PT Indonesia Kendaraan Terminal Tbk IJ - Initiating... · all factors added with President Jokowi’s ―Tol Laut‖ and intensive infrastructure program outside Java will provide

PT Indonesia Kendaraan Terminal Tbk

Sailing Onwards

BUY (TP: IDR 1,870) 21 November 2018

PT Indonesia Kendaraan Terminal Tbk (IPCC), one of 16 subsidiaries of

Pelindo II (IPC), is appointed to operate as the only car terminal in Indonesia. Being the sole player in the industry has given IPCC pricing

power to adjust its tariff every 2 years starting 2020. IPCC handles the

export-import as well as domestic shipment of Completely Built-up

(CBUs), heavy equipment and also its spare parts. IPCC terminal is strategically located in Tanjung Priok with most automobile

manufacturers situated around it. As of 9M18, IPCC has expanded its

total land area to 34.9 ha which can hold up to 700,000 CBUs per year

Huge potential growth deriving from Indonesia’s low car penetration and export market. In 2016, Indonesia’s car ownership

per capita stood at 5.5% much lower than its neigbouring countries like

Malaysia and Thailand at around 34.1% and 19.6% respectively.

Moreover, numerous brand holder agents in Indonesia have increased their production to boost exports especially to countries with high car

sales growth and IPCC’s main export destination, such as Phillipines

and Vietnam, which grew at 23.7% and 26.3% CAGR FY 13 - 17. These all factors added with President Jokowi’s ―Tol Laut‖ and intensive

infrastructure program outside Java will provide a huge opportunity for

IPCC to ship massive amount of CBUs, both to domestic and export market.

High-profitability business paired with healthy balance sheet. In addition to the attractive industry outlook, IPCC’s business model has

proven to be a high margin business, with gross and net margin

forecasted to reach average of 53.6% and 36.2% in FY18E-22F. This is mainly supported by potential volume growth coupled with its capability

to adjust tariff every 2 years starting 2020. Another thing to note, the

status of being zero leverage and rich cash company has made IPCC become more appealing. IPCC’s healthy balance sheet coupled with low

capex level, since its main operation is only to provide parking for CBUs

of which the land is owned by IPC and rented by IPCC at discount, will

generate strong cash flow in the upcoming years.

We initiate coverage on PT Indonesia Kendaraan Terminal Tbk

(IPCC) with a BUY recommendation and FY19 target price at

IDR 1,870, deriving via DCF valuation with WACC of 16.1%. Our

TP represents potential upside of 32.1% from current market

price. At current price, IPCC is currently trading at 12.00x forward PE.

We believe that IPCC will continue to thrive given the thesis above.

Several key risks include human capital risk, competition risk and

quality risk.

Andy Research Associate +62 21 392 5550 ext. 159 [email protected]

Richardson Raymond Equity Analyst +62 21 392 5550 ext. 159 [email protected]

Stock Information

Sector Infrastructure

Bloomberg Ticker IPCC IJ

Market Cap. (IDR bn) 2,573.01

Share Out./Float (mn) 1,818.4M/407.8M

Current Price IDR 1,415

End-of-FY19 Target Price

IDR 1,870

Upside (%) 32.1%

Share Price Performance

52W High (06/06/18) 1,760

52W Low (12/07/17) 995

52W Beta 1.242

YTD Change (%) N/A

Relative Valuations

Trailing P/E 14.21x

Forward P/E 12.00x

P/BV 2.23x

EV/EBITDA 6.61x

Highlights (IDR mn) 2016 2017 2018E 2019F 2020F

Revenue 314,336 422,053 527,795 586,771 706,787

% growth 27.2% 34.3% 25.1% 11.2% 20.5%

Gross Profit 163,042 206,788 286,955 310,636 386,335

Net Profit 98,358 130,155 181,007 214,387 265,503

% growth 43.4% 32.3% 39.1% 18.4% 23.8%

Gross Margin (%) 51.9% 49.0% 54.4% 52.9% 54.7%

Net Margin (%) 31.3% 30.8% 34.3% 36.5% 37.6%

Return on Equity (%) 53.0% 54.9% 14.0% 15.3% 17.3%

Return on Assets (%) 37.1% 38.9% 12.8% 14.0% 15.7%

EPS (IDR) 98,358 130,155 99.5 117.9 146.0

Company Background

IPCC is Indonesia’s only terminal which functions as a hub for CBUs’

shipments. It operates under Pelindo II (IPC) as one of its 16

subsidiaries of which IPC has 71.28% ownership, while the rests are

owned by PT Multi Terminal Indonesia by 0.7% and public by 28%.

