IndoEkuitas

Summarecon Agung (SMRA), Overweight !

2011-01-26T20:33:00.004+07:00

Indonesian stock market started the year of 2011 with some inflationary risk concern which forced the index to slump almost 10%. Major sector with interest rate sensitive like banking, property, automobile plummet.

I personally agree that the downside risk would be significantly contributed by inflationary threat. This condition will push investors to shift their portfolio into commodity related stocks. Like we have seen recently, SMRA also hit by this condition with -15% ytd based on today closing price. I will show you some numbers about SMRA. While we are waiting for the FY 2010 report, it would be relatively profitable trade for you who are optimistic about this stock since it has been extremely undervalued these days.

(Click to enlarge)

Based on the Income statement summary, we could see that SMRA's revenue is growing consistently and the growth relatively exponential. The annualized EPS in 3Q 2010 is much higher than the previous quarters. With this result, we could assume that the 4Q result would also grow.

(Click to enlarge)

The ROE also significantly grow each quarter. With the growth of the asset faster than the equity which has been shown, we could assume that SMRA is extremely in its aggressive expansion. If the condition of the economy conducive, this aggressive expansion will be transformed into cash flow.

With those assumptions and another assumption that the growth of SMRA is 10% based on its 3Q EPS and 3Q Book Value (BV), I proposed this valuation guide:

VALUATION	10% growth
PE 20 X	978.57
PE 25 X	1223.22
BV 3 X	1064.49
BV 3.5 X	1241.90

From this valuation, the fair value of SMRA at the end of the year should be in the range of 980 - 1250.

BUMI Resources, Maintain Buy

2010-10-12T20:34:00.004+07:00

The JCI has been performing as the best market in the world this year, with ytd return of 40%. Some of the blue chip stocks has been continually making a new record high. One of the laggard is BUMI. As we all know, BUMI management always make some maneuver that for some investors is so hard to understand. That makes BUMI performance ytd is -5%.

The plan to divest its subsidiary Bumi Resources Mineral into an ipo this year will become a trigger to its stock price movement. Me personally still put some confidence in the future of this stock, the recent right issue to convert some of its debt into stock also could be seen as a positive signal for the future cash flow.

The transaction of this conversion was in the price of Rp 2,375, hence with the price of BUMI today of 2,300 per share should be seen as a discount.

In the beginning of 2010, I estimated the price of BUMI would be 4,000 at the end 0f 2010. I think we have to revise it target price based on current condition. I put 3,300 as the ideal target price for BUMI at the end of 2010. I noticed that lately foreign investors are accumulating this stock, hence I am expecting that when the JCI loose its momentum to go high further, investors will shift their portfolio to BUMI. We will see whether my guess will become a reality.

Infrastructure is on Fire..

2010-04-10T22:22:00.003+07:00

I believe 2010 would be the year for Infrastructure sector to get back on fire. The FY 2009 results for some infrastructure related stocks that I cover were excellent. JSMR net income has grown about 40% year on year, WIKA has grown its net income about 25%. ADHI net income is more fantastic grew about 100%.

Over the last 6 months, the infrastructure sector has been lagging the overall market. If you look at this chart, obviously the last couple of days, ADHI, WIKA, and JSMR have started to chase the Jakarta Composite Index (JCI). I believe this is just the beginning and there is still more potential upside for those stocks.

(Source: Bloomberg.Com)

From valuation point of view, those stocks are also still very cheap. Based on their FY 2009 EPS, I made some projection for their FY 2010 earnings with either 20% or 30% growth.

	FY 2009	GROWTH
		20%	30%
		2010F	2010F
ADHI	94.2	113.04	122.46
JSMR	146.5	175.8	190.45
WIKA	33.7	40.44	43.81

Based on the data, the ideal price for 2010 would be:

	PE 10x		PE 12x
	20%	30%	20%	30%
ADHI	1130.4	1224.6	1356.48	1469.52
JSMR	1758	1904.5	2109.6	2285.4
WIKA	404.4	438.1	485.28	525.72

Hence, I would recommend you guys to accumulate these infrastructure related stocks.

