Professional Documents
Culture Documents
ed-TH / sa- MA
Indocement
Semen Indonesia
20,000
10,250
5,545
4,579
14,500
8,200
Rating
m tonnes
6% CAGR
70
60
8% CAGR
50
5% CAGR
40
30
20
10
2017F
2015
2016F
2014
2013
Rp
2012
Price
2011
STOCKS
2010
2009
2008
2007
2006
Analyst
Edward Ariadi Tanuwijaya +6221 3003 4932
edward.tanuwijaya@id.dbsvickers.com
2005
2004
JCI : 4,779.99
2003
2 Mar 2016
2002
Industry Focus
Indonesia Cement Sector
Rpbn
plateauing
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
2009 2010 2011 2012 2013 2014 2015 2016F2017F
16,000
15%
10%
5%
12,000
0%
10,000
4Q15
3Q15
2Q15
1Q15
4Q14
3Q14
2Q14
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
4Q11
3Q11
2Q11
1Q11
-5%
90%
19%
20%
21%
22%
24%
27%
29%
79%
78%
76%
73%
71%
2017F
11,000
2016F
13,000
2015
14,000
2014
15,000
80%
70%
60%
50%
40%
81%
80%
30%
20%
10%
0%
2013
17,000
2012
2011
Bag
Bulk
Rp tr
% of GDP (RHS)
5.5%
600
5.0%
m tonnes
Bag
Bulk
6% CAGR
(overall)
70
500
4.5%
400
50
300
4.0%
200
40
10.8
12.4
13.1
14.3
17.2
19.7
17.2% CAGR
(for bulk)
8.9
6.6
30
3.5%
100
0
3.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F
Page 2
60
20
34.2
39.1
44.1
45.6
46.8
46.1
46.5
48.2
2.2% CAGR
(for bag)
10
0
2010
2011
2012
2013
2014
2015
2016F
2017F
Industry Focus
Indonesia Cement Sector
Sumatra
Kalimantan
Sulawesi
Others
100%
90%
6.0%
5.2%
6.1%
5.8%
6.8%
7.9%
6.8%
7.3%
7.5%
7.4%
7.6%
7.9%
6.4%
6.4%
6.4%
7.0%
7.4%
7.6%
7.6%
6.7%
23.6%
23.4%
23.2%
24.3%
23.0%
21.8%
21.0%
20.9%
21.6%
57.7%
55.7%
55.1%
53.8%
55.3%
55.3%
56.4%
56.3%
55.7%
80%
70%
22.0%
60%
50%
40%
30%
60.3%
20%
10%
80
0%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
"Big 3"
Other local
50
Foreign
40
30
20
+68%
10
2.6x
2015
2017F
% of total capacities
100%
90%
80%
30%
6%
10%
11%
12%
12%
13%
77%
74%
70%
60%
50%
40%
84%
20%
-10.6%
-5.0%
0.0%
2015
2016F
2017F
4.0%
5.0%
2015
"Big 3"
4.5%
Sumatra
9.0%
10.0%
9.0%
9.0%
5.7%
Sulawesi
2016F
Other local
2017F
Foreign
5.1%
Others
10%
0%
-0.2%
Java
-15.0%
+9%
60
Kalimantan
m tonnes
70
10.0%
10.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Page 3
Industry Focus
Indonesia Cement Sector
45%
105%
100%
40%
95%
90%
35%
85%
80%
30%
75%
70%
65%
25%
Electricity
Direct labor
100%
90%
80%
38.1%
44.3%
60%
7.4%
7.7%
50%
40%
23.4%
30%
20%
10%
16.4%
15.3%
13.5%
15.7%
18.0%
SMGR
INTP
0%
Coal (LHS)
ICP (RHS)
USD/IDR (RHS)
140
120
130
115
120
110
110
100
105
90
100
80
70
95
60
90
Jan-16
Feb-16
Dec-15
Nov-15
Oct-15
Sep-15
Jul-15
Aug-15
Jun-15
May-15
Apr-15
Mar-15
Jan-15
Feb-15
50
Page 4
2017F
70%
2016F
2014
2015F
2013
2012
2011
2010
2009
2008
2007
2006
2005
20%
2004
60%
Others
Industry Focus
Indonesia Cement Sector
Domestic volume
('000 tonnes)
Now
Prev
Chg (%)
Revenue
in Rpbn
GP margin
EBITDA margin
Operational profit
in Rpbn
Net profit
in Rpbn
TP
in Rp/sh
Now
Prev
INTP
FY16F
17,275
17,614
FY17F
18,052
18,732
0.3%
-1.9%
-3.6%
18,157
18,573
19,364
20,286
21,026
22,375
Chg (%)
-2.2%
-4.5%
-6.0%
Now
Prev
Now
Prev
Now
Prev
44.0%
44.6%
31.9%
32.0%
4,906
5,030
43.7%
44.2%
31.5%
31.1%
5,142
5,310
43.1%
43.7%
30.8%
30.1%
5,450
5,636
Chg (%)
-2.5%