IPCC’s operations are mostly situated in Pelabuhan Tanjung Priok

(PTP).

IPCC is the third largest car terminal in ASEAN and 27th in the world.

The attractiveness of Indonesia’s automotive sector is proven by the

number of automobile productions and sales in 2017. Indonesia

currently sits on ASEAN’s second largest for production and first in

sales. As for world ranking, Indonesia is ranked 17th for sales and 18th

for production.

Source: Company data, Sinarmas Investment Research


IPCC’s ownership structure

2 Infrastructure - IPCC | 21 November 2018

Ranked Countries Units Ranked Countries Units

1 China 29,122,531 1 Indonesia 1,079,534

2 USA 17,583,842 2 Thailand 871,650

3 Japan 5,238,888 3 Malaysia 576,635

4 India 4,017,539 4 Phillipines 425,673

11 South Korea 1,798,796 5 Vietnam 250,619

16 Australia 1,188,677 6 Singapore 116,148

17 Indonesia 1,060,894 7 Brunei 11,209

20 Thailand 873,506 8 Myanmar 8,225

Ranked Countries Units Ranked Countries Units

1 China 29,015,434 1 Thailand 1,988,823

2 USA 11,189,985 2 Indonesia 1,216,615

3 Japan 9,693,746 3 Malaysia 499,639

5 India 4,782,896 4 Vietnam 195,937

6 South Korea 4,114,913 5 Phillipines 141,252

12 Thailand 1,988,823 6 Myanmar 4,930

18 Indonesia 1,216,615

World's car sales 2017 ASEAN'car sales 2017

World's car productions 2017 ASEAN's car production 2017


3 Coal Mining Sector | 23 January 2018

Renewal package over starterpack. We believe the new competition landscape would be focusing more on renewal package/reload package as operators would likely to focus more on expansion and quality improvement since the focus would not be in acquisition anymore. Based on the information from investor relation of TLKM, currently government is working on a new regulation to set guidance on tariff gap between starterpacks and reload packages with price of reload packages must be lower than starter packs to encourage sustainable cus-tomer shift to reload/renewal packag-es. Doing so would help prevent the industry from returning to starterpack-heavy sales model lead to a lower churn rates and achieve the efficiency objectives as set by the existing pre-paid SIM card registration policy. Potential surge in data pricing on welcoming festive season. After the

recent price wars caused by the SIM card

regulation, we expect there will be an increase in data pricing considering that the price wars is beginning to

64%16%

20%

2017

Revenue Share(%)

Telkomsel

XL Axiata

Indosat Ooredoo 66%

17%

17%

1Q18

Revenue Share(%)

Telkomsel

XL Axiata

Indosat Ooredoo

69,830

85,398

103,294

129,044

160,724 167,617

44,946 52,012

58,879

84,484

101,094 105,792

24,280

40,304

50,687 56,483

61,357 64,375

2013 2014 2015 2016 2017 1Q18

BTS on air

TLKM EXCL ISAT

Source:

Business model

IPCC’s operations are segmented into terminal, cargo and value added

services. Terminal services are divided into international (export/

import) and domestic, which provide loading-unloading & stacking yard

for mostly CBUs, heavy equipments and spareparts which contributed

65.7%, 26.2% and 7.1% to total revenue respectively as of 2017.

Cargo services are part of terminal services which provide port

facilities. Value added services provide vehicle processing centre (VPC)

and equipment processing centre (EPC).

For the flow of export, first, car manufacturers deliver CBUs using

roadfreight service (carriers) to IPCC’s terminal, CBUs are then checked

by customs. After that, CBUs will be parked neatly side by side before

moving them to export inspection facility.

Berth is provided by IPCC for mooring Ro-Ro vessels (Roll-on/roll-off)

so that the last step of loading exported cars to vessels can be done

(This process is known as stevedoring). Asides from that, Ro-Ro can

not park itself to the berth, it has to get help from tugboats that

manuevers it by pushing or towing them. Jasa Armada Indonesia

(IPCM) provides the service to IPCC.

Flow of import is actually the other way around, the difference is that

flow of import provides vehicle processing service (VPC). The flow of

export & import for heavy equipments and spareparts is the same as

CBUs.

