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雷达卡
We assume coverage of the Indonesian cement sector with
OUTPERFORM ratings on Semen Gresik and Indocement, and a
NEUTRAL rating on Holcim Indonesia. Indonesian cement stocks
command higher returns and earnings growth, although the stocks
trade at a 15% discount to average global P/E and EV/EBITDA multiples.
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Given the economic slowdown and financial liquidity (though
improving) in 2009, we expect 2009 domestic cement consumption to
contract by 2% YoY, with a YoY recovery expected in 2H09. With the
macro outlook improving (falling interest rates and rising consumer
confidence) and the implementation of the government’s stimulus
package, we expect Indonesian cement demand to rebound at a CAGR
of 7.4% over 2010-11.
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Selling prices are likely to soften, with the slowdown in cement
consumption in 2009 and Indocement’s (the price leader) market share
dipping below its 30% threshold. However, thanks to declining energy
prices (around 40-42% of total costs), we expect cement companies to
maintain or even improve their profitability. We expect no significant
drop in prices, given the oligopolistic nature of the market.
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Short-term data tend to put pressure on share prices, although we
believe this could provide a buying opportunity. We expect a recovery
in cement consumption in May-June and lower energy costs start to
affect earnings from 3Q09 onwards.
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Indocement is our top pick in the sector, because it is the most
innovative and efficient cement company and its management has a
good track record of weathering difficult economic conditions. The
stock is trading at a 25% discount to Semen Gresik on an EV/tonne (t)
basis in 2009E.
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