-3.2%
-3.3%
Now
Prev
Chg (%)
Now
Prev
4,385
4,481
4,455
4,590
4,705
4,796
-2.9%
-1.9%
Chg (%)
Recommendation
FY15F
16,784
16,742
Now
Prev
-2.1%
14,500
14,600
-1%
FULLY VALUED
FULLY VALUED
FY15A
25,969
SMGR
FY16F
27,274
26,464
FY17F
29,034
28,330
3.1%
2.5%
26,948
29,066
27,877
31,761
30,603
4.3%
3.8%
39.5%
38.8%
39.0%
25.8%
25.5%
6,032
5,806
37.9%
38.5%
24.6%
25.0%
6,223
6,232
27.6%
5,899
4,521
3.9%
-0.1%
4,621
4,530
4,770
4,880
2.0%
-2.3%
8,200
7,800
5%
FULLY VALUED
FULLY VALUED
Page 5
Industry Focus
Indonesia Cement Sector
INTP PE Band
39.0
18.0
34.0
16.0
29.0
+2SD, 27.4
24.0
+1SD, 22.2
19.0
Ave, 17.0
14.0
-1SD, 11.8
9.0
14.0
+2SD, 14.2
12.0
+1SD, 12.1
10.0
Ave, 10.0
8.0
-1SD, 7.9
6.0
-2SD, 5.8
-2SD, 6.5
4.0
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
4.0
SMGR PE Band
25.0
14.0
20.0
+2SD, 19.8
+1SD, 16.6
15.0
Ave, 13.4
-1SD, 10.2
10.0
-2SD, 7.0
5.0
+2SD, 13.6
12.0
+1SD, 11.0
10.0
8.0
Ave, 8.5
6.0
-1SD, 6.0
4.0
-2SD, 3.5
2.0
-
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jan-05
Jul-05
Jan-06
Jul-06
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
(x)
85
49
20.0
+2 stdev
+1 stdev
16.0
Average
14.0
12.0
-1 stdev
70
43
41
65
39
60
37
55
35
50
2010
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Page 6
75
45
18.0
10.0
Jan-11
80
47
2011
2012
2013
2014
2015
Industry Focus
Indonesia Cement Sector
APPENDIX
Indonesia cement producers: Demand, supply and utilisation rate dynamics
100,000
100%
'000 tonnes
Demand (000 tons) - LHS
Design capacity (000 tons) - LHS
Utilization rate - RHS
96%
90%
80%
80,000
67% 70%
67%
60%
60,000
50%
40%
40,000
30%
20%
20,000
10%
0%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Source: Cement producers, Indonesia Cement Association (ASI), DBS Vickers, DBS Vickers, AllianceDBS Research
Note: Utilisation rate is based on design capacities (without considering cement plant maintenance period).
Ticker
Price
Code
(lcl currency)
Market Cap
(USD m)
SMGR IJ
10,250
4,548.0
13.2
12.7
INTP IJ
20,025
5,514.4
16.5
15.7
SMCB IJ
935
536.0
19.9
15.5
15.3
11,191.7
8.7
914 HK
15
PE (x)
FY16
EV/EBITDA (x)
FY17
FY16
ROE
FY17
FY16
FY17
FY15
8.3
7.8
25.8%
24.6%
17.9%
10.8
10.2
31.5%
30.8%
17.9%
8.0
7.4
15.6%
15.5%
1.3%
14.4
9.6
9.0
28.2%
27.4%
17.1%
7.4
5.5
4.9
26.4%
27.6%
11.5%
743 HK
316.4
nm
nm
1.3
1.4
19.4%
14.7%
nm
3323 HK
2,389.1
8.9
8.8
11.9
11.1
18.9%
19.3%
3.5%
691 HK
2,734.1
nm
nm
21.4
16.0
12.3%
14.9%
nm
2233 HK
1,136.6
20.5
11.8
7.5
5.9
30.0%
35.2%
1.3%
CR Cement *
1313 HK
1,621.9
SCC TB
442
14,884.2
6.6
6.0
6.0
5.7
17.6%
17.5%
6.3%
7.9
6.6
8.6
7.3
22.9%
24.2%
7.7%
11.7
11.2
9.6
9.1
16.4%
16.4%
20.4%
11.7
11.2
9.6
9.1
16.4%
16.4%
20.4%
Page 7
Industry Focus
Indonesia Cement Sector
Location
2012
2013
2014
2015F
2016F
2017F
East Java
11,600
14,000
14,400
14,400
14,400
14,400
3,000
3,000
West Sumatra
6,330
6,400
7,300
7,300
10,300
10,300
South Sulawesi
4,620
7,300
7,800
8,300
8,300
8,300
22,550
27,700
29,500
30,000
36,000
36,000
West Java
16,000
16,000
17,900
22,300
22,300
22,300
South Kalimantan
2,600
2,600
2,600
2,600
2,600
2,600
18,600
18,600
20,500