JCI: a Record High

2010-04-09T19:54:00.003+07:00

the Jakarta Composite Index (JCI) has been rallying since mid February 2010 to reach a new record high in its history at around 2900. The foreign investors are the major buyer with total fresh fund inflow more than 3 trillion rupiah for the 1Q 2010.

In the last few days, the market has some correction. I believe this is just a normal correction, while the overall trend is still bullish.

(Source Dongsuh Securities, edited)

If the JCI could maintain its first uptrend support, the JCI would continue the rally again in the next few days. But I prefer to choose the second possibility. The JCI might not be able to maintain its first uptrend support, hence it would retrace to around 2730 (38.2% fibonacci retracement). Hence, if this is the case, I suggest to take some profit and wait until JCI reach 2730 that might be happen in about a 2-3 weeks, and then get along with the bull again.

JCI: Wacth out of a correction

2010-03-11T23:13:00.002+07:00

In the last few days, the JCI has gained significantly. Since the breakthrough of the ascending triangle pattern it has gained about 4%. The yield to date per today close is 5.61%.

If you look at the chart, you could see that JCI has a very good volume that confirmed the bullishness. I also notice that some foreign brokers are still accumulating Indonesian blue chip stocks.

(Source: Dongsuh Securities, edited. Click to enlarge)

While in the medium and long term I am still positively bullish on the market, it would be wise to take some profit in the near term. I am afraid that traders would take some significant profit in the coming days, based on the technical chart. If you see the ascending triangle pattern, the highest level might has been reached according to the tip of the point in the triangle. That’s the common rule in triangle pattern.

I also noted that there is a 50% chance that the JCI would form a “double top” pattern which is usually a bearish sign for traders. If it is the case, JCI could retrace to 2600 level. Hence, I think it would be wise to take some profit. Personally, I set 75%-80% as the target equity holding in my portfolio and 20%-25% as cash. If the JCI does retrace, I am expecting the JCI to reach a new high before the first semester of 2010.

Sampoerna Agro SGRO, Buy TP 3250

2010-02-05T21:13:00.003+07:00

Bloomberg Code: SGRO:IJ
Reuters Code: SGRO.JK

I would like to discuss Sampoerna Agro (SGRO). I like this stock and I believe it would grow at least 20% this year. I would show you the fundamental data and I also would show you some technical perspective.

Fundamental Data

(click to enlarge)

I made a projection for full year 2009 which is shown on the above table. I noticed that the revenue growth on 3Q-2009 and 2Q-2009 mostly due to the substantial increased in CPO prices. I believe this price trend would be appropriate to be included in the full year 2010 projection.

I also believe that the 2010 net margin would be similar to the current margin, with tendency to increased.

Based on my assumption and projection, I derived the ideal price for full year 2010 with appropriate PE multiplier of 11x-12x.

Expected Price	FY 2010F
PE 11 x	3005.92
PE 12 x	3279.19

This price target I believe would be reached by the end 2010.

Technical Point of View

I also like SGRO because it has retraced about 38.20% since its long rally which is started in September 2009 with initial level 1950 and has reached the highest level at 3075. The 38.20% Fibonacci retracement should be at 2645. This stock has reached 2675 today and closed at 2700. If in the next few days the stock could maintain its support around 2650-2675, I believe this stock would bounce back and might continue the long rally to reach a new high.

Based on my short analysis, I would recommend a "BUY" for SGRO with TP 3250

Target for 2010

2010-01-06T23:15:00.002+07:00

The market starts the trading day in 2010 with confidence and full of optimism. You guys might have your personal target for Jakarta Composite Index (JCI) this year. (Please join the poll at the bottom of my blog). Me personally, set 2950 – 3000 as the target for this year or around 15% - 20% return for full year 2010.

The commodity sector I believe would be the main index mover at the beginning of the year, with BUMI as my favorite stock in this sector. I set the TP for BUMI at 4000. The plan to double its production in 2012 would be the main factor to the price movement.

The other stock that I like from Bakrie group is ELTY. The Book Value of ELTY today is around 213. If ELTY could grow about 20% this year, its book value is expected to be at 250. With P/BV ratio of 2, I am expecting ELTY to reach 500 at the end of 2010 or more than 100% gain.