For domestic CBUs, heavy equipment and spare parts’ shipment, it

follows the flow of export except the destinations are within Indonesia.

Heavy equipment and spare parts are mostly shipped outside Java for

mining purposes.

IPCC’s flow of export


IPCC’s flow of import



Source: Sinarmas Investment Research

Berth and ro-ro vessel


Vehicle processing centre

Tug boat and vessel



Part of international terminal

Multistorage building


Part of domestic terminal



Industry overview

Ports in Indonesia. Port’ business in Indonesia is mostly operated by

Pelabuhan Indonesia (Pelindo). Pelindo consists of Pelindo I, II, III and

IV. Pelindo II operates 3 main ports and 9 supporting ports around

Western & Central Java, Parts of Sumatera and Kalimantan, of which

around 50% of all Indonesia’s port traffics are situated in Pelabuhan

Tanjung Priok (PTP). The reason is that Indonesia’s GDP is mostly

concentrated in the island of Java and Sumatera with on average

58.61% and 21.54% respectively.

Indonesia and ASEAN’s car productions and sales. IPCC terminal

is located inside PTP area, and automobile factories are strategically

situated around it. Indonesia’s car productions have experienced a

magnificent increase from 2008—2014 since Japanese car

manufacturers were attracted by low car ownership ratio, growing size

of middle class and cheap labour costs. In terms of other significant car

manufacturers in ASEAN, Thailand has maintained to be the first since

2006 mainly due to corporate income tax exemption for up to eight

years, permit to own land, import duty exemption on machinery and

raw materials for manufacturing export products and many more,

whereas Malaysia has been undergoing stagnation in production since

2006 due to Malaysia’s slowing economy and weak ringgit.


IPC’s port locations


Indonesia’s GDP 2Q 2018


In terms of car sales, Indonesia has experienced a gradual increase

from 2006 - 2013 as the size of middle class in the country is growing

and significant fuel subsidy shift the market demand from motorbikes

to cars, however it faced negative growth from 2014 - 2015 since the

declining price of coal caused decreasing sales of commercial vehicles.

The growth has been stabilising since 2015, and in the same year

Indonesia became the first in ASEAN’s car sales. Looking at other

ASEAN peers, Thailand’s car sales has been declining since 2012 and

back to its 2006 level due to weak consumption and fading effect of

first-time car buyer scheme that ended in 2012. Surprisingly, the

Phillipines and Vietnam car sales have been experiencing a significant

increase since 2012 due to the Phillipines’ CARS program and Vietnam’s

steady elimination of tariffs for passenger cars through free trade

agreement.

Source: Asean Car Federation, Gaikindo, Sinarmas Investment Research

ASEAN’s car productions 2006 – 2017


Automotive producers around IPCC

-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Brunei Indonesia Malaysia Myanmar Phillipines Singapore Thailand Vietnam

ASEAN’s car sales 2006 – 2017

Source: Asean Car Federation, Gaikindo, Sinarmas Investment Research

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Brunei Indonesia Malaysia Myanmar Phillipines Singapore Thailand Vietnam


CBUs’ export and import market. Domestically, IPCC does not have

a competition since it is the only entryway for CBUs’ export and import

in Indonesia. Competition mainly comes from international car

terminal, especially in ASEAN region, namely Namyong Auto Port from

Thailand, Pasir Panjang Automobile Terminal from Singapore and Asian

Auto Terminal Inc from the Phillipines. These 4 terminals combined

have total throughput of 2,910,000 CBUs.

Specifically, Indonesia’s export growth rate has been increasing since

2011 - 2017 with a CAGR of 13.5%, recent data from Gaikindo states

September’s 2018 export growth rate has increased by 10.4%. Recent

data from Gaikindo states September’ 2018 import growth rate is

4.9%, however CBU’ import growth rate has been decreasing

throughout 2013 - 2017 with a CAGR of 2.6%. Indonesia has been a

net exporter of CBUs since 2011.