24,900
24,900
24,900
West Java
5,600
5,600
5,600
5,600
5,600
5,600
Central Java
3,500
3,500
3,500
3,500
3,500
3,500
1,700
3,400
3,400
3,400
9,100
9,100
10,800
12,500
12,500
12,500
South Sulawesi
2,300
2,300
4,000
4,000
4,000
4,000
Riau
Central Java
Semen Indonesia
(SMGR IJ)
Holcim Indonesia
(SMCB IJ)
Bosowa
Central Java
East Java
1,200
1,200
1,200
1,200
1,200
1,200
East Java
1,100
1,100
Papua
750
750
3,500
3,500
5,200
5,200
7,050
7,050
South Sumatra
1,250
2,000
2,000
2,000
2,000
3,850
Andalas (Lafarge)
Aceh
1,600
1,600
1,600
1,600
1,600
1,600
Kupang
NTT
550
550
550
550
550
550
South Kalimantan
1,500
1,500
1,500
1,500
West Java
2,000
2,000
Others
1,500
1,500
3,500
3,500
Anhui Conch
Siam Cement
West Java
1,800
1,800
Banten
750
1,750
4,250
5,750
Panasia
Central Java
1,500
1,500
Puger
East Java
300
300
600
Jui Shin
West Java
Total
1,500
1,500
1,500
57,150
63,050
72,400
81,800
97,450
101,100
Source: Cement producers, Indonesia Cement Association (ASI), DBS Vickers, AllianceDBS Research
Page 8
Industry Focus
Indonesia Cement Sector
Industry Focus
Indonesia Cement Sector
Source: Cement producers, Indonesia Cement Association (ASI), DBS Vickers, AllianceDBS Research
Note:
1. Utilisation rate is based on design capacities (without considering cement plant maintenance period).
2. Red circle: intense competition (oversupply), Orange: moderate competition (adequate supply), Green: light competition (incumbents have the upper hand).
Page 9
Industry Focus
Focus
Industry
Indonesia
Indonesia Cement
Cement Sector
Sector
Page 10
Industry Focus
Indonesia Cement Sector
Company Guides
Page 11
Indocement Tunggal P.
Version 2
2 Mar 2016
FULLY VALUED
Regaining composure
Price Relative
Rp
Relative Index
219
28,580.0
199
26,580.0
179
24,580.0
22,580.0
159
20,580.0
139
18,580.0
119
99
16,580.0
14,580.0
Mar-12
Mar-13
Mar-14
Mar-15
79
Mar-16
2014A
19,996
6,732
6,790
5,271
5,271
5.2
1,432
1,432
5
1,432
1,350
6,733
14.0
14.0
13.8
9.3
6.7
3.0
CASH
22.1
2015F
18,157
5,795
5,695
4,385
4,385
(16.8)
1,191
1,191
(17)
1,191
834
6,574
16.8
16.8
13.4
11.3
4.2
3.0
CASH
17.9
2016F
19,364
6,091
5,786
4,455
4,455
1.6
1,210
1,210
2
1,210
847
6,951
16.5
16.5
13.9
10.8
4.2
2.9
CASH
17.9
2017F
21,026
6,480
6,110
4,705
4,705
5.6
1,278
1,278
6
1,278
895
7,382
15.6
15.6
13.2
10.2
4.5
2.7
CASH
17.8
(2)
1,248
B: 13
(3)
1,305
S: 7
(2)
1,431
H: 13
ASIAN INSIGHTS
ed: TH / sa: MA
3,681
73,625 / 5,545
64.1
13.0
22.9
3.9
VICKERS SECURITIES
Company Guide
Indocement Tunggal P.
Domestic Sales Vol ('000 tones)
17,642
18,189
2013A
2014A
16,784
17,275
2015F
2016F
18,052
16,100
Earnings Drivers:
Domestic cement volume driving top line growth. We forecast
industry demand to grow modestly (in line with Indonesias real
GDP growth) for the next three years as the country is entering
a normal growth state. As the 2nd largest cement producer in
the country, INTP should experience similar growth. In addition,
we expect INTP to lose market share to new foreign players. We
forecast INTPs sales volume to grow by a 5.7% CAGR over
2015-2017F, a recovery after a weak 2015.