I also still like cement sector with SMGR as my top pick. I am expecting SMGR to grow 20% - 30% this year. With this projection of growth, I am expecting SMGR to reach 9000 – 10000 level this year. Since 2005, SMGR has been successful in growing its book value 20% every year. Hence, I believe it is not a difficult task for SMGR to repeat its growth story.

In banking sector, I would overweight BBRI. I am expecting BBRI to grow 15% - 25% this year. The yoy inflation rate in December 2009 at 2.78% is very likely to boost the credit consumption. The TP that I set for BBRI is at 9200.

Here is the summary of the target price of the index and some stocks that I picked:

	Price 2009	Target Price	Potential Gain
JCI	2534	3000	18.39%
BUMI	2425	4000	64.95%
ELTY	193	500	159.07%
SMGR	7550	10000	32.45%
BBRI	7650	9200	20.26%

ELTY 61.8% Retracement, TP: 225

2009-12-23T01:01:00.005+07:00

Bloomberg Code: ELTY:IJ
Reuters Code: ELTY.JK

I would like to discuss ELTY from technical point of view. In my observation, ELTY start the long rally at 55 level and reached the highest level at 390. In the last few months ELTY has been decreasing substantially due to its group (Bakrie) right issue for some of its subsidiaries. The Dubai crisis also has triggered this stock to go down further.

I would show you some chart to get some ideas to buy this stock with fibonacci retracement approach. With its rally from 55 to 390, the 61.80% retracement is around 183 level. If in the next few days the stock shows some strong support around 183, I would recommend a speculative buy for this stock.

(Source: Dongsuh Securities)

BUMI has rebounded more than 8% today. I am expecting that the other Bakrie stocks would follow BUMI to rebound. I would set 222.5 level as the first target (50% retracement), with potential gain about 20%.

Here is the complete retracement level:

23.60%	310.94
38.20%	262.03
50%	222.5
61.80%	182.97
100%	55

BUMI is Lagging the market

2009-12-12T21:36:00.004+07:00

Over the last 3 months BUMI has been lagging the overall market. This condition, I believe due to the management way of handling the debt. My previous price target of BUMI was 4000 at the end of 2009. It is very little chance for BUMI to reach that target. Even though BUMI would not be able to reach 4000 this year, I still optimistic that BUMI would pass that target next year.

I would show you some charts, showing the relative performance of BUMI against the other stocks. The first chart would show you the performance of BUMI against other coal stocks over the last 3 months.

(Source: Bloomberg, click to enlarge)

As you can see, BUMI performance is -17% (green line) and the mining index is close to 0 (yellow line) PTBA and ADRO both are performing so nice up more than 25% (red and yellow lines)

On the second chart you could see that compare to other large cap stocks, BUMI has been lagging these other large caps. BBRI (green line), ASII (yellow line), and SMGR (orange line) are performing positively.

(Source: Bloomberg, click to enlarge)

The future performance of BUMI would heavily influenced by the 3Q result which will be published the end of the year. If the result is good, I believe BUMI would go beyond 3000 level.

While the Jakarta Composite Index has reached 2500, it would not go to 2600 if BUMI which is heavily weighted the index still lag the market behind. I am expecting BUMI to reach 2800 at the end of the year, so that the JCI rally would continue.

Tunas Ridean (TURI) is attractive

2009-11-23T22:29:00.001+07:00

Bloomberg Code: TURI:IJ
Reuters Code: TURI.JK

PT. Tunas Ridean (TURI) operates automobile dealerships that sell new and used motor vehicles, spare parts and accessories as well as provide after sales services. The company also provides operating lease and consumer financing services.

As a cyclical stock, TURI could be considered as one of the stock that you have to hold in your portfolio these days. The automobile industry is still growing in Indonesia which has large domestic based demand. The improvement in the global economy recently would also contribute some significant portion in TURI’s next quarter sales. While we are approaching the end of the year, I projected the demand of vehicles would be significantly higher in the coming months.