Source: Gaikindo, Sinarmas Investment Research

Indonesia’s CBUs export and import 2011 - 9M2018


Throughput of vehicles in ASEAN’s prominent terminals

NAMYONG

34.0%

PASIR PANJANG

35.1%

ASIAN

TERMINALS

6.9%

IPCC 24.1%

0

50,000

100,000

150,000

200,000

250,000

2011 2012 2013 2014 2015 2016 2017 9M2017 9M2018

Export Import


Investment thesis

Increasing demand from export of CBUs market. Some car

manufacturers will expand their production to augment export. Toyota Motor Manufacturing Indonesia is targeting exports to rise by 10% to

217,000 units this year. Mitsubishi will increase production capacity

from 160,000 to 220,000 in 2020 of which 45,000 will be exported to non-ASEAN market. Suzuki has targeted to export 50,000 CBUs

between March 2018 to September 2019, most of these export will go

to the Phillipines and Mexico. Recently, Prime Minister of Vietnam

Nguyen Xuan Phuc and President Joko Widodo made a deal of which Indonesia has to comply with Vietnam’s vehicle type approval (VTA) in

order to export CBUs to Vietnam. The deal ended the ban for imported

CBUs from Indonesia since 1 January 2018. From Saudi Arabia, there will be an increase in export due to the lifted ban on women driving

cars since 24 June 2018, it is estimated that this will increase number

of cars imported by 15% annually. These recent news are positively correlated to the increase in IPCC’s revenue, since most of IPCC’s

export destination country above are IPCC’s main market.

Other prospects are Wuling’s export plan and Namyong - IPCC’s future

partnership. Wuling has planned to export to right-hand traffic

countries, specifically to Malaysia and Thailand. The plan is quite

realistic given that it has built a factory as wide as 60 ha in Cikarang

with IDR 9.6 tn capital expenditure and has 120,000 capacity of CBUs

per year. Recently, Namyong’s management visited IPCC and began a

talk about future partnership to move the transit hub for exporting

CBUs to Australia via IPCC. IPCC’s management said that Namyong is

interested with the productivity and business process of IPCC, and the

two companies are considering a possibility to formulate a synergy to

be a global car terminal operator where the two will jointly manage and

operate car terminals globally including South East Asia. It is worth

noting that in 2017, 26% or 288,171 units of Thailand’s exports of CBU

come from Australian market.

Huge potential from current low car penetration. In 2016,

Indonesia’s car ownership ratio was around 5.5% whereas

neighbouring countries like Malaysia and Thailand was around 34.1%

and 19.6% respectively. President Jokowi’s ―Tol Laut‖ program has led

intensive infrastructure development especially in Eastern region of

Indonesia. Infrastructure development will boost economic activity in

Eastern region of Indonesia which will lead to increasing number of car

ownership ratio outside Java. Taking example from China, the

introduction of special economic zone in 1980s led to coastal cities and

IPCC’s CBUs export market


Destination country Share

Phillipines 40.6%

Saudi Arabia 18.9%

Japan 8.0%

Vietnam 7.6%

Mexico 6.9%

Thailand 6.3%

UAE 3.8%

Peru 2.8%

Malaysia 2.6%

South Africa 2.5%

Export 2017


successfully attracted capital/business from Chinese communities and

foreign investors which helped increasing GDP per capita and car

ownership per capita.

Transfer of domestic CBUs from Pelabuhan Tanjung Priok (PTP).

The ministry of transportation has officially stated that all domestic CBU

traffic (175,000 units) has been given to IPCC from PTP starting June

2018. The plan was to move 125,000 CBUs until December 2018 and

the rest will be done on March 2019. This means the growth of CBUs in

domestic terminal will increase by 379% in FY18E and 31.6% in FY19F.

Tol Laut Program

Source: Bappenas, Sinarmas Investment Research

GDP per capita and car ownership correlation


0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

0

5000

10000

15000

20000

25000

30000

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

GDP per capita (Yuan) Car ownership per capita

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Vietnam Indonesia Thailand Malaysia

Countries

Indonesia’s car ownership per capita vs neighbouring peers



New adjusted tariff deal. Tariff is adjusted every five years, however

the management has said that the new adjustment will take place

every 2 years starting 2020 and ranges between 10% - 15%. With the

tariff hike, we estimated revenue to grow by 15.4% CAGR FY18E -

FY22F, while net margin will remain stable on average at 36.2% FY18E

- FY22F.

