Indonesia Daily: Comprehensive Company and Market Analysis

Broker: PT UOB Kay Hian Sekuritas

Date: Thursday, November 7, 2024

United Tractors (UNTR IJ)

Overview

United Tractors, a prominent player in the distribution and leasing of construction machinery, including brands like Komatsu, Nissan, and Scania, has demonstrated a robust performance in the third quarter of 2024. The company also offers mining contracting services and engages in the coal mining business with an annual coal sales volume of 7 million tonnes.

Financial Performance

In 3Q24, United Tractors reported an impressive net profit after tax (NPAT) of Rp6,059 billion, marking a 46.6% year-on-year (yoy) increase and a 21.6% quarter-on-quarter (qoq) rise. This strong performance was primarily driven by the gold division, whose earnings before interest and taxes (EBIT) surged by 276.1% yoy. The average gold price in 3Q24 was US\$2,475 per troy ounce compared to US\$1,929 per troy ounce in 3Q23.

Segmental Analysis

• Gold Mining: The gold mining division’s profit before tax (PBT) soared by 276% yoy, driven by favorable gold prices and increased sales volume.
• Construction Machinery: Despite a 3.8% decline in unit sales, the EBIT for the Komatsu division rose by 83.2% yoy due to large equipment sales.
• Coal Mining: The coal mining division recovered from a loss of Rp155 billion in 3Q23 to a profit of Rp1,292 billion in 3Q24.
• Construction: The construction segment faced challenges, with a 52.5% yoy increase in losses in 3Q24.
• Energy: The energy division experienced a decline in PBT by 50.7% in 9M24 compared to 9M23.

Key Financials

United Tractors has experienced steady growth in its key financial metrics over the past few years. The company’s net turnover is projected to rise from Rp128,583 billion in 2023 to Rp152,399 billion in 2026. Similarly, EBITDA is expected to grow from Rp36,281 billion in 2023 to Rp38,182 billion in 2026. Despite these positive trends, the company faces challenges, including fluctuations in gold and coal prices, which could impact its profitability in the future.

Investment Recommendation

Given the strong performance in the gold mining division and higher-than-expected earnings in 3Q24, we have upgraded United Tractors to a HOLD recommendation with a target price of Rp30,000, offering a 10.3% upside from the current share price.

Charoen Pokphand Indonesia (CPIN IJ)

Overview

Charoen Pokphand Indonesia, a key player in the poultry feed and processed food industry, has shown promising technical indicators, suggesting a potential for price appreciation in the near future.

Technical Analysis

The share price closed with strong gains, forming a long-body bullish candlestick. The price gained with higher trading volume and better momentum, indicating bullish pressure. The resistance levels are identified at Rp5,150 and Rp5,300, with support at Rp4,850 and Rp4,760. The Relative Strength Index (RSI) is sloping upwards, back above its center line, while the Moving Average Convergence Divergence (MACD) remains on a bearish crossover.

Investment Recommendation

We recommend a technical BUY for Charoen Pokphand Indonesia with a 5% potential return. Investors are advised to buy at Rp5,050 and take profit at Rp5,300, with a stop-loss at Rp4,950. The approximate timeframe for this investment is 2-4 weeks.

Amman Mineral Internasional (AMMN IJ)

Overview

Amman Mineral Internasional, a significant player in the mining sector, has shown positive technical indicators, suggesting potential for further price appreciation.

Technical Analysis

The share price closed on a positive note, forming a bullish candlestick. The price rebounded from its support level at Rp8,700, indicating potential upside pressure. The resistance levels are identified at Rp9,575 and Rp10,050, with support at Rp8,950 and Rp8,700. The RSI is sloping upwards, approaching its center line, while the MACD is relatively flat.

Investment Recommendation

We recommend a technical BUY for Amman Mineral Internasional with a 4.5% potential return. Investors are advised to buy at Rp9,175 and take profit at Rp9,575, with a stop-loss at Rp8,900. The approximate timeframe for this investment is 2-4 weeks.

Market Overview

Regional Market Performance

The regional markets showed mixed performance on November 7, 2024. The MSCI Indonesia index closed at 7,189.0, down by 1.9%, while the MSCI Asia-Ex Japan index declined by 0.9% to 736.2. The KLCI index rose by 0.8% to 1,634.2, and the FSSTI index increased by 0.6% to 3,603.0. The SET index fell by 1.0% to 1,467.4, and the Hang Seng index dropped by 2.3% to 20,538.4. The Nikkei index surged by 2.5% to 39,480.7, and the Shanghai Composite index was relatively flat, down by 0.1% to 3,383.8. The Dow Jones index saw a significant gain of 3.4%, closing at 43,729.9.

Indonesia Stock Exchange Performance

On the Indonesia Stock Exchange, the IDX Composite Index dropped by 1.4% to 7,383.9, while the LQ-45 index declined by 2.0% to 901.4. The total trading value was US\$757.5 million, with foreign trade contributing to a net sell of US\$72.5 million.

Top Trading Turnover

• Bank Rakyat Indonesia: Rp4,600, down 2.3%
• Bank Mandiri: Rp6,550, down 5.4%
• Adaro Energy: Rp4,010, down 0.7%
• Bumi Resources Minerals: Rp440, up 6.8%
• Bank Central Asia: Rp10,450, down 0.5%

Top Gainers

• MD Pictures: Rp3,550, up 12.7%
• Bumi Resources Minerals: Rp440, up 6.8%
• Charoen Pokphand: Rp5,075, up 3.6%
• Mitra Keluarga Karyasehat: Rp2,730, up 2.2%
• Amman Mineral: Rp9,200, up 2.2%

Top Losers

• DCI Indonesia: Rp40,000, down 9.1%
• Bank Jago: Rp2,560, down 6.6%
• Indosat: Rp2,250, down 5.9%
• Mitra Adiperkasa: Rp1,465, down 5.8%
• Map Aktif Adiperkasa: Rp995, down 5.7%

Commodity Trends

• Forex (Rp/US\$): 15,833, up 0.5%
• Crude Oil NYMEX (US\$/bbl): 71.69, down 0.4%
• Coal Fut Newc (US\$/tonne): 141.10, down 1.3%
• Nickel 3M LME: 16,123, no change
• Tin 3M LME: 32,349, no change
• Gold SPOT (US\$/oz): 2,720, down 0.6%
• CPO Fut Msia (MYR/tonne): 4,999, up 1.7%