The 3Q-2009 sales has growth more than 30% q/q. I projected that TURI would grow it sales at least 15% in the next quarter. I will show you my projection:

TURI 4Q-2009 EPS PROJECTION

(in Mio RP)	4Q-2009F	3Q-2009	2Q-2009	1Q-2009
Sales	1,631,344.00	1,418,560.00	1,077,900.00	1,045,830.00
Opr Income	32,626.88	27,769.00	16,388.00	7,526.00
Opr Margin	2%	1.96%	1.52%	0.72%
Net Income	60,359.73	51,072.00	42,755.00	140,283.00
Net Margin	3.70%	3.60%	3.97%	13.41%
Total Share	1395	1395	1395	1395
EPS	43.27	36.61	30.65	100.56
Ann EPS	173.07	146.44	122.59	402.25

With the projected annualized EPS of 173.07, I derived the ideal price of TURI at the end of 2009. I believe the ideal PE multiplier would be in the range of 10 – 12x.

TURI EXPECTED PRICE

Expected Price	4Q-09F
PE 10 x	1730.74
PE 12 x	2076.89

INTP: The Growth is real

2009-11-07T22:45:00.007+07:00

The cement industry is growing still. My favorite stock in this industry is Indocement (INTP). If you guys have been following me, on my last post I showed you guys the fib retracement as a tool to buy this stock(Here: http://indoekuitas.blogspot.com/2009/10/get-ready-to-ride-bull.html ) On that post, I recommended the 23.6% retracement as the level to buy this stock at 10.400. This week INTP closed at 11.800, so you guys might have made about 13%.

I'll show you guys the q/q result of INTP.

Even though the sales were not growing that fast, INTP capable of making consistent growth on its EPS. I believe on the 4th quarter the revenue would grow faster and would reflected on its EPS.

The 3Q-09 q/q earning is growing although only 3.9%, while the 2Q-09 was growing 33% q/q.

Get Ready to Ride the Bull..!!

2009-10-22T21:54:00.006+07:00

In the last few days, the stocks have been in a pullback situation. Fund managers and major investors are taking some profit in the Indonesian market which has been the best performer this year. For me, as an optimistic and a very bullish trader, I see these days are the best time to enter the market.

I would show you guys some perspectives and ideas to time the market from technical point of view.

BMRI Daily Chart
(Source: Dongsuh Securities, edited)

The chart above is the Bank Mandiri (BMRI) candle stick. The chart shows that BMRI has been pushed down beyond the major moving average line (the red MA line). It could be seen as a sign that BMRI is entering a bearish situation. I tried to figure the fibonacci retracement from BMRI chart to get an ideal price to buy this stock. The March 2009 was the initial long rally, with initial price of 1750. The highest level was 5300. The 23.6% retracement for me is an ideal price to get in. The price of 23.6% retracement is around 4462.

INTP Daily Chart
(Source: Dongsuh Securities, edited)

This is another chart of Indocement (INTP). The rally was started on March 2009 with initial price of 4250. The highest level was around 12300. The 23.6% Fib retracement is 10400, which is an ideal level to buy this stock.

The best price level to buy those stocks are unique for every investor since every investor has his own risk-aversion or risk-taking level. For an aggressive investors, 23.6% might be the best level but for moderate investors 38.2% or 50% might be the ideal level.

Here is the summary of the retracement level for BMRI, INTP and SMGR.

Fibonacci	BMRI	INTP	SMGR
Retracement
23.60%	4462	10400	6174
38.20%	3944	9225	5663
50.00%	3525	8275	5250
61.80%	3106	7325	4837
100.00%	1750	4250	3500

UNSP is Undervalued

2009-10-22T00:41:00.005+07:00

Reuters Code : UNSP.JK

President SBY just announced the ministers for the period of 2009-2014. I noticed that the economic coordinator minister, Hatta Radjasa might be the weakest person in the economic team. Lets look at the market reaction tomorrow...

