I would show you guys the cement industry players data. Cement is a very prospective sector in
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.
Posts
4 comments:
SMGR debt/equity should NOT be so high.
it should be about 3%.
You should relook into your reference.
@XuCloudy..
What I tried to figure in Debt/Equity is total liability divided by total equity (financial leverage).. I might have made a wrong definition.. Thanks for your comment
it should be total DEBT divided by total equities..
Just to say the least, is it not fair to put the dividend payable into this ratio right?
anyway, it is a good comparison by you.
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