reports
- Selvi Ocktaviani
Construction – Positive Impact Of EV Industry Development On Contracto...
The government is highly supportive of the EV industry, with the contractors WIKA (Gesits motorcycle production) and PTPP (KITB development and nickel mining service) having projects related to the EV industry. The revenue contribution from Gesits is still small; WIKA sold 1,200 units in 2022. PTPP booked Rp1t in revenue (7% contribution) from Weda Bay Nickel in 9M22. We believe the development of the EV industry could bring more upside revenue. Maintain MARKET WEIGHT. Top pick: PTPP.
- Maskun Ramli
- Selvi Ocktaviani
- Selvi Ocktaviani
Construction – Development Of IKN To Have Neutral Impact On Constructi...
IKN’s development has started, with modular housing by WEGE and ADHI becoming the first buildings in IKN. According to IKN’s head of authority, 59 LOI from various investors have been received, with three investors planning to invest Rp41t and having received principal permits. However, we believe that investors will adopt a wait-and-see stance due to the high uncertainty of macroeconomic conditions as well as the upcoming presidential election. IKN’s development may not significantly impact the...
- Maskun Ramli
- Selvi Ocktaviani
- Selvi Ocktaviani
Waskita Karya (WSKT IJ) - Delaying Rights Issue Plan, Unattractive If ...
WSKT’s indicative minimum exercise price for its rights issue would be Rp456, above its current market price of Rp410. Public investors are unlikely to exercise their rights under the premium price offered. However, Rp3t of state capital injection will still be disbursed in 2022 despite a potential delay in the rights issue process. WSKT’s burn rate started to improve in 3Q22. We expect WSKT to book an operating profit in 2023 with a much lower loss in bottom line. Downgrade to HOLD with a targe...
- Maskun Ramli
- Selvi Ocktaviani
- Chaiwat Arsirawichai
- Greater China Research Team
- Jessie Guo Yuting
- John Cheong Ming Chern
- Keith Wee Teck Keong
- Ken Lee
- Kong Ho Meng
- Llelleythan Tan Tan
- Selvi Ocktaviani
- Tham Mun Hon
Regional Morning Notes - Tuesday, December 06, 2022
GREATER CHINA Strategy 2023 : Cross-currents: We are positive on 1H23; recommend overweighting reopening and reflationary beneficiaries. Update BYD Company (1211 HK/BUY/HK$196.00/Target: HK$440.00): November sales up 134% yoy and 6% mom to 230,427 units, in line with expectation. Maintain BUY. Target price: HK$440.00. INDONESIA Update Waskita Karya (WSKT IJ/HOLD/Rp410/Target: Rp430): Delaying rights issue plan, unattractive if offered at premium price. Downgrade to HOLD. MALAYSIA Sector Banki...
- Selvi Ocktaviani
Construction – Top-line Recovering But Bottom Line Struggling To Reach...
New contract achievements grew 40%, signalling that infrastructure projects are starting to resume, while IKN projects may also contribute to new contract achievement. Material prices have normalised. Burn rate and revenue are expected to recover but the bottom line may remain depressed as the high gearing and burden of interest expense cannot be resolved in a short period. Maintain MARKET WEIGHT. Top pick: PTPP.
- Maskun Ramli
- Selvi Ocktaviani
- Arsit Pamaranont
- Jacquelyn Yow Hui Li
- Jieqi Liu
- John Cheong Ming Chern
- Kampon Akaravarinchai
- Leow Huey Chuen
- Philip Wong
- Selvi Ocktaviani
- Tham Mun Hon
Regional Morning Notes - Wednesday, October 12, 2022
GREATER CHINA Economics Money Supply: Encouraging increase in medium- and long-term loans. Sector Property: Second-hand property market seeing signs of recovery; SOE developers booked better sales in September. INDONESIA Small/Mid Cap Highlights Waskita Beton Precast (WSBP IJ/NOT RATED/Rp95): Restructuring to a healthy balance sheet. MALAYSIA Sector Plantation: Inventory nearly hits a three-year high on higher imports from Indonesia. Update QL Resources (QLG MK/BUY/RM5.02/Target: RM5.70): With...
- Selvi Ocktaviani
Waskita Karya (WSKT IJ) - New Contracts Up 131% yoy in 7M22; Rp1t Cont...
WSKT’s 7M22 contract achievement doubled yoy. WSKT has been entrusted with two projects worth Rp1t for the new capital city. In 2Q22, WSKT’s revenue grew 63.9% yoy even as it booked operating losses. WSKT will receive Rp3t in state capital injection and is eyeing Rp980b from the rights issue with up to 8.7b new shares. Public investors may face up to 18.6% dilution risk. However, WSKT’s balance sheet will be stronger with DER down to 2.9x. Maintain BUY. Target price: Rp630.