By the way, the oil price has reached a new high today at around $81 per barrel. I believe with the upward move in the oil would influence other commodity prices such as crude palm oil (CPO). If you guys are following me, I wrote in my comment here: http://deroncapital.files.wordpress.com/2009/09/factsheet-sep-092.gif
On that comment, I have predicted that CPO price tend to be higher in the coming months. In early October I bought SGRO stock to overweight the plantation sector in my portfolio which had gained almost 20% before I sold it. You guys could check my portfolio here : http://deroncapital.wordpress.com/
SGRO, AALI and LSIP are outperforming the market month to date. UNSP is lagging the market. I believe UNSP would rise in the near to medium term to catch the other plantation stocks.

The 2Q-2009 UNSP financial report showed some sign of improvement, even though the market still think that UNSP is a risky kind of stock which is reflected on its stock price, with P/BV below 1.5 x. If you check the financial statement, obviously the profit were resulted in the April-June period. From here, I concluded that the trend is improving.

(Source : Dongsuh Securities, edited)

The thing that we should be aware of is the BV per share of UNSP is significantly lower than three months ago due to the increasing in the diluted weighted average share. I am expecting that when the CPO price increasing significantly, UNSP management would be able to buy back some of its stock in the market hence the outstanding share would be reduced.

I believe the ideal P/BV ratio of UNSP should be around 1.7-1.8 x, given its strong growth potential. I derived the ideal price of UNSP based on its ideal P/BV :

P/BV	Expected Price
1.7	961.32
1.8	1017.87

October: Continue Rally or Pullback ?

2009-10-02T20:30:00.006+07:00

We are entering the 4th quarter in lack of confident. The JCI was opened in red but it managed to close in slightly positive, up only 0.08%. The unemployment report in the US showed a new record low since 1983 with 9.8% unemployment rate.

In my observation, I noticed that there were some re-balancing portfolio activities in the market lately. Fund managers and foreign investors are tend to shift their portfolio into a lower beta stocks. It could be seen as a sign that the market might be in a higher volatility in a near term. Investors are trying to enhance their portfolio so that their portfolio risk would be lower.

With this risk aversion condition, I am expecting the market in a ranging trade with tendency to go down a little bit in this month of October.

(Source: Dongsuh Securities, edited)

The trading range would be in 2400 - 2500 level or if the market go down further beyond the 2400 level support it would test the 2300 level.

You could check my portfolio here : http://deroncapital.wordpress.com/

Wijaya Karya, buy TP : 380

2009-09-11T19:28:00.004+07:00

Bloomberg Code: WIKA:IJ
Reuters Code : WIKA.JK

Wijaya Karya (WIKA) is one of the major players in construction business. Compare to ADHI and TOTL, WIKA has more stable and consistent growth in this weak economic condition. Its sales has been growing significantly since 2005. In 2009 I projected a little contraction in its revenue but I am confident that in 2010 WIKA would start its consistent growth again. I would show you the data :

WIKA shows that it is capable in make its business more efficient. The ROE is consistently growing each year. In 2009, even though I projected some negative growth in its revenue WIKA still capable in making some growth in its forecasted 2009 earning.
Its current PE ratio is 10.64 and its P/BV is 1.40 (per 11 September 2009). I believe these multiplier are too low for its potential business growth. I projected its PE ratio would be at least 12 x.

I also made some projection using a Discounted Cash Flow model (DCF) using growth factor 15.25% and required return 19%. The output from this model is the ideal today price of WIKA which is 377.

With today price of 350, I recommend a "BUY" for WIKA.

Cement Industry Analysis

2009-08-20T20:36:00.004+07:00

I would show you guys the cement industry players data. Cement is a very prospective sector in Indonesia. There are three major players which are Semen Gresik (SMGR), Indocement (INTP), and Holcim (SMCB). I would start it with trend analysis.

Trend Analysis
The economic crisis is influencing this sector growth as well as other sectors, even though the effect is not that bad. I predicted that in 2010 the industry will grow faster than today.