IPCC’s land concession


Domestic cargo flows



Well planned expansion. IPCC started with a capacity of 400,000

CBUs per year in 2012. As of September, IPCC has expanded its total

land area to 34.9 ha with a capacity of 700,000 CBUs per year. The

terminal is divided into international which made up of 450,000 CBUs

(64.28%) and 250,000 (35.72%) for domestic. Going forward, the

management plans for expansions including a new multi-storage

building, port stock and road-freight business (carriers) in 2019F. New

multi-storage building is required since occupancy rate has reached

70%, the capital expenditure (capex) of new multi-storage will be

around IDR 100bn and can park around 6000 CBUs per month or

72,000 per year on average. This will increase total capacity by 10.3%

from current condition. The construction has begun on October 2018

and estimated to be completed on April 2019. Right after that, IPCC will

build port stock yard so that CBUs can be delivered rightaway to IPCC

after manufactured. Port stock yard will use up around IDR 20 bn of

capex and will charge IDR 10,000 - 15,000 per unit of CBU parked in

there. Lastly, IPCC will also get into carriers business in early 2019.

One carrier can carry up to eight CBUs per service and IPCC plans to

charge around IDR 600,000 per unit, so it could contribute around IDR

4,800,000 per service. The budget will be around IDR 15 bn for

purchasing 10 carriers.


IPCC’s land concession


Financial highlights

Robust top-line growth. As of 9M18, IPCC recorded its revenue at

IDR 383bn (+28.2% YoY), of which 62% coming from CBUs, followed

by 34% and 3% from heavy equipment and spare parts respectively.

For FY18E, revenue will reach IDR 528bn, up by 25.1% YoY supported

by strong volume shipments of CBUs (+44.2% YoY) and heavy

equipment (+23.7%) , as well as the one-off domestic CBUs transfer

from PTP. Total CBUs to be transferred from PTP will account for

175,000 units, in which 125,000 units will be done starting June 2018

to the end of the year, while the rest will be completed in 1Q19. In the

upcoming years, revenue growth is expected to remain strong at

15.4% CAGR FY18E - 22F, boosted by increasing CBU throughputs as

well as increasing tariff of 10% - 15% for every 2 years starting 2020.

High and stable profitability. For FY18E we estimate IPCC’s gross

margin (GPM) will be at 54.4% (vs 49% in FY17), which was due to

lower rent and the domestic transfer of CBUs from PTP. Consequently,

net profit is expected to reach IDR 181bn (+39.1% YoY) in FY18E,

translated to net margin (NPM) at 34.3%. In addition to better GPM,

IPCC’s bottom-line is also helped by increasing finance income of IDR

13bn (+46.3%), which is a result of significant jump in cash position to

IDR 981bn in FY18E derived from IPO proceeds, Five years ahead, we

expect IPCC’s margin to remain robust, with GPM and NPM averaging

at 53.6% and 36.2% in FY18E - 22F. This is benefitting from IPCC’s

capability to adjust its tariff and also help from finance income. Higher

profitability will also reflected in higher ROE and ROA which is expected

to reach average of 16.4% and 14.9% in FY18E - 22F.

IPCC’s revenues breakdown


0%

5%

10%

15%

20%

25%

30%

35%

40%

0

100

200

300

400

500

600

700

800

2015 2016 2017 2018E 2019F 2020F

IDR

billions

CBUs Heavy Equipment

Spareparts Motorcycles

Others %growth

Revenues breakdown from CBU


0

100

200

300

400

500

600

2015 2016 2017 2018E 2019F 2020F

IDR

billions

Export Import Domestic


Revenues breakdown from heavy equipment

0

20

40

60

80

100

120

140

160

180

2015 2016 2017 2018E 2019F 2020F

IDR

billions

Export Import Domestic


Strong balance sheet with no debt. Post IPO, total equity will stand

at IDR 1,296 bn (+446.7% YoY). Cash will also increase by 404% YoY

to IDR 879.8bn, representing 89% of total current assets & 62% of

total assets respectively. Despite huge amount of cash, IPCC has no

debt on its book and hence no liquidity & solvency issue in the near

future. Moreover, the nature business of IPCC does not require huge

amount of capex level as the land itself is owned by Pelindo and rented

by IPCC at discount. Overall, we see IPCC’s healthy balance sheet

coupled with low capex level will generate strong cash flow in the

upcoming years.

