Mirae Asset Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

<p>Still in the process of recovery</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

<p>9M21 review: A decent performance amidst challenging conditions</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

Insights across South East Asia

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<p><span data-preserver-spaces="true">Given we are now coming out of Indonesia's latest wave of COVID-19 and mobility and economic activity is resuming , we see <a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> as an interesting proxy for the recovery, given its exposure to West Java, infrastructure spending, and the recovering residential property market </span></p>
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<p><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" rel="noopener"><span data-preserver-spaces="true">Indocement Tunggal Prakarsa (INTP IJ)</span></a><span data-preserver-spaces="true"> released a solid set of 1H2021 results, with an increase in revenue of +8.0% YoY on the back of an increase in cement volume.  </span><span data-preserver-spaces="true">EBITDA margins improved from 15.5% to 19.2% due to savings in operating expenses and gains in other operating income, leading to an EBITDA increase of +33.6% YoY to IDR1,280.6bn. <a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" rel="noopener"></a></span><span data-preserver-spaces="true"> </span></p>
<section class="figure">One major cost pressure comes from rising coal prices, which have increased significantly over the past year and the company has been continually both increasing its usage of low calorific coal and alternative fuels over the past 5-years to offset this.</section>
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<p><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> has a strong focus on improving its emissions, with assistance from the Heidelberg Cement Technology Centre, with a road map in place for energy efficiency and CO2 reductions.</p>
<p>The fact that around 78% of cement sales at <a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> is in bags makes branding all the more important and as a result the company is quite focused on promoting the brand through TV and social media channels.</p>
<section class="figure">The company continues with its digitalisation and has developed a fully digitalised ordering system with real time data which helps the company's sales to achieve better results both on ordering as well as on pricing.</section>
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<p><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> estimates that national cement domestic growth will increase by +5% for FY2021 with the resumption of more infrastructure projects and private projects in 2H2021 plus more activity in residential property.</p>
<p>The company's expansion will be focused on expanding its distribution channels through possible new terminals and barge or vessel ownership, as well as potentially exploring M&amp;A opportunities. </p>
<p><span data-preserver-spaces="true"><a href="https://www.smartkarma.com/entities/indocement-tunggal-prakarsa" target="_blank" data-smartkarma-citation="entities:4040:1" rel="noopener">Indocement Tunggal Prakarsa (INTP IJ)</a> trades on 11.1x FY21E EV/EBITDA and 9.9x FY22E EV/EBITDA versus its 5-year average forward EV/EBITDA of 15x, making the company look attractive from a valuation perspective. </span></p>

<p>Expecting more volume recovery ahead</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

<p>Getting impacted by tighter social restrictions, but not severely hurt</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Indonesia

PT Indocement Tunggal Prakarsa Tbk manufactures cement and building materials. Through its subsidiaries, the Company also manufactures and processes ready-mix cement as well as owns and manages properties and hotels.

Indocement Tunggal Prakarsa - INTP IJ

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