SMGR is leading the industry with market share 48.61% followed by INTP and SMCB with 34.45% and 16.94% respectively. Table below is the detail:

	2Q-2009	2008	2007	2006	2005
Indocement	34.45%	36.50%	35.42%	35.05%	34.64%
Holcim	16.94%	17.93%	18.16%	16.59%	18.69%
Gresik	48.61%	45.57%	46.43%	48.37%	46.66%
Total	100.00%	100.00%	100.00%	100.00%	100.00%

Company Data

INDOCEMENT (INTP)	2Q-2009	2008	2007
Total Asset (Mio IDR)	11,262,900.00	11,286,700.00	10,037,900.00
Book Value (Mio IDR)	9,118,740.00	8,500,190.00	6,893,500.00
Net Cash Flow (Mio IDR)	346,670.00	482,382.00	264,372.00
CAPEX (Mio IDR)	-57,299.00	-233,286.00	250,110.00

Sales (Mio IDR)	4,795,490.00	9,780,500.00	7,323,640.00
Operating Income	1,628,441.00	2,459,870.00	1,593,420.00
Net Income	1,172,471.60	1,745,500.00	980,103.00
Dividend	552,184.80	147,249.00	110,437.00
Total Share	3,681.23	3,681.23	3,681.23

Profitability
ROE	12.86%	20.53%	14.22%
ROA	10.41%	15.47%	9.76%
Operating Profit Margin	33.96%	25.15%	21.76%
Net Profit Margin	24.45%	17.85%	13.38%

Financial Risk
Debt / Equity	23.51%	32.78%	45.61%

Valuation
BV per share	2477.09	2309.06	1872.61
EPS	318.50	474.16	266.24
Sales per share	1302.69	2656.86	1989.45
Cash Flow per share	94.17	131.04	71.82
DPS	150.00	40.00	30.00

HOLCIM (SMCB)	2Q-2009	2008	2007
Total Asset (Mio IDR)	7,121,705.00	7,674,980.00	7,208,250.00
Book Value (Mio IDR)	2,817,925.00	2,537,926.00	2,257,357.00
Net Cash Flow (Mio IDR)	-308,086.00	171,068.00	394,510.00
CAPEX (Mio IDR)	-33,859.00	-176,723.00	-165,810.00

Sales (Mio IDR)	2,357,731.00	4,803,377.00	3,754,906.00
Operating Income	497,876.00	926,277.00	536,260.00
Net Income	279,999.00	282,220.00	169,410.00
Dividend	0.00	0.00	0.00
Total Share	7,662.90	7,662.90	7,662.90

Profitability
ROE	9.94%	11.12%	7.50%
ROA	3.93%	3.68%	2.35%
Operating Profit Margin	21.12%	19.28%	14.28%
Net Profit Margin	11.88%	5.88%	4.51%

Financial Risk
Debt / Equity	152.73%	202.41%	219.32%

Valuation
BV per share	367.74	331.20	294.58
EPS	36.54	36.83	22.11
Sales per share	307.68	626.84	490.01
Cash Flow per share	-40.20	22.32	51.48
DPS	0	0	0

SEMEN GRESIK (SMGR)	2Q-2009	2008	2007
Total Asset (Mio IDR)	11,991,449.00	10,602,964.00	8,515,227.00
Book Value (Mio IDR)	8,317,759.50	8,069,586.00	6,627,262.50
Net Cash Flow (Mio IDR)	229,750.00	924,404.00	1,078,690.00
CAPEX (Mio IDR)	-385,739.80	-561,764.00	-322,645.00

Sales (Mio IDR)	6,767,275.80	12,209,846.00	9,600,801.00
Operating Income	1,914,283.70	3,387,185.80	2,396,848.20
Net Income	1,513,599.90	2,523,544.50	1,775,408.40
Dividend	1,261,764.00	887,711.30	647,760.20
Total Share	5,863.58	5,922.18	5,931.52

Profitability
ROE	18.20%	31.27%	26.79%
ROA	12.62%	23.80%	20.85%
Operating Profit Margin	28.29%	27.74%	24.97%
Net Profit Margin	22.37%	20.67%	18.49%

Financial Risk
Debt / Equity	44.17%	31.39%	28.49%

Valuation
BV per share	1418.55	1362.60	1117.30
EPS	258.14	426.12	299.32
Sales per share	1154.12	2061.71	1618.61
Cash Flow per share	39.18	156.09	181.86
DPS	215.19	149.90	109.21

From the data above, I prefer to invest in SMGR and INTP since both companies obviously could make some significant profit. SMGR’s ROE are always grows, in 2007 it was 24.97%, in 2008 was 31.27% and for 2Q-2009 its ROE was 18.2% or equal to 36.4% annually.

