Indonesia

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.

• Bright Scholar Education
• China South City
• Medco Energi

• Erajaya‘s 1Q2022 results do not reflect the company’s prospects for FY2022, given the impact of Omicron, the chip shortage, and significant IT upgrades taking place, all of which depressed performance.
• The company is stepping up its outlet expansion this year, with plans to add 400-500 new outlets in an effort to gain market share post-pandemic by expanding its network.
• Erajaya is adding new retail JVs outside its handset and IoT businesses including JD Sports, Wellings Pharmacy, Grand Lucky, and Paris Baguette, jointly managing these JVs.

• The news that PT Surya Citra Media’s digital platform Vidio has raised an additional US$45m from Sinarmas, Grab (GRAB US), and Bali United should be seen as a positive.
• Vidio is Indonesia’s leading OTT platform with 61m subs and 2.5m paying subs forecast to grow to 4m by year-end with Champions League, World Cup, and Original Drama driving demand.
• PT Surya Citra Media looks cheap relative to its holding in Vidio, which is worth 71% of its market cap, and trading at a discount to 5-year average forward PER.

• The review period for the LQ45 Index ends on 30 June. The changes should be announced in the last week of July, becoming effective after the close on 29 July.
• Potential adds are Bank Jago Tbk PT (ARTO IJ), Adaro Minerals (ADMR IJ), Bumi Resources Minerals Tbk (BRMS IJ), Transcoal Pacific Tbk PT (TCPI IJ) and Mitratel (MTEL IJ).
• Potential deletions are Pembangunan Perumahan (Persero) (PTPP IJ), Pabrik Kertas Tjiwi Kimia (TKIM IJ), Media Nusantara Citra (MNCN IJ), Gudang Garam (GGRM IJ) and Chandra Asri Petrochemical (TPIA IJ).

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.

• Adani Transmission
• Bharti Airtel
• Fosun International
• Lenovo

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.

• Medco Energi

• Kinross Gold Corp (KGC US), Fresnillo PLC (FRES LN), Kingsgate Consolidated (KCN AU), Dakota Gold are adds; Merdeka Copper Gold Tbk PT (MDKA IJ) and PGM Gold Mining are deletes.
• One way turnover is US$390m and there is a big impact on a lot of stocks due to addition, deletion and float changes. Implementation at the close on 17 June.
• Bumi Resources Minerals Tbk (BRMS IJ) was added to the GDXJ in March and rallied over 30% in 4 days since announcement. Buying this time will be even larger.

• Bank Mandiri (BMRI IJ) is executing well on its move to shift its focus toward higher-yielding assets in commercial, Micro, and SME segments and also high-quality corporate loans.
• The company has seen the cost of funds continue to decline as it picks up new savings accounts through its Livin’ app, helping to improve NIMs and returns.
• Bank Mandiri (BMRI IJ)‘s cost of credit continues to fall, with declining provisions also helping to improve profitability, and with ROEs hitting multi-year highs while valuations remain attractive.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Indika Energy
2. Country Garden Holdings Co
3. China SCE
4. Powerlong Real Estate Holdings
5. Seazen (Formerly Future Land)

and more…

• GoTo (GOTO IJ)  announced 1Q2022 and FY2021 results on 30th May. Gross income grew by 43.5% YoY in 2021 with a growth of 53.5% YoY in 1Q2022.
• However, gross margins show no improvement and operating losses have also worsened with the merger of Tokopedia in May 2021.
• GoTo plans to turnaround its profitability through synergies, improved monetisation and cost efficiencies. However, we don’t expect profits in the near future.

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.

• Hopson Development
• Kawasan Industri Jababeka
• KWG Living Group

• Integra Indocabinet’s recent 1Q2022 results confirmed the strong momentum in its wooden furniture and component sales to the US, which have seen even stronger growth than last year.
• Manufactured exports saw growth of +114% YoY in 1Q2022, whilst wooden building components saw growth of +194% YoY, as the company continued to gain market share in the US market.
• Integra Indocabinet trades on 8.3x FY21E PER and 8.1x FY22E PER, with consensus forecast EPS growth of +2.6% and +11.6% for FY2022E and FY2022E looking too low. 

• The bank is a former finance company, still holds much term deposits
• As interest rates rise, loan re-pricing can occur, with lower funding costs
• Time deposits are contracting, while CASA accounts are rising 1Q22 YoY

• The IDX has announced that GoTo (GOTO IJ) will be included in the IDX30, LQ45 and IDX80 indices at a float of 66.4% at the close on 7 June.
• Waskita Karya (Persero) (WSKT IJ) will be deleted from the IDX30 and LQ45 indices, while Buyung Poetra Sembada PT (HOKI IJ) will be deleted from the IDX80 index.
• Passive trackers need to buy around 12.78% of the real float on GoTo (GOTO IJ). Add the impact from open ended funds and that could move up to 20%.