Daily Brief Indonesia: Cisarua Mountain Dairy, Cinema XXI, Lippo Karawaci, Sino-Ocean Group and more

• Cisarua Mountain Dairy (CMRY IJ) remains one of the most interesting and dynamic staple players in Indonesia, with a leading position in yoghurt and growing strength in consumer foods. 
• CMRY continues to achieve strong top-line growth of +21% in 1H2023, with consumer foods driving growth and 50% of sales but we expect dairy to see better performance in 2H2023. 
• Cisarua Mountain Dairy (CMRY IJ) continues to invest in marketing through digital channels, including TikTok. Valuations remain attractive relative to its growth prospects, with more than 20% 3-year EPS CAGR.

• Cinema XXI raised around US$150m in its Indonesia IPO, after pricing at the bottom-end.
• Cinema XXI is a premium theatrical exhibition, F&B and experience company. It is the largest cinema chain operator in Indonesia.
• We have looked at the company’s past performance and undertaken a peer comparison and valuation in our earlier notes. In this note, we talk about the trading dynamics.

Lippo Karawaci’s (LPKR) H1/23 results were much better than expected, and showed that the company was on track to achieve its turnaround goals. All business segments performed well, with healthcare again the largest contributor to revenue and earnings. Still, we note positively that the real estate segment’s performance was in line with guidance amid a challenging operating environment, with high and rising interest rates. Conversely, the financial risk profile remains weak, with elevated leverage ratios and thin fixed charge cover. Liquidity is barely adequate.

The healthcare segment continues to be LPKR’s key pillar, accounting for two-thirds of revenue and boasting strong (and improved) EBITDA. Moreover, we note that the segment should be relatively immune to the volatility in the economy.

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.

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