13,800
11,500
9,200
6,900
4,600
2,300
0
2017F
997,104
982,148
2014A
2015F
1,011,612 1,041,960
850,400
637,800
425,200
212,600
0
2013A
2016F
2017F
36.3
33.7
31.9
31.5
30.8
2015F
2016F
2017F
29.6
22.2
14.8
7.4
0.0
2013A
2014A
Revenue trend
Rp bn
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
20,000
15,000
10,000
5,000
0
2013A
2014A
Total Revenue
2015F
2016F
2017F
2007
2008
2009
2010
2011
2012
2013
2014
ASIAN INSIGHTS
VICKERS SECURITIES
Page 13
Company Guide
Indocement Tunggal P.
Balance Sheet:
Strong balance sheet for future expansion. INTPs balance sheet
has been impeccable with near-zero interest-bearing debt since
2008. Strong operational cash flow generation and an
abundant cash position will allow INTP to self-finance its future
capex.
0.8
0.8
0.12
0.7
0.10
0.7
0.08
0.7
0.7
0.06
0.7
0.04
0.6
0.02
0.6
0.6
0.00
2013A
2014A
2015F
2016F
2017F
Capital Expenditure
Rp
4,000.0
3,500.0
3,000.0
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0.0
2013A
Key Risks:
Further price control by government. The new government
surprised the market in early 2015 by instructing state-owned
cement producers to cut cement price by 4-5% per bag. Given
the competitive market, other producers had to follow suit or
risked losing their market share. Further price regulation by the
government will negatively affect cement producers
profitability.
Much heralded infrastructure projects' slower-than-expected
rollouts. Despite the gallant effort from the government to
speed up the process, infrastructure development realisation
has been slower than the street's lofty expectations. Slower
execution will directly affect cement demand growth and
subsequently negatively affect INTPs utilisation and
profitability.
2014A
2015F
2016F
ROE (%)
20.0%
15.0%
10.0%
5.0%
0.0%
2013A
2014A
2015F
2016F
Company Background
Indocement (INTP) is the most profitable cement producer
(highest margins) in the sector. It sells cement under the Tiga
Roda brand, arguably the most popular brand in Indonesia.
Its sales volume is concentrated in Java (over 72%). The
company registers higher margins because of its centralised
production facilities and premium pricing, and a profitable
Ready Mix Cement (RMC) business.
2017F
+2sd:20.6x
19.0
2017F
+1sd:18.6x
17.0
Avg:16.5x
15.0
1sd:14.4x
13.0
2sd:12.4x
11.0
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
PB Band (x)
(x)
5.2
4.7
+2sd:4.53x
4.2
+1sd:4.07x
3.7
Avg:3.61x
3.2
1sd:3.15x
2.7
2sd:2.69x
2.2
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
ASIAN INSIGHTS
Page 14
VICKERS SECURITIES
Company Guide
Indocement Tunggal P.
Key Assumptions
FY Dec
Domestic Sales Vol ('000 tones)
Domestic ASP/tonne (in Rp)
EBITDA margin (%)
Segmental Breakdown
FY Dec
Revenues (Rpbn)
Cement
Ready Mix Concrete
Aggregates
Other Businesses
Total
Operating profit (Rpbn)
Cement
Ready Mix Concrete
Aggregates
Other Businesses
Total
Operating profit Margins
Cement
Ready Mix Concrete
Aggregates
Other Businesses
Total
Income Statement (Rpbn)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (Pre-ex) (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
2013A
2014A
17,642
958,265
36.0
18,189
997,104
34.0
2015F
2016F
2017F
16,784
17,275
18,052
982,148 1,011,612 1,041,960
32.0
31.0
31.0
2013A
2014A
2015F
2016F
2017F
17,046
2,739
116
(1,209)
18,293
2,819
135
(1,251)
16,701
2,255
156
(955)
17,697
2,557
179
(1,069)
19,036
3,038
206
(1,253)
18,691
19,996
18,157
19,364
21,026
6,139
(86.0)
11.0
0.0
5,930
43.0
2.00
0.0
4,837
45.0
23.0
0.0
4,987
128
27.0
0.0
5,267
152
31.0
0.0
6,064
5,975
4,906
5,142
5,450
36.0
(3.1)
9.2
0.0
32.4
1.5
1.6
0.0
29.0
2.0
15.0
0.0
28.2
5.0
15.0
0.0
27.7
5.0
15.0
0.0
32.4
29.9
27.0
26.6
25.9
2013A
2014A
2015F
2016F
2017F
18,691
(10,037)
8,655
(2,680)
5,975
89.0
18.0
513
0.0
6,595
(1,583)
(2.0)
0.0
5,010
5,010
6,785
19,996
(10,910)
9,087
(3,233)
5,854
121
24.0
790
0.0
6,790
(1,516)
(3.0)
0.0
5,271
5,271
6,732
18,157
(10,160)
7,997
(3,092)
4,906
100
25.0
664
0.0
5,695
(1,310)
0.0
0.0
4,385
4,385
5,795
19,364
(10,897)
8,467
(3,326)
5,142
130
26.0
488
0.0
5,786
(1,331)
0.0
0.0
4,455
4,455
6,091
21,026
(11,954)
9,073
(3,623)
5,450
162
28.0
471
0.0
6,110
(1,405)
0.0
0.0
4,705
4,705
6,480
8.1
2.5
2.2
5.2
7.0
(0.8)
(2.0)
5.2
(9.2)
(13.9)
(16.2)
(16.8)
6.6
5.1
4.8
1.6
8.6
6.4
6.0
5.6
46.3
32.0
26.8
23.7
20.3
20.5
66.1
NM
45.4
29.3
26.4
22.1
19.0
18.4
94.3
NM
44.0
27.0
24.2
17.9
15.4
14.9
70.0
NM
43.7
26.6
23.0
17.9
15.4
15.4
70.0
NM
43.1
25.9
22.4
17.8
15.4
15.4
70.0
NM
Expect margins to
decline further as
competition intensifies
ASIAN INSIGHTS
VICKERS SECURITIES
Page 15
Company Guide
Indocement Tunggal P.
