valuations look attractive. 

• Bukalapak.com (BUKA IJ) booked a slightly weaker finish to the year than expected with a slowdown in revenue growth in 4Q2023 and a miss on adjusted EBITDA breakeven.
• The key reason was a thinning out of non-performing specialty businesses which impacted short-term revenues but will improve revenues and adjusted EBITDA. as the focus shifts to higher take-rate businesses.
• Bukalapak.com PT Tbk (BUKA IJ) is guiding for +15-20% revenue growth and positive adjusted EBITDA in 2024 with execution on this being paramount. Valuations remain attractive.

• Siloam International Hospitals (SILO IJ) released a strong set of numbers in FY2023, with increasing inpatient admissions and treatment intensity despite a normalising environment coming out of the pandemic.
• The average revenue per occupied bed remained significantly above peers, whilst the company continued to focus on highly complex clinical programs across cardiology, neurology, oncology, and orthopaedic surgery. 
• Siloam International Hospitals takes a blended approach to premium, value-seeker, and BPJS patients, optimising  efficiencies around the latter. Valuations and growth stack up favourably versus its peers.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• MGM China Holdings
• Pakuwon Jati

• Indonesian edutech platform PINTAR announced that it has raised US$3 million in Pre-Series A funding led by Havez Capital with the participation of SIG Venture Capital.
• In a press statement, the startup said that the funding marks a new chapter for PINTAR in achieving its mission of helping Indonesian workers to upskill and get out of the middle-income trap with the help of technology.
• Starting in 2013 under the HarukaEdu and Pintaria brands, PINTAR offers various online education programmes for college and university levels, enterprise training programmes for employees, boot camp certification and masterclasses.

• It’s the largest bank by assets in Indonesia, but its loan growth is about 2x the country aggregate growth rate.
• NPL decline is stronger than most all banks in the country over the past few years, implications for credit costs are positive.
• Boring old costs should not be ignored, especially where they are driving radical expansion of ROA.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Hongqiao
• Delta Dunia Makmur

• GoTo Gojek Tokopedia (GOTO IJ) 4Q2023 results revealed another sequential increase in GTV and positive adjusted EBITDA for both ODS and e-commerce, despite reduced incentive and marketing spending.
• GoTo achieved positive top-line growth by expanding its total addressable market through more affordable products and a strong performance from consumer lending in fintech, coupled with great cash cost efficiencies.
• 2024 will be a transformational year for GoTo without the yoke of Tokopedia promotional spending but with significant cash coming in every quarter that can be used to drive growth.

• GoTo Gojek Tokopedia Tbk PT (GOTO IJ) reported 4Q2023 results yesterday which shows that the company’s profitability has significantly improved.
• The improvement in profitability has come at the cost of growth which has continued to decline suggesting profits may not be sustained.
• GoTo announced that it has completed the Tokopedia partnership deal with TikTok and also a plan to buyback shares, subject to regulatory/shareholder approval.

• Cisarua Mountain Dairy (CMRY IJ) held an analyst call after its results, revealing a positive outlook for dairy products and premium consumer foods, with potentially higher margins ahead.
• The company launched several new products in 2023, with more of a focus on affordability through yoghurt sticks. It will launch more affordable Kanzler Singles in 2H2024.
• Cisarua Mountain Dairy will expand distribution through general trade and Miss Cimory MCM, with ongoing sales & marketing spending. Valuations remain attractive relative to growth and returns. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Delta Dunia Makmur
• MGM China Holdings