Indonesia

• Indo Tambangraya Megah (ITMG IJ) reported an inline Q1 FY24, with stabilizing price. Net cash at 875 mn USD is 50% of mkt cap. 
• If coal prices remain stable at 135 USD/ton, the company will be able to churn out 400 mn USD of profits (~24 mnt sales).  
• With a minimum 65% dividend payout ratio, we derive a dividend yield of 15%. This number could be an upside risk as payout ratios have also been 100%.

• A follow-up call with Alfamart management confirmed the positive growth outlook for the coming year despite a slower store build-out and a sanguine view of the competitive environment. 
• Alfamart will slow its store build-out for Lawson as it optimises its existing stores but will still open 250 new Lawson outlets out of a total of 1,500 new outlets.
• The company will expand more aggressively in the outer islands and build five new DCs to support expansion, with Alfamidi seeing a pick-up in new store openings.  Valuations are reasonable.

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.

• Indika Energy

• Sumber Alfaria Trijaya (Alfamart) booked a solid set of 1Q2024 results, a testament to its resilience during an election period, with the seasonal impact of Lebaran. 
• Minimarkets continue to be the winning format in Indonesia and Alfamart continued to gain share during 1Q2024, neck and neck with Salim-backed Indomaret if you include Alfamidi, Lawson, and Dan+Dan. 
• Alfamart will slow store openings to 1,300 stores this year after adding more than 1,800 outlets in 2023, with growth prospects remaining positive and profitability intact with a 25% ROE. 

• Ace Hardware Indonesia (ACES IJ) continues to impress both in terms of SSSG and profitability, with numerous initiatives to drive future growth including more regular promotional campaigns and upgraded formats.
• SSSG for 5M2024 is well ahead of full-year guidance with strong growth momentum driven by ongoing campaigns, brighter new concept formats, and successful omnichannel initiatives providing additional growth impetus. 
• Ace Hardware Indonesia remains a top pick amongst Indonesian retailers, with valuations well below historical levels, despite the resurgence of growth and numerous initiatives in place both online and offline. 

• Cisarua Mountain Dairy booked a strong set of 1Q2024 results, with sequential quarterly growth in revenues and more so profits as margins recovered driven by both dairy and consumer foods. 
• The company ramped up its advertising, promotion, and marketing spending as it launched new products in the more affordable segments including new flavours for stick yoghurts and affordable consumer foods.
• Cimory remains optimistic for 2024 for a more pronounced recovery in dairy as it pushes out products into general trade and takes more shelf space in modern trade driving growth.

• Barito Renewables Energy (BREN IJ) raised around US$200m in its Indonesian IPO, after pricing at the top end at IDR780/share. Its eight-month lockup will expire on 29th May 2024.
• Barito Renewables (BR) is Indonesia’s largest geothermal power producer, and the third-largest globally by installed capacity, as per the firm.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Indonesia’s integrated farming productivity platform Elevarm has secured US$2.6 million in a seed funding round led by Singapore’s Insignia Ventures Partners.
• 500 Global and eFishery founder and CEO Gibran Huzaifa also participated.
• The strategic raise, completed in two phases, will be used to scale Elevarm’s seedlings and organic fertiliser production capacity threefold to meet growing demand.

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.

• GMR Hyderabad International Airport
• Lippo Karawaci

• Jejakin, an Indonesian-based carbon management platform, has secured US$2.7 million in a funding round from Bhinneka Power, Indogen Capital, SMDV, and East Ventures.
• The capital will be mainly invested in R&D, technological improvement, and market growth.
• Jejakin was founded in 2018 by Arfan Arlanda, Sudono Salim (CGO), Andreas Djingga (COO), and Haris Iskandar (Chief of Sustainability and Climate Change) with a mission to make a positive impact on the environment.

• Kalbe Farma had a tough year in 2023, with high raw material prices and product mix impacting margins but these headwinds have abated in 1Q2024 with promising growth ahead. 
• Distribution & Logistics and the pharmaceutical segment led growth in 1Q2024, with growth in the latter driven by more specialty drugs and unbranded generics.
• Consumer health and nutritionals give Kalbe a consumer edge, with price rises in 1Q2024 and new products helping to drive profitability. Valuations look reasonable versus history with lustre around profits. 

• Criterium has signed a binding sale agreement for its interest in the Bulu PSC for US$7.75 mm in cash.
• The price is in line with previous indications.
• This is a very important announcement as it provides more clarity on the divestment, the proceeds of which will boost the company’s balance sheet and allow it to accelerate its investment program and grow production faster.

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

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.

• Indofood CBP Sukses
• Pakuwon Jati
• Rakuten