1Q2015
2Q2015
3Q2015
4,668
(2,524)
2,144
(786)
1,358
9.00
7.00
180
0.0
1,554
(348)
0.0
1,206
1,206
1,571
5,829
(3,090)
2,739
(944)
1,795
45.0
7.00
177
0.0
2,025
(470)
0.0
1,555
1,555
2,026
4,328
(2,400)
1,928
(695)
1,233
43.0
8.00
183
0.0
1,466
(320)
0.0
1,146
1,146
1,465
4,547
(2,481)
2,066
(782)
1,285
(14.0)
6.00
170
0.0
1,447
(337)
0.0
1,110
1,110
1,746
4,011
(2,253)
1,758
(629)
1,129
16.0
6.00
85.0
0.0
1,236
(273)
0.0
963
963
1,822
(6.6)
(6.7)
(7.0)
(12.6)
24.9
29.0
32.2
28.9
(25.8)
(27.7)
(31.3)
(26.3)
5.1
19.2
4.2
(3.2)
(11.8)
4.3
(12.1)
(13.2)
45.9
29.1
25.8
47.0
30.8
26.7
44.5
28.5
26.5
45.4
28.3
24.4
43.8
28.1
24.0
2013A
2014A
2015F
2016F
2017F
9,305
0.0
456
12,595
1,474
2,519
259
26,607
12,144
0.0
655
11,256
1,666
2,671
494
28,885
14,754
0.0
655
8,284
1,551
2,425
463
28,132
16,305
0.0
655
8,001
1,664
2,587
497
29,707
18,275
0.0
655
7,449
1,825
2,809
544
31,556
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
0.0
1,375
1,365
93.0
797
22,947
30.0
26,607
0.0
1,695
1,565
76.0
764
24,785
0.0
28,885
0.0
1,592
1,499
76.0
764
24,202
0.0
28,132
0.0
1,709
1,571
76.0
764
25,588
0.0
29,707
0.0
1,870
1,672
76.0
764
27,174
0.0
31,556
1,511
12,502
48.6
53.5
58.2
0.8
6.1
5.5
CASH
CASH
2,161.0
14.7
1,570
11,180
47.4
55.9
57.1
0.7
4.9
4.3
CASH
CASH
4,476.9
13.2
1,349
8,208
51.2
64.7
63.3
0.6
4.1
3.5
CASH
CASH
4,602.1
13.3
1,467
7,925
47.2
60.5
59.0
0.7
3.9
3.2
CASH
CASH
3,287.2
12.5
1,635
7,373
46.8
59.8
58.3
0.7
3.6
2.9
CASH
CASH
3,944.6
11.7
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (Pre-ex) (%)
Margins
Gross Margins (%)
Opg Profit Margins (%)
Net Profit Margins (%)
ASIAN INSIGHTS
Page 16
VICKERS SECURITIES
Company Guide
Indocement Tunggal P.