INTP also managed to grow its ROE which are 14.22% in 2007, 20.53% in 2008 and 12.86% in 2Q 2009 (or equal to 25% annually).

INTP is preferable if we look at the Debt to Equity ratio, which continually decreased. SMGR growth in Debt / Equity might be due to its expansionary plan in the future, which is going to build some new plants.

Valuation

Based on the data, here is the projected EPS and current Book Value per share:

Forecasted next year EPS
SMGR	567.9
INTP	727.76
SMCB	46.94

Current BV per share
SMGR	1418.55
INTP	2477.09
SMCB	367.73

with today 20 August 2009 closing price, here is the ratio:

Ratio	P / BV	Forward P / E
SMGR	4.16	10.39
INTP	3.88	13.19
SMCB	3.59	28.12

I think the SMGR and INTP are still very undervalue given their strong future growth. I believe PE ratio for SMGR should be around 12x and INTP around 15x.

JSMR : Overweight, Target : 1980

2009-08-12T20:47:00.004+07:00

Bloomberg Code : JSMR:IJ
Reuters Code : JSMR.JK

Jasa Marga ( JSMR ) would increase its toll roads fees on August 31, 2009. The percentage of the increased would be around 15% and would be applied to Jagorawi, Jakarta - Tangerang, Jakarta inner road, Pondok Aren - Ulujami, Padalarang - Cileunyi, Cipularnag, Palimanan - Kanci, Belmera - Medan, Semarang, Surabaya - Gempol and Jakarta outer ring road. (Source: TV One 12 Agustus). Based on this plan, if it is approved by the government, the ideal price for JSMR stock would be in the range of 1840 - 1980. Here is my projection:

(in Mio RP)	2Q-09	1Q-09	2008	2007	2006
Sales	861,889.00	820,551.00	3,319,340.00	2,617,710.00	2,270,450.00
Operating Income	321,256.00	367,735.00	1,371,620.00	1,015,950.00	819,453.00
Operating Margin	37.27%	44.82%	41.32%	38.81%	36.09%
Net Income	199,119.00	196,540.00	707,798.00	277,982.00	462,567.00
Net Margin	23.10%	23.95%	21.32%	10.62%	20.37%
Total Share	6,780.84	6,780.84
EPS	29.36	28.98
Annualized EPS	117.46	115.94

Based on its historical data, its net margin is around 22.5%. I applied this margin to forecast its 3Q and 4Q 2009. Here is the projection:

(in Mio RP)	4Q-09F	3Q-09F
Sales	991,172.35	904,983.45
Operating Income	366,733.77	334,843.88
Operating Margin	37.00%	37.00%
Net Income	223,013.78	203,621.28
Net Margin	22.50%	22.50%
Total Share	6,780.84	6,780.84
EPS	32.89	30.03
Annualized EPS	131.56	120.12

I applied the P/E multiplier to its Annualized EPS. Based on its strategic business and its long term growth potential, I believe the appropriate P/E would be at least 14 x - 15 x.

Expected Price	4Q-09F	3Q-09F	2Q-09	1Q-09
PE 14 x	1841.77	1681.62	1644.44	1623.14
PE 15 x	1973.33	1801.73	1761.90	1739.08

JCI is Approaching 2400 Level

2009-08-07T19:02:00.004+07:00

It is not because today is a nice day to write a blog, since today is 07/08/09. The reason I post some words today is that the Jakarta Composite Index (JCI) is approaching the important 2400 level. Why I think this level is a crucial level is because in July 2007 the JCI had failed to pass this level. In August 2007, about 3 weeks after that failure, the JCI was able to start a huge rally that took it to a historical record high at 2800. On that failure, the JCI was having a retracement that last about 3 weeks. The retracement was around 61.8%, since its rally during March 2007 until July 2007.

