Indonesia

• Multi Bintang Indonesia (MLBI IJ) reported Q2 2024 revenues/profits of -4.4%/-5.4% YoY. Q2 FY24 was a significant improvement over Q1 FY24, when revenues were down 10.7% YoY.
• The company is controlling costs by keeping SG&A down by 100 bps to maintain EBITDA margins over 50%. Net cash is now at 8% of the market capitalization.
• We believe that the company will be able to pay 500/Rph of dividends in FY24, implying an 8.3% dividend yield. Trading at 12x PE, we find this idea compelling.

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 Ports & Special Economic Zone
• Indika Energy
• New World Development
• Tata Steel Thailand

• Bank Central Asia (BBCA IJ) booked another set of impressive results in 2Q2024, with continuing momentum behind loan growth driven by corporate and consumer loans, with credit quality under control.
• The bank continued to grow its deposits with CASA growth outpacing overall deposits, which helped underpin an increase in net interest margin to 5.8%, with credit costs at 0.2%
• BCA remains a top pick amongst Indonesian banks, with a long-term track record of producing sector returns, with a strong risk management but dynamic management culture. 

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.

• Gajah Tunggal
• Japfa Comfeed Indonesia
• Nickel Industries

• PT Nippon Indosari Corpindo (ROTI IJ) booked a strong set of numbers for 1H2024 as it benefitted from a pick up outside Java plus a good showing from modern trade. 
• ROTI launched several new products in IH2024 both at the premium as well as at the more affordable level. It is also targeting a younger demographic with revamped packaging. 
• Management points towards a more positive 2H2024 with stronger growth outside Java and a lower return rate as new products gain traction with lower costs. Valuations are attractive versus history. 

• Matahari Department Store (LPPF IJ) reported a slightly weaker 1H2024 due to a slower performance over Lebaran and afterwards but remains confident in its ongoing initiatives to drive future growth. 
• The company will not open any new stores in the 2H2024 as it focuses on reservations and driving its private labels, including Suko and Nevada, and consignment vendors. 
• Matahari continues to drive its omnichannel sales and build on its membership penetration to better target sales. Valuations remain attractive on 4.2x FY2025E PER with a 13% dividend yield.

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.

• Pakuwon Jati
• Pertamina Geothermal Energy PT

• Waaay back in June 2023, MUFG (8306 JP) and 92.7%-held Adira Dinamika (ADMF IJ) entered into SPAs with key shareholders to acquire an 80.6% stake in Mandala Multifinance (MFIN IJ).
• MFIN’s shareholders overwhelmingly approved the change of control at the 13th Feb EGM. OJK signing off was the next hurdle.
• The Tender Offer is now open, at the (expected) price of  IDR 3,297/share. The close of the Offer is the 21st August, with payment on the 28th August. 

• There is 1 constituent change for the LQ45 Index and 2 constituent changes for the IDX80 Index at the rebalance to be implemented at the close on 31 July.
• The largest passive inflows are expected in Amman Mineral Internasional (AMMN), Bank Rakyat Indonesia (BBRI), Bank Central Asia (BBCA), Bank Mandiri Persero (BMRI) and Jasa Marga (Persero) (JSMR). 
• The adds have moved higher over the recent past and are near their highs while the deletes have dropped over the last few years and are trading near their lows.

• Arwana Citramulia (ARNA IJ) is Indonesia’s leading ceramic tile producer catering to the mass market but expanding into the higher-end porcelain tile space competing with Chinese imports at lower costs.
• The recent move by the government to extend the gas subsidy for the industry bodes well for Arwana given the strides it has already made in reducing gas consumption.
• Arwana continues to expand its capacity, especially in higher-margin porcelain tiles, which will help to drive future growth and profitability. Valuations are attractive as capacity-driven growth kicks in.

• Ciputra Development (CTRA IJ) continued to book strong marketing sales in 1H2024 and looks well on track to meet or beat its FY2024E guidance with a strong pipeline of projects.
• CTRA has the most geographically diversified portfolios in the sector and operates an asset-light joint operating scheme strategy allowing for faster expansion and a good portion of recurrent rental income. 
• The VAT exemption program looks set to continue to drive residential demand in 2H2024 with CTRA riding the affordability wave having also repositioned its target market. 

• DCI Indonesia (DCII IJ) is Indonesia’s leading operator of Tier 4 data centres, which require the highest operational standards, with its main business in co-location services.
• The company has a long track record of growth in both sales and profits, making it more than a concept, with a well-thought-out expansion at its three existing data centres.
• DCI Indonesia is hard to justify on current valuations but has a strong track record on execution with a high pedigree management team and customer base, with backing from Salim.

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.

• Lippo Karawaci

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 Vanke
• PT Pertamina (Persero)
• Sunny Optical Technology Group