Indonesia

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

• Kinross Gold Corp (KGC US), Fresnillo PLC (FRES LN), Kingsgate Consolidated (KCN AU), Dakota Gold are adds; Merdeka Copper Gold Tbk PT (MDKA IJ) and PGM Gold Mining are deletes.
• One way turnover is US$390m and there is a big impact on a lot of stocks due to addition, deletion and float changes. Implementation at the close on 17 June.
• Bumi Resources Minerals Tbk (BRMS IJ) was added to the GDXJ in March and rallied over 30% in 4 days since announcement. Buying this time will be even larger.

• Bank Mandiri (BMRI IJ) is executing well on its move to shift its focus toward higher-yielding assets in commercial, Micro, and SME segments and also high-quality corporate loans.
• The company has seen the cost of funds continue to decline as it picks up new savings accounts through its Livin’ app, helping to improve NIMs and returns.
• Bank Mandiri (BMRI IJ)‘s cost of credit continues to fall, with declining provisions also helping to improve profitability, and with ROEs hitting multi-year highs while valuations remain attractive.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Indika Energy
2. Country Garden Holdings Co
3. China SCE
4. Powerlong Real Estate Holdings
5. Seazen (Formerly Future Land)

and more…

• GoTo (GOTO IJ)  announced 1Q2022 and FY2021 results on 30th May. Gross income grew by 43.5% YoY in 2021 with a growth of 53.5% YoY in 1Q2022.
• However, gross margins show no improvement and operating losses have also worsened with the merger of Tokopedia in May 2021.
• GoTo plans to turnaround its profitability through synergies, improved monetisation and cost efficiencies. However, we don’t expect profits in the near future.

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.

• Hopson Development
• Kawasan Industri Jababeka
• KWG Living Group

• Integra Indocabinet’s recent 1Q2022 results confirmed the strong momentum in its wooden furniture and component sales to the US, which have seen even stronger growth than last year.
• Manufactured exports saw growth of +114% YoY in 1Q2022, whilst wooden building components saw growth of +194% YoY, as the company continued to gain market share in the US market.
• Integra Indocabinet trades on 8.3x FY21E PER and 8.1x FY22E PER, with consensus forecast EPS growth of +2.6% and +11.6% for FY2022E and FY2022E looking too low. 

• The bank is a former finance company, still holds much term deposits
• As interest rates rise, loan re-pricing can occur, with lower funding costs
• Time deposits are contracting, while CASA accounts are rising 1Q22 YoY

• The IDX has announced that GoTo (GOTO IJ) will be included in the IDX30, LQ45 and IDX80 indices at a float of 66.4% at the close on 7 June.
• Waskita Karya (Persero) (WSKT IJ) will be deleted from the IDX30 and LQ45 indices, while Buyung Poetra Sembada PT (HOKI IJ) will be deleted from the IDX80 index.
• Passive trackers need to buy around 12.78% of the real float on GoTo (GOTO IJ). Add the impact from open ended funds and that could move up to 20%. 

This month, we provide an update on developments related to the Indonesian bankruptcy regime since November 2017.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• GoTo announced its much-anticipated FY2021 and 1Q2022 results, which did not disappoint, with improvements in a number of different metrics across its main verticals.  
• 1Q2022 saw a QoQ increase for on-demand, e-commerce, and fintech versus a seasonally strong 4Q plus the group improved take rates and contribution margin in 1Q2022 versus 4Q2021.
• GoTo‘s guidance for 2Q2022 is positive and it should be boosted by higher commission rates plus continuing synergies across the group, helping to improve profitability and growth.

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.

• Kawasan Industri Jababeka
• Softbank Group

For our next Corporate Webinar with Siloam International Hospitals (SILO IJ), we are glad to welcome Daniel Phua, CFO, and Varun Khanna, Senior Director of Healthcare Business, Corporate Strategy, and Investments.

In the upcoming webinar, Daniel and Varun will share a short company presentation, after which they will engage in a fireside chat with Smartkarma Analyst Angus Mackintosh. A live Q&A session will follow.

The Corporate Webinar will be hosted on Tuesday, 21 June 2022, 17:00 SGT.

PT Siloam International Hospitals Tbk (ticker: SILO) is recognised as a reputable and leading operator of private hospital network in Indonesia, with 41 hospitals spread across several islands, namely Java, Sumatra, Kalimantan, Sulawesi, Bali, and Nusa Tenggara. Siloam’s medical team of more than 3,000 general practitioners and specialist doctors, and 8,000 nurses and support staff, offers international quality healthcare services to around two million patients annually.

Corporate Webinars by Smartkarma Corporate Solutions feature discussions with IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.

• PT Surya Citra Media 1Q2022 were more about the future than the past given that its investment in new content and sporting rights depressed margins but should help drive growth.
• It has been gaining FTA TV audience share, helping to drive ad revenues. Vidio is seeing strong growth in paying subscribers with 2.5m in 1Q2022 with 4m targeted by December.
• PT Surya Citra Media Tbk (SCMA IJ) looks cheap versus history and should benefit from the economic recovery, with an increasingly diversified exposure across FTA TV and digital through Vidio. 

• Sariguna Primatirta Tbk PT (CLEO IJ) is Indonesia’s only pure water brand (CLEO), using US-nanotechnology and eco-friendly packaging with a market share of around 5%.
• The company has co-branded with both Alfamart and Indomaret and is launching new health-driven products such as alkaline oxygenated water as well as expanding with new factories.
• Sariguna Primatirta Tbk PT (CLEO IJ) is an uncovered yet high-quality and high growth consumer company owned by the Tanoko Family, which also owns PT Avia Avian (AVIA IJ).