Today, the JCI closed at 2349, 50 points away from this important level. Current rally, which was started on March 2009 has given the JCI 80% return. If you look at the trend line obviously you could see that this rally accelerating very fast. 80% gain in just 5 months.

While we are waiting for some unemployment data from the US tonight, I think it would be wise to get some cash aside and wait for this important economic data result. In the near term, I am expecting some retracement for some weeks. If the JCI could pass the 2400, I believe the JCI is possible in reaching a new historical high.

Medco ( MEDC ) ready to soar

2009-08-05T00:11:00.006+07:00

Reuters Code: MEDC.JK
Bloomberg Code: MEDC:IJ

Medco Energy shows some hope of recovery. Its 2Q revenue is improving compare to 1Q 09. Even though its revenue has decreased 59.2% yoy, and its net income decreased 84.9% yoy, I believe Medco would be doing much better in 3Q and 4Q

(In million USD)

	4Q-09F	3Q-09F	2Q-09	1Q-09	4Q-08	3Q-08	2Q-08
Revenue	357.65	342.1	311	134.9	340.6	183.4	401
Operating Income	71.53	51.315	31.4	24.1	30.1	82	103
Net Income	42.918	27.368	9.6	7.6	-12.4	229.2	40.7
Operating Margin	20%	15%	10.10%	17.87%	8.84%	44.71%	25.69%
Net Margin	12%	8%	3.09%	5.63%	-3.64%	124.97%	10.15%
Total Shares	3077.46	3077.46	3077.46	3077.46	3096.75	2841.62	3108.85
EPS	0.01395	0.00889	0.00311	0.00247	-0.004	0.080658	0.013092

Based on the trend of IDR appreciating against the USD, I projected that in 3Q and 4Q the USD / IDR rate would be respectively 9800 and 9600.

	4Q-09F	3Q-09F
USD/IDR Rate	9600	9800
	133.88	87.15
Annualized EPS	535.52	348.61

Based on my projection for 3Q and 4Q 2009, I derived the ideal price for Medco stock.

	4Q-09F	3Q-09F
PE 8x	4284	2789
PE 10x	5355	3486
PE 12X	6426	4183

JCI, continuing rally or further correction ?

2009-06-23T19:18:00.004+07:00

In the last 10 days, the Jakarta Composite Index (JCI) has significant pullback. The pull back in the commodities and the statement from the world bank which said that the global economy would shrink 2.9% in 2009, worse than its previous March forecast for 1.7% decline, are the main factors behind this pullback. While investors and traders are still in risk aversion state, I expect that the JCI would continue its rally in a few days ahead. I have some data that I would show you to support my opinion based on technical perspective.

(Source: Dongsuh Securities, edited)

This chart shows the "Fibonacci" retracement. The 23.6% Fibonacci retracement is arround 1910 level. This level could be seen as a strong support since its rally from 1245 level to its highest level at 2116. Today JCI has managed to closed slightly above this important support at 1914. I assumed that the market is ready to make a new rally in the coming days. I also have some data from some stocks that I covered. These stocks also has managed to closed arround its Fibonacci retracement level:

Fibonacci	BUMI	ADRO	JSMR	SMGR	LSIP
Retracement
23.60%	1946.22	1280.08	1525.24	4845.7	6308.8
38.20%	1711.89	1174.96	1392.38	4564.65	5695.6
50.00%	1522.5	1090	1285	4337.5	5200
61.80%	1333.11	1005.04	1177.62	4110.35	4704.4
100.00%	720	730	830	3375	3100

BUMI closed at 1660, slightly below its 38.2% Fibonacci retracement. ADRO closed at 1080, very close to its 50% retracement level. JSMR today has closed at 1490, slightly below its 23.6%. It could go further to 1392.38 or bounce back to continue the rally. SMGR is closed in green. On Friday 19 June 2009, SMGR managed to bounce back above its 50% level and continue the rally. LSIP has touched its 50% retracement level today (low of the day) but managed to close higher at 5500.

Based on this data, I expect JCI to continue the rally. ADRO, LSIP, SMGR and JSMR are likely to continue the rally along with the JCI while BUMI is in a neutral position.