2013A
2014A
2015F
2016F
2017F
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
6,595
810
0.0
0.0
160
(563)
5,419
(2,005)
0.0
0.0
0.0
0.0
(2,005)
(1,658)
(49.0)
0.0
0.0
(1,707)
414
2,121
1,429
927
6,790
878
0.0
0.0
(41.0)
(767)
5,345
(3,405)
0.0
0.0
0.0
9.00
(3,396)
(3,313)
(53.0)
0.0
0.0
(3,366)
77.0
(1,340)
1,463
527
5,695
890
0.0
0.0
221
0.0
5,496
(3,500)
0.0
0.0
0.0
0.0
(3,500)
(4,968)
0.0
0.0
0.0
(4,968)
0.0
(2,972)
1,433
542
5,786
949
0.0
0.0
(118)
0.0
5,286
(2,500)
0.0
0.0
0.0
0.0
(2,500)
(3,070)
0.0
0.0
0.0
(3,070)
0.0
(284)
1,468
757
6,110
1,030
0.0
0.0
(168)
0.0
5,567
(3,000)
0.0
0.0
0.0
0.0
(3,000)
(3,119)
0.0
0.0
0.0
(3,119)
0.0
(551)
1,558
697
Rp
S.No.
23485
21485
2
4
1
3
19485
Dat e
Closing
Pric e
T arget
Price
Rat ing
1:
14 Apr 15
22650
2:
04 May 15
22800
3:
27 May 15
22100
4:
08 J un 15
21425
5:
10 Aug 15
19800
6:
29 Sep 15
16300
7:
13 Oct 15
17525
8:
02 Nov 15
18425
17485
6 7
15485
Mar-15
Jul-15
Nov-15
Mar-16
Not e : Share price and Target price are adjusted for corporate actions.
ASIAN INSIGHTS
VICKERS SECURITIES
Page 17
Semen Indonesia
Version 2
2 Mar 2016
FULLY VALUED
Price Relative
Rp
Relative Index
20,480.0
215
18,480.0
195
16,480.0
175
155
14,480.0
135
12,480.0
115
10,480.0
95
8,480.0
75
6,480.0
Mar-12
Mar-13
Mar-14
Mar-15
55
Mar-16
2014A
26,987
8,295
7,091
5,566
5,566
3.6
938
938
4
938
375
4,070
10.9
10.9
9.0
7.2
3.7
2.5
CASH
24.7
2015A
26,948
7,427
5,851
4,521
4,521
(18.8)
762
762
(19)
762
305
4,454
13.4
13.4
8.3
8.2
3.0
2.3
CASH
17.9
2016F
29,066
7,486
5,975
4,621
4,621
2.2
779
779
2
779
312
4,928
13.2
13.2
10.5
8.3
3.0
2.1
0.0
16.6
2017F
31,761
7,811
6,160
4,770
4,770
3.2
804
804
3
804
322
5,421
12.7
12.7
9.7
7.8
3.1
1.9
CASH
15.5
5
771
B: 19
2
831
S: 5
(2)
965
H: 11
ASIAN INSIGHTS
ed: TH / sa: MA
5,932
60,798 / 4,579
60.0
40.0
5.0
VICKERS SECURITIES
Company Guide
Semen Indonesia
Domestic Sales Volume
29,034
25,900
Earnings Drivers:
Strong presence in three regions to drive top line. SMGR leads
in the domestic cement market with 43% market share, given
its long and strong presence in three key regions - Java,
Sumatra and Sulawesi which account for c.85% of domestic
cement sales. We expect SMGRs sales volume to expand at a
5.7% CAGR over 2015-2017F. This is in line with our industry
demand forecast, which expects modest growth (in line with
Indonesias real GDP growth) for the next two years as the
country is entering a normal growth state.
2015A
14,800
11,100
7,400
3,700
0
2013A
2016F
2017F
Domestic ASP/tonne
1,065,000
984,233
947,077
1,013,760 1,044,173
852,000
639,000
426,000
213,000
0
2013A
2014A
2015A
2016F
2017F
EBITDA margin
33.7
6.7
2014A
27,274
18,500
25,969
22,200
904,542
26,354
33.1
30.7
27.6
25.8
27.0
24.6
20.2
13.5
0.0
2013A
2014A
2015A
2016F
2017F
Revenue trend
Rp bn
30.0%
30,000
25.0%
25,000
20.0%
20,000
15,000
15.0%
10,000
10.0%
5.0%
5,000
0
0.0%
2013A
2014A
Total Revenue
2015A
2016F
2017F
2007
2008
2009
2010
2011
2012
2013
2014
ASIAN INSIGHTS
VICKERS SECURITIES
Page 19
Company Guide
Semen Indonesia
Balance Sheet:
Exposure to USD debt. SMGR has exposure to foreign debt
which it took on to expand into Vietnam in 2013. As of Dec
2015, foreign debt made up about one-third of SMGRs total
long-term debt. Further weakness in the IDR will inflate SMGRs
debt position.
0.25
0.9
0.9
0.20
0.8
0.8
0.15
0.8
0.8
0.10
0.8
0.7
0.05
0.7
0.7
0.00
2013A
2014A
2015A
2016F
2017F
Capital Expenditure
Rp
6,000.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0.0
2013A
2014A
2015A
2016F
2017F
ROE (%)
25.0%
20.0%
15.0%
10.0%
Key Risks:
Further price control by government. The new government had
surprised the market early this year by instructing state-owned
cement producers to cut cement prices by 4-5% per bag.
