FY2012 PTPP Result

PTPP released FY2012 financial report this morning. Revenue was booked at IDR8.0trn (up 28% y-o-y) with Net profit came at IDR310bn (up 29% YoY). Constructions segment still contributed 82% of the company’s revenue, followed by EPC at 16% (IDR1.3trn) – up from last year’s 6% contribution. Interestingly enough, net margin and gross margin have yet to expand despite higher EPC contribution.

Balance sheet totals expanded by 25% accordingly, but has yet to reflect the company’s recent bond issuance. D/E Ratio was booked at 1.08x, up from 0.96x last year (consisting of bank loans and medium term notes). By end of FY13, the company’s D/E Ratio would be pushed up to 1.6x on the back of IDR700bn-IDR1trn bond additions – the highest in the industry.

PTPP’s bond issuance was directly caused by robust growth in mega projects such as New Priok Port stage 1, whose last construction costs at IDR8.3trn is as large as the company’s balance sheet. Yesterday, the company successfully launched IDR700bn 5-year bond (rated by Pefindo at A-) for 8.375% coupon rate – a much lower cost of fund compared to our estimates, as Indonesia’s corporate bond spread to govies has allegedly declined over late last year. We have assumed a 9.5%-10% coupon rate on our model. All in all, good news for PTPP.

PTPP has booked IDR2.4trn worth of new contracts by end of Feb, 12% of its FY13 target at IDR19.7trn. Seasonality wise, we expect the company to garner more projects as the year advances.

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Alam Sutera Realty (ASRI) 2013

Alam Sutera Realty (ASRI) reported a 98% YoY jump in FY12 net profit to IDR1.2t. This came on the heels of higher-than-expected other income. Its revenue soared 77% YoY to IDR2.4t on strong pre-sales and higher average selling prices. On a quarterly basis, net profit increased by 113% to IDR454b in 4Q12, lifting net margin to a high of 62% (3Q12: 35%). During the year, the average selling price in Serpong Township has risen around 30% YoY to IDR12m psm.

2013 Performance Forecast, We project ASRI’s marketing sales will grow to IDR4.3t in FY13F and IDR4.9t in FY14F from IDR3.7t in FY12, representing a 5-7% increase over our previous forecasts. Our upgrade is premised on higher residential land price in Pasar Kemis in FY13F, up from IDR1.6m psm to IDR2m psm (to be launched in March-April 2013). Our FY13F-14F net profit forecasts thus go up by 1-3%.

Pasar Kemis remains the key project to watch. We believe the upcoming residential estates projects in Pasar Kemis will thrive given that each unit will be priced at around IDR500m-1b, which in our view is the right market segment, and the land price of around IDR1.9-2.0m psm is a discount to its competitors’ at IDR2.5m psm (ie, CitraRaya Tangerang). Moreover, Pasar Kemis is easily accessible via the Serpong-Balaraja toll road nearby.

Recommendation and valuation: 

On valuation, rolling over our land market valuation to end of 2013, our TP is IDR1,415, providing 40% upside potential from current price of IDR1,010.

Performance Forecast:

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ADHI as a Property Company?

ADHI’s latest launches, Taman Dhika Cinere (landed residential project) and Grand Taman Melati Margonda (high-rise project in Depok, near University of Indonesia). With these new initiatives, ADHI targets around Rp1tr of marketing sales in 2013 for its property projects, versus Rp505bn in 2012. As around 55% of ADHI’s FY13E net profit target of Rp454bn (up 114% y/y, and 58% above consensus) is property projects.

The first phase of Taman Melati Margonda sold within 10 months. Taman Melati Margonda is located near the University of Indonesia. It caters to students, with studio sized apartments and one bedroom apartments. The first phase, Taman Melati Margonda, has already fully sold and is almost finished construction. ADHI will deliver the units in March-April 2013. The first phase was 100% sold in 10 months.

Second phase of Taman Melati Margonda has been well-received. ADHI’s new project next to Taman Melati Margonda, Grand Taman Melati Margonda, is already 34% booked by customers. The booking fee is Rp3mn per unit. Grand Taman Melati Margonda caters to students, with studio sized apartments at 27sqm and two-bedroom apartments at 55sqm. Sale per sqm is around Rp13-14mn. The apartment tower has around 500 units. ADHI’s marketing agents said they expect Grand Taman Melati Margonda, launched in Dec-12, to be fully sold before the end of the year. According to the marketing sales agent, Grand Taman Melati Margonda is still awaiting a building license, it could possibly come within one or two months

Landed residential still waiting for project license. The first phase of Taman Dhika Cinere is already booked by customers, with booking fee of Rp2mn per unit. Total size of the project is 6.5ha. Land price is at Rp3-4mn, and the first phase is 86 units. The project is still awaiting project license. The project is launched in Dec-12

Pipeline of projects are still ample. Other projects that were launched in Dec-12 include Grand Dhika City Bekasi, which is a 7-tower mixeduse development projects and Taman Dhika Sidoarjo (landed residential). ADHI will also launch projects in Surabaya and Jatinangor.

2012 - Good results
Net profits reached Rp212 bn in FY12 (+16.2% yoy, +108.6% qoq), in line with the consensus. The solid growth at the bottom line came on the back of a 13.9% yoy increase in revenues to Rp7.6 tn as well as a 35.0% yoy surge in profits from the JO, better gross margins and improved cost efficiency which pushed up operating profits by 42.5% yoy to Rp792 bn. Overall, the FY12 revenues and earnings were 96% and 102% of the consensus, respectively. ADHI’s gross margin expanded 150bps in FY12 to 12.5% - its highest ever level. This owes, we believe, to a higher contribution from EPC and the realty and property segments which command margins of 12-15% for EPC and 25-35% for property and realty. The increase in investment property assets to Rp237 bn in FY12 from Rp25 bn in FY11 is also a reflection of the company’s move into realty and the property segment.

