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Research Team
Katarina SETIAWAN
Head of Research
Equity Daily
ksetiawan@kimeng.co.id
+6221 2557 1125 Mining: Antam (ANTM IJ) reported a 238% y/y increase in 1H10
Ricardo SILAEN, CFA
net profit on strong nickel price. The result is inline with our
rsilaen@kimeng.co.id estimate.
+6221 2557 1126
Mining: Bumi Resources (BUMI IJ) posted 1H10 net profit of
Rahmi MARINA
rmarina@kimeng.co.id
US$134.6m, a 30% decline compared to a restated 1H09 of
+6221 2557 1128 US$192m. Sales came in at US$2,139m, up 25% y/y. But gross
and operating profits were only up by 9% y/y and 5% y/y to
Lucky ARIESANDI, CFA
lariesandi@kimeng.co.id
US$790m and US$$532m, respectively. Production cost grew
+6221 2557 1127 faster (+37% y/y) than sales (+25% y/y).
Adi N. WICAKSONO Mining: Timah (TINS IJ) 1H10 net profit rose 653% y/y to Rp322b
anwicaksono@kimeng.co.id
+6221 2557 1130 on the back of rising ASP. The result falls below our estimate
mainly on higher production cost.
Arwani PRANADJAYA
apranadjaya@kimeng.co.id
Plantation: BW Plantation (BWPT IJ) reported 1H10 net profit of
+6221 2557 1129
Rp86b, down 20% y/y on lower revenue at Rp275b (‐12% y/y).
Gross and operating profits were down by 22% and 28% to
Rp165b and Rp124b.
Mining: Adaro (ADRO IJ) posted 1H10 net profit of Rp1.15t, only
a half of that in 1H09, on lower revenue and higher cost. Sales
came in at Rp11.98t, down 7% y/y, while gross and operating
profits were down by 27% and 28% to Rp3.98t and Rp3.57t
respectively.
INDONESIA
Key Indices
Last Point % chg
IDX Index 3,099.6 ‐5.2 ‐0.2
IDR/USD 9,014.5 2.0 0.0
SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Equity Daily 31 August 2010
Antam (HOLD): 1H10 net profit rose 238% y/y
Antam reported a 238% y/y increase in 1H10 net profit to Rp756b.
Sales declined slightly (‐2% y/y) to Rp4.31t as the company wound down
its gold trading activity.
Analyst comment:
The result is inline with our estimate at 53% of FY estimate, and span over
a period where nickel price overshot to beyond US$25k/ton. Nickel price
has been stabilizing lately at US$20‐21k/ton.
Ferronickel sales volume rose 38% y/y to 9.74k tons as Antam completed
repair work on FeNi III smelter in 3Q09.
We maintain our HOLD recommendation on Antam.
Figure 1: Antam’s 1H10 results
(Rp b) 1H10 1H09 % chg y/y 2Q10 1Q10 % chg q/q
Sales 4,315.3 4,406.0 ‐2% 2,660.2 1,655.1 61%
Gross profit 1,406.4 447.2 214% 932.1 474.3 96%
Op profit 1,088.6 199.0 447% 745.3 343.3 117%
Net profit 756.3 223.8 238% 554.4 201.9 175%
Gross profit margin 33% 10% 35% 29%
Op profit margin 25% 5% 28% 21%
Net profit margin 18% 5% 21% 12%
Source: Company data
Bumi Resources (SELL): Disappointing 1H10 result
Bumi posted 1H10 net profit of US$134.6m, a 30% decline compared to a
restated 1H09 of US$192m. Sales came in at US$2,139m, up 25% y/y. But
gross and operating profits were only up by 9% y/y and 5% y/y to
US$790m and US$$532m, respectively.
Production cost grew faster (+37% y/y) than sales (+25% y/y).
Analyst comment:
Result in 1H09 is restated. We reckon that Bumi has been restating its
financial results in the last few quarters. In the restated 1H09 financial
statement, sales are 11% higher (from US$1535m previously stated), but
net profit are 24% lower (from US$252m previously)
Compared to pre‐restasted 1H09 result, 1H09 net profit would have been
down by 47% (from US$252m).
The numerous revisions on interim and final results reduce the reliability
and indicate a corporate governance issue, in our view.
We reckon 2Q10 net profit is only US$38m, down 60% q/q.
Below operating line, we saw massive increase in interest expenses at
US$257m (+438% y/y). The company also booked derivative lost of
US$60m in 1H10.
Overall, the result is disappointing, much below our expectation. We
maintain SELL recommendation.
