Indonesia: KLBF, Kalbe Farma Registered Net Income of Rp2,435bn (+4% yoy) Forming 101% of Market Consensus

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1. 29 March 2018 Premier Insight News & Analysis Corporates 12,000 6,600 10,000 6,500 8,000 6,300 6,000 Rp bn JCI Index 6,400 6,200 4,000 6,100 2,000 ACES: Ace Hardware (ACES IJ; Rp1,300; Hold) reported a net profit of Rp778bn (+9% yoy) reaching 99% of market consensus. Revenue grew slightly higher than COGS, stretching GPM to 47.7% (2016: 47.6%). While operating cost jumped higher (+21% yoy) dragging OPM and NPM to 14.6% and 13.1%, respectively. On quarterly basis, 4Q17 net profit was at Rp251bn (+26% qoq, +7% yoy) forming 32% of FY17 earnings. 6,000 Comment: The net profit came 5% higher than our forecast but relatively in-line with market consensus. We maintain positive view on ACES and will review the forecast accordingly. 28-Mar 27-Mar 26-Mar 23-Mar 22-Mar 21-Mar 20-Mar 19-Mar 16-Mar 15-Mar 14-Mar 9-Mar 13-Mar 8-Mar 12-Mar 7-Mar 6-Mar 5-Mar 2-Mar 1-Mar 28-Feb - 27-Feb 5,900 28-Mar 27-Mar 26-Mar 23-Mar 22-Mar 21-Mar 20-Mar 19-Mar 16-Mar (0) 15-Mar 0% 14-Mar 5% - 13-Mar 0 -5% (0) -10% (0) -15% (0) -20% (0) -25% % net buy/market turnover Foreign net buy (sell) Net buy (sell) in Rp bn Equity | Indonesia | Research Daily JCI Index 6,700 Key Indexes Index JCI LQ45 4Q17 3Q17 4Q16 (IDR b) (IDR b) (IDR b) (IDR b) (q-q%) Revenue 1,716 1,463 1,422 17.3 20.6 COGS (914) (752) (721) 21.6 26.8 1 day 6,141 - 1.1% 1 year 9.8% YTD -3.4% (y-y%) FY17 FY16 Change % % (IDR b) (IDR b) (y-y %) Forecast Consensus 5,939 4,936 20.3 105% 92% (3,104) (2,584) 20.1 20.5 105% 88% Gross profit 801 711 664 12.7 20.7 2,835 2,352 Op. cost (528) (489) (373) 8.0 41.5 (1,965) (1,622) 21.2 Op. profit 273 222 291 22.9 (5.9) 869 730 19.1 (65.7) Interest expense (3) (0) (4) 981.0 (21.5) (5) (15) Tax (55) (46) (64) 20.4 (13.2) (179) (157) 14.2 39 24 13 61.4 194.0 96 148 (35.2) Other Closing ——Change—— Minority (3) (2) (2) 43.3 49.1 (3) 4 (166.8) Net profit 251 198 234 26.7 7.2 778 711 9.4 Margin (%) 1,000 - 1.5% 7.6% -7.3% 23,848 0.0% 15.4% -3.5% Gross margin 46.7 48.6 46.7 47.7 47.6 SET 1,785 - 1.0% 13.3% 1.8% Op. margin 15.9 15.2 20.4 14.6 14.8 HSI 30,023 - 2.5% 23.1% 0.3% Net margin 14.6 13.6 16.5 13.1 14.4 NKY 21,031 - 1.3% 9.4% -6.7% DJI FTSE 7,045 0.6% -4.5% -8.4% FSSTI 3,383 - 1.6% 6.2% -0.6% 27 0.0% 2.1% -6.8% EIDO Commodity price Commodities Last price Ret 1 day Ret 1 year (in USD) Oil/barrel (WTI) 64.4 -1.3% 33.1% 625.3 -0.5% -10.7% Soy/bushel 9.9 -0.4% 3.4% Rubber/kg 1.7 0.0% -43.7% Nickel/tonne 13,081 1.0% 31.8% Tins/tonne CPO/tonne 20,965 0.1% 4.5% Copper/tonne 6,634 0.4% 13.4% Gold/try.oz (Spot) 1,325 -1.5% 5.7% 96.7 -0.3% 19.7% Coal/tonne Corn/bushel Wheat/bushel (USd) Source : Bloomberg 3.5 0.0% 2.7% 447.0 0.3% 5.1% ISAT: Indosat (ISAT IJ; Rp4,850; Buy) booked a net income of Rp1,302bn (+2% yoy) forming only 82% of analysts’ consensus. COGS growth (+6% yoy) outpaced revenue growth (+2% yoy) by 4% driving GPM lower at 57% in 2017 (2016: 59%). Operating profit was flat at Rp3,910bn (+0.5% yoy). Net profit grew modestly to Rp1,302bn (+2.1% yoy) backed by lower interest expense of Rp2,121bn (-6% yoy). BISI: Bisi International (BISI IJ; Rp1,825; Buy) reported better than expected 4Q17 results with details as follow; • 4Q17 net profit increased 39% qoq and 78% yoy to Rp183bn on the back of improved revenues. • FY17 net profit increased 20% yoy to Rp403bn (45% generated in 4Q17) which came in 24% above the consensus and 55% above our earnings forecast. • Revenues in 4Q17 surprisingly increased by 39% qoq and 28% yoy despite heavy rainfall in the period, we are currently waiting for detail operational numbers from the company. • Revenues in FY17 increased 25% yoy to Rp2.31tn, came in 8% above the consensus and 17% above our forecast. • With high portion of fixed costs, higher revenues translate to margin expansion which allowed BISI’s operating profit to increase 53% qoq and 75% yoy to Rp238bn in 4Q17. BISI’s EBIT in FY17 came in 21% above the consensus and 45% above our estimate. (Company) Comment: We will review our forecast and valuation for the company. At this stage, we retain our Buy rating for BISI. Refer to Important disclosures in the last page of this report