IPCC profitability


Strong balance sheet with no debt


0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2015 2016 2017 2018E 2019F 2020F

GPM OPM NPM

0

200

400

600

800

1000

1200

1400

1600

1800

2015 2016 2017 2018E 2019F 2020F

IDR

billions

Assets Liabilities Equity


Key risks

Human capital risk. It is forecasted that throughputs of CBU will keep

increasing over the years. This means that IPCC’s needs more

workforce to handle more CBUs coming in, the risk will be if the

throughputs of CBU outnumbered the supply of workforce. This may

cause disruptions in IPCC’s operation like longer dwell time and hence

longer queues.

Competition risk. Some governments offer numerous benefits for

automakers, for example Thailand’s which provide benefits like

exemption on corporate tax up to eight years, permit tow own land,

import duty exemption on raw materials and so on. This proactive

approach has made Thailand to be the first in ASEAN’ CBUs production

(In 2000—2017, Thailand produced 20,608,919 cars and exported

more than half of them). If the stakeholders in the Indonesia’s

automotive industry are not as aggresive as Thailand’s, then the risk

will be that car manufacturers will choose Thailand over Indonesia and

hence less export market for IPCC.

Quality risk. Most countries require certain standard for imported

CBUs. Indonesia has not yet adopted the automotive production

standard (United Nations Economic Commission for Europe/ UNECE)

that has been required by most developed countries. This means that

the IPCC can only target developing countries like most South East

Asian, South American, African and Middle Eastern countries. As a

result, it could limit IPCC’s potential growth to tap into developed

market.


15 Coal Mining - ADRO | 23 January 2018

Income Statement (IDR mn) 2016 2017 2018E 2019F 2020F

Revenue 314,336 422,053 527,795 586,771 706,787

COGS 151,294 215,264 240,840 276,136 320,452

Gross Profit 163,042 206,788 286,955 310,636 386,335

%growth 38.6% 26.8% 38.8% 8.3% 24.4%

Other Operating income (expense) (1,593) 9,369 (5,595) (5,633) (7,139)

G&A 35,419 50,451 52,779 64,979 77,812

Operating Profit 126,029 165,706 228,581 240,024 301,385

%growth 42.0% 31.5% 37.9% 5.0% 25.6%

Finance income(exp) 8,083 9,000 13,169 45,623 51,920

EBT 134,112 174,707 241,750 285,647 353,305

Tax 35,754 44,552 60,742 71,260 87,801

Net profit 98,358 130,155 181,007 214,387 265,503

%growth 43.4% 32.3% 39.1% 18.4% 23.8%

Balance Sheet (IDR mn) 2016 2017 2018E 2019F 2020F

Cash & equivalents 91,770 174,601 879,812 945,580 1,131,806

Trade receivables 54,246 58,022 89,653 83,595 100,693

Other CA 42,783 12,047 15,183 12,021 17,452

Total Current Assets 188,799 244,670 992,565 1,049,997 1,260,553

PPE & Intangible Assets 62,162 81,651 109,822 232,684 248,437

Other LT assets 13,980 8,417 40,672 30,915 34,246

Total Assets 264,941 334,738 1,415,059 1,529,596 1,695,235

Payables 48,714 67,192 78,006 83,908 102,698

Short-term loans - - - - -

Other current liabilities 30,649 30,498 41,165 44,017 53,996

Total Current Liabilities 79,363 97,690 119,171 127,925 156,694

Long term loans - - - - -

Other long term liabilities - - - - -

Total Liabilities 79,363 97,690 119,171 127,925 156,694

Share & APIC 10,000 10,000 181,838 181,838 181,838

Other equity - - - - -

Retained earnings 175,579 227,048 329,962 435,745 572,616

NCI - - - - -

Total Equity 185,579 237,048 1,295,888 1,401,671 1,538,542

Total Equity & Liabilities 264,941 334,738 1,415,059 1,529,596 1,695,235


16 Coal Mining - ADRO | 23 January 2018

16 Retail | 27 April 2018

Cash Flow (IDR mn) 2016 2017 2018E 2019F 2020F

Net Income 98,358 130,155 181,007 214,387 265,503

Depreciation & amortization 5,452 7,683 9,944 21,340 31,576

Chg. in NWC 34,680 (45,288) 21,203 (17,090) (4,439)

CF from Operating 69,129 183,125 169,748 252,817 301,518

Capital Expenditure 34,805 27,046 39,606 144,000 47,150

Chg. in LT Assets (3,345) (5,437) 302,764 (65,556) (60,490)