INDONESIA EQUITY RESEARCH
Page 2
Equity Daily 31 August 2010
Figure 2: Bumi Resources’ 1H10 results
(US$ m) 1H10 1H09 % chg y/y 2Q10 1Q10 % chg q/q
Revenue 2,139 1,710 25 1,122 1,017 10
COGS (1,348) (984) 37 676 672 1
Gross Profit 790 726 9 446 345 29
Selling expenses (167) (132) 26 (89) (78) 14
G&A expenses (90) (84) 7 (44) (46) (3)
Operating income 532 505 5 313 219 43
Forex gain (loss) 41 14 195 9 32 (73)
Interest expenses (257) (48) 438 (123) (135) (9)
Amortization expenses (60) (25) 140 (23) (19) 25
Others 111 (13) (937) 16 77 (79)
Income from associates 90 17 418 36 54 (32)
Pretax Income 456 450 1 228 228 (0)
Tax (222) (184) 21 (135) (87) 54
Minority (100) (74) 36 (55) (45) 24
Net income 135 192 (30) 38 97 (60)
EPS (US$/1000 shares) 6.94 10.00 (31) 1.95 4.99 (61)
Gross margin (%) 37.0% 42.4% 39.7% 33.9%
Operating margin (%) 24.9% 29.5% 27.9% 21.5%
Net margin (%) 6.3% 11.2% 3.4% 9.5%
Source: Company data
Timah (UNDER REVIEW): 1H10 net profit rose 653% y/y
Timah posted Rp322b net profit in 1H10, a 653% y/y increase.
Sales rose 6% y/y to Rp3.75t due to higher ASP, as the company’s sales
volume actually dropped 18% y/y.
Analyst comment:
The result falls below our estimate mainly on higher than expected
production cost, which rose 31% y/y to US$15.1k/ton.
Production was great with tin‐in‐concentrates production rose 50% y/y
and refined tin production inched up 1% y/y. We are waiting for
explanation from the management as to why the good production level
failed to translate into sales volume despite the world’s shortage of tin.
We are reviewing our recommendation on Timah.
INDONESIA EQUITY RESEARCH
Page 3
Equity Daily 31 August 2010
Figure 3: Timah’s 1H10 results
(Rp b) 1H10 1H09 % chg y/y 2Q10 1Q10 % chg q/q
Sales 3,749.4 3,539.3 6% 1,914.1 1,835.4 4%
Gross profit 689.1 375.0 84% 319.3 369.8 ‐14%
Op profit 414.9 178.6 132% 167.0 248.0 ‐33%
Net profit 322.3 42.8 653% 180.5 141.8 27%
Gross profit margin 18% 11% 17% 20%
Op profit margin 11% 5% 9% 14%
Net profit margin 9% 1% 9% 8%
Source: Company data
BW plantation (UNDER REVIEW): 1H10 result below expectation
The company reported 1H10 net profit of Rp86b, down 20% y/y on lower
revenue at Rp275b (‐12% y/y). Gross and operating profits were down by
22% and 28% to Rp165b and Rp124b.
Analyst comment:
While the sector also experienced production decline for CPO, we see
BW’s 17% y/y decline in CPO output (38.7k tons) is quite steep.
Cost of production grew by 9% y/y despite the lower revenue, mostly due
to doubled fertilization cost (Rp34b).
Gross and operating margins contracted to 59.8% and 44.9% in 1H10
from 67.3% and 55.1% in IH09, despite in increases in ASPs of CPO and
palm kernel. This is because most plantation costs are actually fixed.
Hence, any decrease in production would translate into higher unit cost
and lower margin.
Overall, the result is below our expectation. We are reviewing our
forecast and recommendation.
Figure 4: BW Plantation’s 1H10 results
(Rp b) 1H10 1H09 % chg y/y
Revenue 276 312 (12)
COGS (111) (102) 9
Gross Profit 165 210 (22)
Selling expenses (2) (3) (22)
G&A expenses (39) (35) 10
Operating income 124 172 (28)
Forex gain (loss) 7 15 (51)
Interest expenses (19) (20) (8)
Interest revenue 5 0 1,789
Others (1) (14) (90)
Pretax Income 117 153 (24)
Tax (31) (46) (33)
Net income 86 107 (20)
EPS 21.19 34.12 (38)
Gross margin (%) 59.8% 67.3%
Operating margin (%) 44.9% 55.1%
Net margin (%) 31.0% 34.3%
Source: Company data
INDONESIA EQUITY RESEARCH
Page 4
Equity Daily 31 August 2010
Adaro: 1H10 result below expectation
Adaro posted 1H10 net profit of Rp1.15t, only a half of that in 1H09, on
lower revenue and higher cost. Sales came in at Rp11.98t, down 7% y/y,
while gross and operating profits were down by 27% and 28% to Rp3.98t
and Rp3.57t respectively.