2. PremierInsight (Rp Bn) FY17 FY16 % Y-Y 4Q17 % Q-Q % Y-Y vs. cons. vs. ours. Revenues 2,310.3 1,852.1 24.7 847.3 38.8 28.2 108.0 117.2 COGS 1,430.0 1,048.1 36.4 478.3 36.5 30.0 Gross profit 880.3 803.9 9.5 369.1 42.1 26.0 108.2 130.7 G&A expenses 104.5 110.0 (5.0) 34.5 14.9 (32.6) (1.1) 120.9 144.9 118.0 147.8 123.7 155.0 Selling expenses 286.3 245.8 16.4 97.0 30.9 Operating profit 489.5 440.6 11.1 237.5 52.7 74.5 18.5 14.4 28.4 3.8 (2.5) (18.2) Net interest inc. (exp) Forex gain (loss) - - na (1.2) (200.0) (35.8) 11.2 - na 2.0 (49.8) (90.3) Pretax profit 519.2 454.1 14.3 242.1 47.0 52.7 Tax 115.9 117.9 (1.7) 58.8 80.4 5.8 Other Minority Interest 0.1 0.1 28.9 0.0 (44.1) 26.7 Net profit 403.2 336.1 19.9 183.3 38.8 78.1 GPM (%) 38.1 43.4 43.6 34.2 OPM (%) 21.2 23.8 28.0 17.1 Pretax mgn (%) 22.5 24.5 28.6 17.8 NPM (%) 17.5 18.1 21.6 13.2 KLBF: Kalbe Farma (KLBF IJ; Rp1,440; Buy) registered net income of Rp2,435bn (+4% yoy) forming 101% of market consensus. The revenue was at Rp20,182bn (+4.2% yoy) while COGS and operating expenses were at Rp10,369bn (+4.9% yoy) and Rp 6,597bn (+5.7% yoy), resulting to gross profit of Rp9,813bn (+3% yoy) and operating profit of Rp3.216 (-1% yoy). All profitability margins also gauged lower. GPM, OPM, and NPM 2017 were at 48.6%, 15.9%, 12.2%, consecutively (2016: 49%, 16.8%, 12.1%). SSIA: Surya Semesta Internusa (SSIA IJ; Rp545; Buy) booked earnings of Rp1.2tn in FY17 (FY16: Rp62.5bn) mainly supported by capital gain from the sale of Cipali toll road of Rp1.3tn. Gross and operating margin were compressed at 26% and 7%, respectively (FY16: 28% & 11%) due to lower revenue of Rp3.3tn (-13.8% yoy). Net margin were up to 36% due to hike in other income to Rp1.8tn (FY16: -Rp55bn). Without the capital gain from Cipali divesmetn, SSIA would have book net loss of Rp147bn.) in quarterly basis, SSIA booked a loss of Rp51bn in 4Q17. (Company) FY17 FY16 % yoy 4Q17 3Q17 % qoq % of Ours % of consensus Sales (Rp Bn) 3,274.2 3,797.0 -13.8% 918.4 800.2 14.8% 96.1% 92.0% COGS (2,410.2) (2,728.0) -11.6% (707.1) (562.0) 25.8% 863.9 1,069.0 -19.2% 211.3 238.2 -11.3% 94.2% 92.6% (629.5) (636.3) -1.1% (157.6) (160.3) -1.7% 67.0% 26.5% 95.2% 133.2% Gross Profit Opex Operating Profit 234.4 432.7 -45.8% 53.7 77.9 -31.1% Finance Inc. (Exp.) (242.7) (180.8) 34.3% (55.5) (61.0) -8.9% Other Inc. (Exp.) 1,790.8 (55.2) -3341.4% 37.1 13.1 182.7% Pretax Income 1,782.5 196.7 806.3% 35.2 30.1 17.0% Tax (541.1) (95.8) 464.6% (71.0) (30.8) 131.0% Net Income 1,178.4 62.5 1786.5% (50.9) (5.5) 823.9% GPM (%) 26% 28% 23% 30% OPM (%) 7% 11% 6% 10% NPM (%) 36% 2% -6% -1% Economics BI governor: The House of Representative passed the nomination of Perry Warjiyo to become the next BI governor – consensus was achieved without voting. Perry’s career was largely developed within the central bank and his appointment was greeted positively by SOE Banks Association. (Jakarta Globe, CNN) Comment: Upon succession, Perry will soon be assessed on his stance for three important issues, namely (1) Stance support growth or maintaining stability, (2) Direction for fintech development, and (3) Further exploration of macroprudential policy, as BI has always signaled this is the direction to go outside of interest rate. Refer to Important disclosures in the last page of this report 2
3. Head Office PT INDO PREMIER SEKURITAS Wisma GKBI 7 /F Suite 718 Jl. Jend. Sudirman No.28 Jakarta 10210 - Indonesia p +62.21.5793.1168 f +62.21.5793.1167 INVESTMENT RATINGS BUY : Expected total return of 10% or more within a 12-month period HOLD : Expected total return between -10% and 10% within a 12-month period SELL : Expected total return of -10% or worse within a 12-month period ANALYSTS CERTIFICATION. The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report. DISCLAIMERS This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.