Further price regulations could hurt profitability.
Slower-than-expected much heralded infrastructure project
rollout. Despite gallant efforts by the government to speed up
the process, project rollouts have been slower than the street's
lofty expectations. Slower execution will directly affect cement
demand growth, and consequently, hurt SMGRs utilisation
and profitability.
Additional risks from overseas expansion. SMGRs vision to
expand overseas presents potential country and political risks.
SMGR has expanded into Vietnam (after acquiring a stake in
Thang Long Cement Company in 2013) and is eyeing
neighbouring countries such Myanmar and Bangladesh.
5.0%
0.0%
2013A
2014A
2015A
2016F
2017F
+2sd:21.5x
20.3
+1sd:19x
18.3
16.3
Avg:16.4x
14.3
1sd:13.9x
12.3
2sd:11.3x
10.3
8.3
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
PB Band (x)
(x)
6.5
+2sd:6.08x
5.5
Company Background
Semen Indonesia (SMGR) is the largest cement producer in
Indonesia with over 40% market share. It has production
facilities on three key islands (Java, Sumatra and Sulawesi) and
solid distribution channels, which enables it to command high
market shares throughout Indonesia.
+1sd:5.07x
4.5
Avg:4.05x
3.5
1sd:3.03x
2.5
2sd:2.01x
1.5
Mar-12
Mar-13
Mar-14
Mar-15
Mar-16
ASIAN INSIGHTS
Page 20
VICKERS SECURITIES
Company Guide
Semen Indonesia
Key Assumptions
FY Dec
2013A
2014A
2015A
2016F
2017F
25,450
904,542
33.0
26,354
947,077
31.0
25,969
984,233
28.0
27,274
1,013,760
26.0
29,034
1,044,173
25.0
Segmental Breakdown
FY Dec
2013A
2014A
2015A
2016F
2017F
24,152
370
26,335
652
25,958
990
28,026
1,039
30,670
1,091
24,522
26,987
26,948
29,066
31,761
6,998
(26.0)
7,078
(124)
5,751
148
5,877
156
6,059
164
6,972
6,954
5,899
6,032
6,223
29.0
(7.0)
26.9
(19.0)
22.2
15.0
21.0
15.0
19.8
15.0
28.4
25.8
21.9
20.8
19.6
2013A
2014A
2015A
2016F
2017F
24,501
(13,557)
10,944
(3,972)
6,972
91.0
35.0
(177)
0.0
6,920
(1,566)
16.0
0.0
5,370
5,370
8,099
26,987
(15,388)
11,599
(4,645)
6,954
202
32.0
(97.0)
0.0
7,091
(1,517)
(8.0)
0.0
5,566
5,566
8,295
26,948
(16,302)
10,646
(4,747)
5,899
46.0
34.0
(129)
0.0
5,851
(1,325)
(4.0)
0.0
4,521
4,521
7,427
29,066
(17,780)
11,285
(5,253)
6,032
46.0
38.0
(142)
0.0
5,975
(1,354)
0.0
0.0
4,621
4,621
7,486
31,761
(19,723)
12,038
(5,815)
6,223
46.0
43.0
(152)
0.0
6,160
(1,396)
5.00
0.0
4,770
4,770
7,811
25.0
17.9
14.1
10.8
10.1
2.4
(0.3)
3.6
(0.1)
(10.5)
(15.2)
(18.8)
7.9
0.8
2.3
2.2
9.3
4.3
3.2
3.2
44.7
28.5
21.9
28.1
18.7
22.5
45.0
39.4
43.0
25.8
20.6
24.7
17.1
19.9
40.0
71.8
39.5
21.9
16.8
17.9
12.5
15.0
40.0
45.8
38.8
20.8
15.9
16.6
11.6
14.1
40.0
42.5
37.9
19.6
15.0
15.5
11.1
13.3
40.0
41.1
Revenues (Rpbn)
Cement
Others
Total
Operating profit (Rpbn)
Cement
Others
Total
Operating profit Margins
Cement
Others
Total
Income Statement (Rpbn)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (Pre-ex) (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
Expect margins to
decline as competition
intensify
ASIAN INSIGHTS
VICKERS SECURITIES
Page 21
Company Guide
Semen Indonesia
2Q2015
3Q2015
4Q2015
7,638
(4,490)
3,148
(1,304)
1,844
103
10.0