Analyst comment:
Operating figures for 1H10 were good, with both coal production and
sales volume grow by more than 20% y/y to 21.6m tons and 21.7m tons
respectively. Heavy rainfall in 2Q10 slowed down operation with
production at 10.26m tons (‐10% q/q) and sales volume at 11.46m tons (‐
10% q/q).
Gross and operating margins shrunk to 33.3% and 29.8% in 1H10 from
42.2% and 38.2% in 1H09 respectively.
Cost of sales increased by 8% y/y, which we believe related to higher fuel
cost and heavy rainfall in 1H10.
Below operating line the company incurred higher interest expenses of
Rp586b (+61% yy/), but lower tax expenses (‐33% y/y).
Overall, the result is below consensus expectation.
Figure 5: Adaro’s 1H10 results
(Rp b) 1H10 1H09 % chg y/y
Revenue 11,985 12,897 (7)
COGS (8,038) (7,452) 8
Gross Profit 3,987 5,444 (27)
Selling expenses (167) (320) (48)
G&A expenses (210) (193) 9
Operating income 3,570 4,931 (28)
Forex gain (loss) (121) 0 na
Interest expenses (586) (365) 61
Inetest revenue 25 29 (14)
Amortization of goodwill (245) (261) (6)
Pretax Income 2,537 4,358 (42)
Tax (1,379) (2,052) (33)
Minority (5) (48) (90)
Net income 1,153 2,248 (49)
EPS 36.00 70.30 (49)
Gross margin (%) 33.3% 42.2%
Operating margin (%) 29.8% 38.2%
Net margin (%) 9.6% 17.4%
Source: Company data
INDONESIA EQUITY RESEARCH
Page 5
Equity Daily 31 August 2010
Figure 6: Bank Himpunan Saudara’s 1H10 results
(Rp b) 1H10 1H09 % chg y/y
Net Interest Income 119 65 82.2
Operating income 10 24 ‐55.9
Operating expenses 87 76 15.3
Pre‐tax income 40 13 208.2
Net profit 30 9 231.0
Gross loans 2,260 1,540 46.8
Total assets 2,882 2,051 40.5
Total deposits 2,318 1,776 30.5
NIM (%) 8.7% 7.7%
Gross NPL (%) 1.4% 1.6%
LDR (%) 97.5% 86.7%
CAR (%) 16.1% 13.0%
Source: Company data
Chart Pointers
IDX: The index has three negative signals; selling volume, the break of
support trend line, and no confirmation from daily TD sequential.
However, on the other side, CPO stocks strongly indicate positive
direction. We like CPO stocks for portfolio balancing while we
recommend TAKE PROFIT for currency sensitive stocks. Today’s trading
range is between 3050‐3070‐3079 (support) and 3128‐3158‐3162
(resistance).
LSIP: The stock price was closed with strong buying volume yesterday.
We believe share price could reach Rp10200 by 6 September 2010.
TRADING BUY.
BSDE: Good MaCD signal. We set near‐term target price at Rp860.
TRADING BUY.
INDONESIA EQUITY RESEARCH
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Equity Daily 31 August 2010
Commodities 30‐Aug‐10 27‐Aug‐10 Change (US$) Change (%)
Nickel (US$/ton) * 20,997.00 602.00 2.95
Tin (US$/ton) * 21,669.00 291.00 1.36
Gold (US$/t.oz) 1,236.97 1,238.10 (1.13) (0.09)
CPO Malaysia (US$/ton) 866.74 852.93 13.81 1.62
Oil NYMEX (US$/barrel) 74.70 75.17 (0.47) (0.63)
Coal ‐ ARA region (US$/ton) * 91.60 0.52 0.57
Key corporate actions
Cum date Ex‐date Company Action Price (Rp) Note
2‐Sep‐10 3‐Sep‐10 TSPC Final dividend 09 35
6‐Sep‐10 7‐Sep‐10 MAIN Final dividend 09 56
7‐Sep‐10 15‐Sep‐10 BPFI Final dividend 09 1
7‐Sep‐10 15‐Sep‐10 HMSP Final dividend 09+spec 08 615
16‐Sep‐10 17‐Sep‐10 MERK Interim dividend 10 3,570
28‐Sep‐10 29‐Sep‐10 ITMG Interim dividend 10 795
7‐Oct‐10* 8‐Oct‐10* BBNP Rights issue: 6 (n) : 19 (o) 1,000 *Tentative date
INDONESIA EQUITY RESEARCH
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Equity Daily 31 August 2010
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INDONESIA EQUITY RESEARCH
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Equity Daily 31 August 2010
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INDONESIA EQUITY RESEARCH
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