External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Equity Bottom-Up

Earning preview: Expecting higher earnings in 3Q21<div class="content-highlight">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.</div>

Earning preview: Expecting higher earnings in 3Q21Content 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.

Vale Indonesia (INCO IJ) - Earning preview: Expecting higher earnings in 3Q21

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange (IDX). The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The IDX has announced the changes to the LQ45 Index as a part of the August review. <a href="https://www.smartkarma.com/entities/barito-pacific-tbk-pt" target="_blank" data-smartkarma-citation="entities:8851:1" rel="noopener">Barito Pacific (BRPT IJ)</a> and <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a> have been added to the index while <a href="https://www.smartkarma.com/entities/bank-tabungan-pensiunan-nasi" target="_blank" data-smartkarma-citation="entities:27088:1" rel="noopener">Bank BTPN Syariah (BTPS IJ)</a> and <a href="https://www.smartkarma.com/entities/ciputra-development-tbk-pt" target="_blank" data-smartkarma-citation="entities:5513:1" rel="noopener">Ciputra Development (CTRA IJ)</a> have been deleted from the index.We expect the impact of passive funds (and active funds) will be quite high on <a href="https://www.smartkarma.com/entities/barito-pacific-tbk-pt" target="_blank" data-smartkarma-citation="entities:8851:1" rel="noopener">Barito Pacific (BRPT IJ)</a>, <a href="https://www.smartkarma.com/entities/bit-digital-inc" target="_blank" data-smartkarma-citation="entities:31155:1" rel="noopener">Bit Digital (BTBT US)</a> and <a href="https://www.smartkarma.com/entities/ciputra-development-tbk-pt" target="_blank" data-smartkarma-citation="entities:5513:1" rel="noopener">Ciputra Development (CTRA IJ)</a> and significantly lower on <a href="https://www.smartkarma.com/entities/timah-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:11174:1" rel="noopener">Timah Persero (TINS IJ)</a>.The changes are effective after the close of trading on 30 July, so there are only 4 trading days before passive funds have to rebalance their portfolios. Active funds benchmarked to the LQ45 index will also trade over the next few days so as not to deviate too far from their benchmark.

The LQ45 Index is a market cap weighted index of the 45 most liquid stocks listed on the Indonesia Stock Exchange (IDX). The LQ45 Index covers at least 70% of the stock market capitalization and transaction values in the Indonesia Stock Market.The IDX has announced the changes to the LQ45 Index as a part of the August review. Barito Pacific (BRPT IJ) and Timah Persero (TINS IJ) have been added to the index while Bank BTPN Syariah (BTPS IJ) and Ciputra Development (CTRA IJ) have been deleted from the index.We expect the impact of passive funds (and active funds) will be quite high on Barito Pacific (BRPT IJ), Bit Digital (BTBT US) and Ciputra Development (CTRA IJ) and significantly lower on Timah Persero (TINS IJ).The changes are effective after the close of trading on 30 July, so there are only 4 trading days before passive funds have to rebalance their portfolios. Active funds benchmarked to the LQ45 index will also trade over the next few days so as not to deviate too far from their benchmark.

LQ45 Index Rebalance: BRPT, TINS In; BTPS, CTRA Out

Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Alpha Factors

INVESTMENT CONCLUSION:  We recommend Buying <a href="https://www.smartkarma.com/entities/vale-indonesia-tbk" target="_blank" data-smartkarma-citation="entities:19226:1" rel="noopener">Vale Indonesia Tbk (INCO IJ)</a> shares with a price target of Rp.4,500/sh.  INCO is a beneficiary of stronger <a href="https://www.smartkarma.com/entities/nickel" target="_blank" data-smartkarma-citation="entities:26790:1" rel="noopener">Nickel (NICKEL COMDTY)</a> prices and we forecast 4Q19 EBITDA jumping back toward the US$100mn level or US$400mn on an annualized level, which is well ahead of the current consensus forecasts today.

INVESTMENT CONCLUSION:  We recommend Buying Vale Indonesia Tbk (INCO IJ) shares with a price target of Rp.4,500/sh.  INCO is a beneficiary of stronger Nickel (NICKEL COMDTY) prices and we forecast 4Q19 EBITDA jumping back toward the US$100mn level or US$400mn on an annualized level, which is well ahead of the current consensus forecasts today. 

PT Vale Indonesia: Consensus Looks Too Conservative - Trading Buy

Ex - Analyst at PE and Indonesia Brokerage Firm

Surabhi Chopra

<a href="https://www.smartkarma.com/entities/19226" target="_blank" data-smartkarma-citation="entities:19226:1">Vale Indonesia Tbk (INCO IJ)</a> current market price per share is IDR 2,720/share and market capitalization is IDR 24 trillion.  Summary: INCO is the largest lateritic nickel mine in the world. It has good corporate governance and has been increasing production and reducing costs to combat the downturn in nickel prices. We are initiating with a sell rating on INCO mainly because of our bearish view on the nickel prices and the stock is trading at high PE 2018 valuation compared to its peers. We…

Vale Indonesia Tbk (INCO IJ) current market price per share is IDR 2,720/share and market capitalization is IDR 24 trillion.  Summary: INCO is the largest lateritic nickel mine in the world. It has good corporate governance and has been increasing production and reducing costs to combat the downturn in nickel prices. We are initiating with a sell rating on INCO mainly because of our bearish view on the nickel prices and the stock is trading at high PE 2018 valuation compared to its peers. We…

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Failure of a tailings dam and damage to another at the 50%-&nbsp;owned Samarco iron ore mine in Brazil, in joint venture with&nbsp;Vale, is a disaster.The environmental mess and loss of life&nbsp;dents investor confidence at a time when sentiment for BHP&nbsp;Billiton is fragile as a result of falling commodity prices.Managing director Andrew Mackenzie has responded&nbsp;admirably in trying circumstances, promptly on the ground,&nbsp;offering sincere condolences and pledging BHP's full&nbsp;support in the recovery.That said, in no way do we put a&nbsp;positive spin on the event for BHP.Analysts: Mathew Hodge &amp; Mark Taylor

Failure of a tailings dam and damage to another at the 50%-&nbsp;owned Samarco iron ore mine in Brazil, in joint venture with&nbsp;Vale, is a disaster.The environmental mess and loss of life&nbsp;dents investor confidence at a time when sentiment for BHP&nbsp;Billiton is fragile as a result of falling commodity prices.Managing director Andrew Mackenzie has responded&nbsp;admirably in trying circumstances, promptly on the ground,&nbsp;offering sincere condolences and pledging BHP's full&nbsp;support in the recovery.That said, in no way do we put a&nbsp;positive spin on the event for BHP.Analysts: Mathew Hodge &amp; Mark Taylor

BHP Billiton's Exposure to Samarco Tailings Disaster

Indonesia

PT Vale Indonesia Tbk is Indonesia's largest integrated nickel producer, engaged in the exploration, mining, processing, and production of nickel in matte from lateritic ores. The company also operates hydroelectric power generating plants that supply electricity for its smelting and nickel ore processing facilities. It is headquartered in Jakarta, Indonesia, and was founded on July 25, 1968.

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Vale Indonesia (INCO IJ)