(59.0)
0.0
1,897
(417)
(3.0)
1,478
1,478
2,204
6,340
(3,781)
2,560
(1,078)
1,481
8.00
7.00
5.00
0.0
1,501
(307)
(4.0)
1,190
1,190
1,850
6,300
(3,854)
2,446
(1,137)
1,309
(5.0)
7.00
(14.0)
0.0
1,297
(297)
(5.0)
995
995
2,034
6,474
(3,967)
2,507
(1,199)
1,309
58.0
8.00
(70.0)
0.0
1,304
(290)
(2.0)
1,013
1,013
2,417
7,833
(4,700)
3,133
(1,333)
1,800
(15.0)
13.0
(49.0)
0.0
1,749
(432)
6.00
1,323
1,323
3,328
18.2
16.5
19.2
17.1
(17.0)
(16.1)
(19.6)
(19.5)
(0.6)
9.9
(11.7)
(16.4)
2.8
18.8
0.0
1.8
21.0
37.7
37.6
30.6
41.2
24.1
19.3
40.4
23.4
18.8
38.8
20.8
15.8
38.7
20.2
15.6
40.0
23.0
16.9
2013A
2014A
2015A
2016F
2017F
18,863
0.0
2,078
4,213
2,646
2,916
197
30,912
20,221
0.0
2,437
5,032
2,812
3,301
504
34,307
25,168
0.0
2,447
3,992
2,409
3,544
594
38,153
28,714
0.0
2,447
3,120
2,627
3,822
580
41,310
30,626
0.0
2,447
4,190
2,915
4,177
643
44,997
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
321
2,822
2,163
3,242
508
20,935
921
30,912
82.0
3,250
1,954
3,315
606
24,139
960
34,307
139
3,978
2,483
3,156
958
26,420
1,021
38,153
139
4,341
2,309
3,310
958
29,232
1,021
41,310
139
4,815
2,452
3,464
958
32,154
1,016
44,997
774
650
40.5
80.9
72.4
0.9
1.9
1.3
CASH
CASH
71.4
6.5
1,412
1,635
42.0
78.9
70.9
0.8
2.2
1.6
CASH
CASH
75.3
6.5
86.0
698
46.4
89.3
64.5
0.7
1.6
1.1
CASH
CASH
156.9
6.2
379
(329)
46.3
93.0
56.3
0.7
1.5
1.0
0.0
0.0
145.0
5.9
467
587
46.0
92.1
55.8
0.7
1.6
1.1
CASH
CASH
97.1
5.6
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (Pre-ex) (%)
Margins
Gross Margins (%)
Opg Profit Margins (%)
Net Profit Margins (%)
ASIAN INSIGHTS
Page 22
VICKERS SECURITIES
Company Guide
Semen Indonesia
2013A
2014A
2015A
2016F
2017F
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
6,920
1,127
0.0
0.0
(577)
143
6,047
(2,544)
0.0
0.0
0.0
(131)
(2,675)
(2,211)
(69.0)
0.0
(43.0)
(2,324)
0.0
1,048
1,117
591
7,091
1,341
0.0
0.0
(635)
442
6,721
(2,558)
0.0
0.0
0.0
(323)
(2,881)
(2,427)
(500)
0.0
(58.0)
(2,984)
0.0
855
1,240
702
5,851
1,528
0.0
0.0
1,135
100
7,289
(5,168)
0.0
0.0
0.0
(424)
(5,592)
(2,226)
0.0
0.0
(432)
(2,658)
0.0
(962)
1,037
358
5,975
1,453
0.0
0.0
(292)
0.0
5,782
(5,000)
0.0
0.0
0.0
0.0
(5,000)
(1,809)
154
0.0
0.0
(1,654)
0.0
(872)
1,024
132
6,160
1,588
0.0
0.0
(88.0)
0.0
6,264
(3,500)
0.0
0.0
0.0
0.0
(3,500)
(1,849)
154
0.0
0.0
(1,694)
0.0
1,070
1,071
466
Rp
14840
13840
1
4
2
12840
11840
10840
8
9840
6 7
S.No.
Dat e
Closing
Pric e
T arget
Price
1:
03 Mar 15
14825
2:
14 Apr 15
12850
3:
27 May 15
13175
4:
08 J un 15
12975
5:
10 Aug 15
9700
Rat ing
6:
29 Sep 15
9100
7800
F ULLY V ALUED
7:
13 Oct 15
10150
7800
F ULLY V ALUED
8:
30 Oct 15
9800
7800
F ULLY V ALUED
8840
7840
6840
Mar-15
Jul-15
Nov-15
Mar-16
Not e : Share price and Target price are adjusted for corporate actions.
ASIAN INSIGHTS
VICKERS SECURITIES
Page 23
Industry Focus
Indonesia Cement Sector
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STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
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2.
Page 24
Industry Focus
Indonesia Cement Sector
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Page 25