Chg in LT Liabilities - - - - -

CF from Investing (31,460) (21,609) (342,370) (78,444) 13,340

Chg. in Share & APIC - - 955,926 - -

Chg. In other equity - - - - -

Chg. in Bank Loans - - - - -

Dividends Paid 68,572 78,686 78,093 108,604 128,632

CF from Financing (68,572) (78,686) 877,833 (108,604) (128,632)

Change in Cash (30,903) 82,831 705,211 65,768 186,226

Beginning Cash 122,673 91,770 174,601 879,812 945,580

Ending Cash 91,770 174,601 879,812 945,580 1,131,806

Financial Ratio 2016 2017 2018E 2019F 2020F

Profitability

ROE 53.0% 54.9% 14.0% 15.3% 17.3%

ROA 37.1% 38.9% 12.8% 14.0% 15.7%

Gross margin 51.9% 49.0% 54.4% 52.9% 54.7%

Operating margin 40.1% 39.3% 43.3% 40.9% 42.6%

Net profit margin 31.3% 30.8% 34.3% 36.5% 37.6%

Liquidity & Solvency

Current Ratio 2.4 2.5 8.3 8.2 8.0

Debt to Equity - - -

-

-

Debt to Assets - - -

-

-

DPR 69.7% 60.5% 60.0% 60.0% 60.0%

Valuation

Price to earning (PE) 27.3 19.0 14.4 18.8 15.9

Price to book value (PBV) 12.0 10.01 7.9 2.6 2.43


SINARMAS SEKURITAS INVESTMENT RATINGS GUIDE BUY: Share price may rise by more than 15% over the next 12 months. ADD: Share price may range between 10% to 15% over the next 12 months. NEUTRAL: Share price may range between –10% to +10% over the next 12 months. REDUCE: Share price may range between –10% to –15% over the next 12 months. SELL: Share price may fall by more than 15% over the next 12 months. DISCLAIMER This report has been prepared by PT Sinarmas Sekuritas, an affiliate of Sinarmas Group. This material is: (i) created based on information that we consider reliable, but we do not represent that it is accu-rate or complete, and it should not be relied upon as such; (ii) for your private information, and we are not solicit-ing any action based upon it; (iii) not to be construed as an offer to sell or a solicitation of an offer to buy any secu-rity. Opinions expressed are current opinions as of original publication date appearing on this material and the infor-mation, including the opinions contained herein, is subjected to change without notice. The analysis contained here-in is based on numerous assumptions. Different assumptions could result in materially different results. The analyst(s) responsible for the preparation of this publication may interact with trading desk personnel, sales personnel and other constituencies for the purpose of gathering, integrating and interpreting market information. Research will initiate, update and cease coverage solely at the discretion of Sinarmas Research department. If and as applicable, Sinarmas Sekuritas’ investment banking relationships, investment banking and non-investment banking compensa-tion and securities ownership, if any, are specified in disclaimers and related disclosures in this report. In addition, other members of Sinarmas Group may from time to time perform investment banking or other services (including acting as advisor, manager or lender) for, or solicit investment banking or other business from companies under our research coverage. Further, the Sinarmas Group, and/or its officers, directors and employees, including persons, without limitation, involved in the preparation or issuance of this material may, to the extent permitted by law and/or regulation, have long or short positions in, and buy or sell, the securities (including ownership by Sinarmas Group), or derivatives (including options) thereof, of companies under our coverage, or related securities or deriva-tives. In addition, the Sinarmas Group, including Sinarmas Sekuritas, may act as market maker and principal, will-ing to buy and sell certain of the securities of companies under our coverage. Further, the Sinarmas Group may buy and sell certain of the securities of companies under our coverage, as agent for its clients. Investors should consider this report as only a single factor in making their investment decision and, as such, the report should not be viewed as identifying or suggesting all risks, direct or indirect, that may be associated with any investment decision. Recipients should not regard this report as substitute for exercise of their own judgment. Past performance is not necessarily a guide to future performance. The value of any investments may go down as well as up and you may not get back the full amount invested. Sinarmas Sekuritas specifically prohibits the redistribution of this material in whole or in part without the written permission of Sinarmas Sekuritas and Sinarmas Sekuritas accepts no liability whatsoever for the actions of third parties in this respect. If publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of this publication, which may arise as a result of electronic transmission. If verification is required, please request a hard-copy version. Additional information is available upon request. Images may depict objects or elements which are protected by third party copyright, trademarks and other intellec-tual properties.

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