Indonesia

• GoTo Gojek Tokopedia (GOTO IJ) booked an encouraging set of 1Q2024 results which provided a first look at the new structure, whereby suddenly e-commerce became cashflow positive for the company. 
• The company booked strong headline growth with core GMV increasing by +32% YoY, despite incentive & product spending decreasing by -31% YoY, whilst adjusted EBITDA losses fell -89% YoY. 
• GoTo will drive growth less through incentives and more through innovative products, increasing the user base, and focusing on retention through its subscription products, with fintech becoming increasingly important. 

• Sido Muncul (SIDO IJ) had a poor Q2-Q3 numbers, and investors sold off. 
• The recent uptick is driven by revenue growth and cost cutting exercises (mainly in wages) that improve margins.  
• Productivity may not stay at the same level thus Q2 24 numbers are key. Take your win first. 

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 Oil And Gas
• Lippo Karawaci
• SJM Holdings
• Softbank Group

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.

• Adaro Energy
• Greentown China
• Vedanta Resources

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 Green Energy
• Japfa Comfeed Indonesia
• Medco Energi
• Pakuwon Jati

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

• Multi Bintang Indonesia (MLBI IJ) showed a weak print, with sales down 10% YoY and profitability flat for Q1 FY24. Consumption was weak locally despite strong Bali tourism. 
• On the positive side, the company improved its net cash position to substantially to 900 bn Rph ( or 6% of Mkt Cap) and expanded margins by 400 bps YoY. 
• Trading at 13x FY23 PE (with a 7% dividend yield assuming a 100% payout), there is great value in this market leader (60% Mkt share) of beer consumption in Indonesia.

• Bukalapak released its 1Q2024 results this week with some palpable relief as it booked its first adjusted EBITDA but underlying revenue growth remains strong, especially for its O2O business. 
• The company saw take rates improve for both its Mitra O2O business and its marketplace businesses, helping to drive revenue growth. Costs were also reduced allowing for positive contribution margins. 
• Bukalapak is expected to see sustainable profitability accompanied by revenue growth, with the marketplace recovering with improving product mix. BUKA’S “orphan” cash pile remains an issue but valuations are attractive.

• Bank Negara stands out versus its peers for its value attributes, its attractive PEG ratio, and its improving pre- and post-provision returns with top NPL coverage relative to its peers
• Bank Mandiri remains a buy for its quality attributes, its premium returns, and its well-controlled CoR; Mandiri has a far better valuations-to-returns mix than mega-cap BCA 
• Bank Rakyat comes off the sell list; it registered improved pre-provision returns in 1Q24, and although cost of risk worsened, post-provision returns were maintained along with its NPL coverage ratio

• • The work-over programme has started with the first two work-overs having added a total of ~40 bbl/d.
• The third work-over was not completed as damaged equipment was encountered downhole.
• • The second tranche of work-overs will start in May.

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
• Melco Resorts and Entertainment (Philippines)
• PT Pertamina (Persero)

• Astra International (ASII IJ) just released 1Q2024 results, which reflected the softer auto and heavy equipment markets, although buoyed by better earnings for its finance arm, 
• The company’s headline net profit was down -14% YoY but stripping out value adjustments was only down -5% YoY, with management optimistic over the longer term. 
• Astra continues to mirror the Indonesian economy, with its latest investment in geothermal but its nickel businesses also growing. Valuations attractive on 6.6x FY2024E PER and a 7.2% dividend yield. 

• Bank Negara Indonesia (BBNI IJ) booked a solid set of 1Q2024 results driven by +9.6% YoY growth in loans, despite being hampered by higher cost of funds amid tighter liquidity.
• Loan growth was driven by corporate lending, with corporate SOE lending showing the strongest growth and consumer loans. Funding was driven by CASA growth which limited the squeeze on NIMs. 
• Bank Negara Indonesia booked strong growth in fee income and a reduction in provisions which helped to offset the margin squeeze. Valuations remain attractive on 1.2x FY2024E PBV.

• BFI Finance Indonesia (BFIN IJ) booked a solid set of 1Q2024 numbers with improved QoQ bookings, although with some concerns over challenging market conditions slowing the recovery.
• The NPF ratio saw an ongoing improvement, although the cost of capital increased due to higher write-offs from last year’s bookings. Revenue declined due to a shift to lower-risk products. 
• The outlook for BFIN in 2H2024 looks more positive, with the company shifting back to higher-return products and with lower expected credit costs. Valuations are appealing on 1.5x PBV.

• Siloam International Hospitals booked a solid set of 1Q2024 results, with sustained QoQ improvements in revenues, EBITDA, and profits, stripping out a one-off write-down for hospitals under development. 
• The company also saw strong improvements in operational metrics including inpatient and outpatient days, with especially strong performance in March due to a dengue epidemic, which also diluted patient intensity. 
• Siloam International Hospitals saw continuing strength in more complex treatments, as it focused on raising clinical acuity in areas such as transplants and cardiology. Valuations remain attractive relative to 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.

• China Hongqiao
• Greentown China
• Medco Energi
• Yankuang Energy Group

• Bank Central Asia (BBCA IJ) surprised with a strong set of 1Q2024 numbers driven by unseasonably strong loan growth coupled with continuing growth in CASA, helping to underpin NIMs. 
• Loan growth was driven by corporate loans with investment loans outpacing working capital loans together with SME loans and consumer loans, especially mortgages, autos, and personal loans. 
• Digital banking initiatives drove customer numbers and transactions, whilst improving operating efficiencies. Credit costs continue to come down with falling loans at risk. Valuations remain high but credentials remain intact.