- Jacquelyn Yow Hui Li
- Jo Yee Ng
- Jonathan Koh
- Leow Huey Chuen
- Malaysia Research Team
- Selvi Ocktaviani
- Tham Mun Hon
- Waritthorn Kaewmuang
- Zhifeng Shen
Regional Morning Notes - Tuesday, September 13, 2022
GREATER CHINA Economics Inflation: Easing inflation and margin pressure. Money Supply: August money supply points to continued economic weakness. Sector Consumer: Lack of near-term catalysts; focusing on certainty and high growth potential. INDONESIA Update Waskita Karya (WSKT IJ/BUY/Rp545/Target: Rp630): New contracts up 131% yoy in 7M22; Rp1t contract for new capital city. MALAYSIA Sector Plantation: Malaysia palm oil inventory hit 33-month high on higher production and imports while exports...
- Maskun Ramli
- Selvi Ocktaviani
- Carol Dou Xiao Qin
- Chun Sung Oong
- Jack Goh Tooan Orng
- Jessie Guo Yuting
- Jie Ying Chloe Tan
- Julia Pan Mengyao
- Keith Wee Teck Keong
- Ken Lee
- Llelleythan Tan Tan
- Peerawat Dentananan
- Philip Wong
- Selvi Ocktaviani
- Sunny Chen
- Tanaporn Visaruthaphong
- Vincent Khoo Boo Aik
Regional Morning Notes - Friday, May 27, 2022
GREATER CHINA Sector Automobile: Weekly: The Rmb60b in PV purchase tax cut came in bigger than expected. Maintain OVERWEIGHT. Top picks: BYD, Geely and GWM. Results Alibaba Group (9988 HK/BUY/HK$81.10/Target: HK$126.00): 4QFY22: Earnings beat on higher advertisement monetisation. Focusing on high quality growth going forward. Ali Health (241 HK/HOLD/HK$3.70/Target: HK$4.20): FY22: Adjusted net loss beats estimates; expect FY23 revenue to grow 20% yoy. INDONESIA Update Waskita Karya (WSKT IJ/BUY...
- Selvi Ocktaviani
Waskita Karya (WSKT IJ) - Recovery On Track, Turnaround In 4Q21 Operat...
With ample cash flow, WSKT started to show an improvement in 4Q21 with Rp500b in operating profit, a turnaround from the losses in 3Q21 and 4Q20. WSKT is set to secure a mega overseas project worth Rp20t with double-digit returns. Meanwhile, INA will be taking over two segments of toll roads in Central Java. We expect WSKT to deliver operating profit in 2022 and net profit in 2023. Maintain BUY with a target price of Rp840.
- Maskun Ramli
- Selvi Ocktaviani
- Selvi Ocktaviani
Construction – Recovery And Growth In The Midst Of Inflation And Risin...
Investor withdrawal from IKN funding, risk of inflation and interest rate hikes might become new challenges and concerns for the sector. New contract achievements in 2M22 mostly doubled, signalling that infrastructure projects are starting to resume. Recovery in utilisation rate will translate to a higher burn rate and revenue, but the bottom line might remain depressed. Downgrade to MARKET WEIGHT. Keep WIKA and PTPP as our top picks.
- Maskun Ramli
- Selvi Ocktaviani
- Chun Sung Oong
- Jacquelyn Yow Hui Li
- Julia Pan Mengyao
- Keith Wee Teck Keong
- Ken Lee
- Kwanchai Atiphophai
- Leow Huey Chuen
- Malaysia Research Team
- Selvi Ocktaviani
Regional Morning Notes - Friday, March 11, 2022
GREATER CHINA Sector Automobile: Weekly: Nickel price spike triggers substitution of NCM battery with LFP battery. Maintain OVERWEIGHT. Top picks: BYD, CATL and Ganfeng. Results JD.com (9618 HK/BUY/HK$237.40/Target: HK$339.00): 4Q21: Robust top-line growth; solid guidance despite macro challenges. INDONESIA ASEAN Gems Corporate Highlights Waskita Karya (WSKT IJ/BUY/Rp575/Target: Rp990): Cost overrun goes to owners, INA to buy assets and lower interest rate. MALAYSIA Sector Plantation: Lower pa...
- Selvi Ocktaviani
Waskita Karya (WSKT IJ) - Cost Overun Goes To Owners, INA To Buy Asset...
WSKT started 1M22 with 109% yoy growth in new contracts and 31% yoy growth in average daily toll road traffic. It is trying to improve operational performance and lower its financial charges. WSKT expects Rp10t debt deconsolidation from the asset divestment in 2022, reducing financial charges by around Rp500b. Maintain BUY with a target price of Rp990.
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