Net cash for the first time
ADHI has a healthier balance sheet with cash in hand of Rp949 bn as of December 2012. For the first time, ADHI is in a net cash position which, in our view, stems from the Rp750 bn bonds issuance in mid-2012 as well as ADHI’s better negotiations with suppliers to extend payments up to eight months. Going forward, with more projects coming in from 1Q13 to 3Q13 and in light of ADHI’s plans to issue another Rp750bn of bonds in 1Q13, we believe ADHI’s gearing will increase to 150-200% at most.

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ASSA menunggu untuk naik

Valuasi terhadap PT Adi Sarana Armada Tbk. (ASSA)  dengan menggunakan PEG atau DCF untuk mendapatkan target harga Rp520 (Analisis Buana Sekuritas), mencerminkan PEG 2013F 0,1x, membuat ASSA menjadi saham termurah dalam universe kami (rata-rata PEG 1,1x). Target harga kami mencerminkan 24% diskon dari nilai valuasi DCF per saham, EV/ EBITDA 2013F 5,1x, PER 2013F 17,9x, tetapi hanya 12,1x PER 2014F, karena profil pertumbuhannya yang tinggi dan dapat diandalkan. Kami yakin pada saat ini harga saham belum mencerminkan nilai ASSA yang sebenarnya karena pasar tidak melihat potensi pertumbu-hannya yang tinggi, yakni didukung oleh pertumbuhan pendapatan yang tinggi (historis 49% CAGR 2007-11, proyeksi 27% 2012-14F), model bisnis yang unggul serta underperformance ASSA terhadap IHSG 8% sejak IPO yang kami perkirakan akan reverse.

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PT. Telekomunikasi Indonesia, Tbk: Pertumbuhan terkuat dalam 4 Tahun terakhir

Telkom FY12 membukukan laba sedikit di atas perkiraan konsensus para analisis (Bloomberg 2013) setelah kebijakan membukukan biaya ERP di 4Q12. Pencapaian ini ditopang oleh pertumbuhan 12% yoy pendapatan mobile dari Telkomsel, dan fakta bahwa Telkomsel mengalahkan para pesaingnya di 4Q12. Telkom melaporkan laba bersih konsolidasian sebesar IDR12.8trn (+17,2% yoy) ditopang dari pendapatan IDR. 77.1trn (+8,3% yoy). 

Secara khusus pada Q4 2012' pendapatan jaringan komunikasi dan pendapatan lainnya mengalami QoQ 9% QoQ dan 28%, namun tetap diimbangi pertumbuhan QoQ konsolidasi 2,6% pada produksi seluler pada Telkomsel. 

Pencapain kinerja ini merupakan pertumbuhan terkuat Telkomsel pada 4 tahun terakhir. 
Pencapaian market share 65% milik untuk pasar mobile mendorong Telkomsel tumbuh 12% (YoY 2012). EBITDA Telkomsel tumbuh 11%, dan mampu mendorong laba bersih sebesar 23%, hasil ini merupakan buah dari ekspansi lebih dari 50% pendapatan jasa data 3G dan blackberry.

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COMPANY UPDATE: PT. Tiga Pilar Sejahtera, Tbk (AISA)

TICKER: AISA IJ | CURRENT PRICE: Rp. 1.130,- | TARGET PRICE: Rp. 1.640,-

Tradisi Bisnis dengan Komitmen Kuat

• Pada tahun 1959, almarhum Tan Pia Sioe mendirikan bisnis keluarga yang nantinya berkembang menjadi PT. Tiga Pilar Sejahtera Food, Tbk (AISA). Sebuah Bisnis keluarga yang memproduksi bihun jagung dengan nama Perusahaan Bihun Cap Cangak Ular di Sukoharjo, Jawa Tengah. Sampai hari ini, kultur manajemen yang erat seperti sebuah keluarga adalah salah satu nilai yang terus dipertahankan oleh generasi ketiga dari sang pendiri.
• Untuk memenuhi permintaan pasar akan produk-produk makanan yang terus tumbuh AISA didirikan pada tahun 1992 dan menjadi perusahaan publik pada 2003. AISA selalu menekankan pentingnya produk yang berkualitas dan memberikan nilai tambah kepada konsumen. Berbekal pengalaman yang panjang, tradisi, serta loyalitas konsumen; AISA berhasil meraih posisi sebagai produsen mi kering dan bihun terdepan di pasar Indonesia.
• Komitmen AISA untuk menghasilkan produk yang terbaik, diterima oleh pasar, dan berkualitas tinggi dibuktikan dengan diperolehnya sertifikat ISO 9001:2002, HACCP, dan sertifikasi Halal. Standar produksi yang tinggi dan jaringan distribusi yang luas memperkuat AISA sebagai salah satu pilihan konsumen.
• Kegiatan usaha AISA dikelompokkan ke dalam 3 lini usaha yaitu: Divisi MAKANAN, Divisi AGRIBISNIS yg bergerak dalam perkebunan kelapa sawit; Lini bisnis terbaru yaitu divisi DISTRIBUSIBERAS 
• Beberapa merek dagang TPS Food antara lain Ayam 2 Telor, Superior Spesial, Rojo Lele, dan Taro. 

Kinerja Keuangan Fantastis di tahun 2012

AISA membukukan laba bersih pada Quarter 4 2012 sebesar 126 Miliar atau mengalami pertumbuhan YoY sebesar 67%. Dengan demikian, laba bersih per saham setara dengan Rp 114.63 per lembar, dengan valuasi harga per-8 Februari 2013 maka nilai PER 9,8x. Berdasarkan pencapaian kinerja financial ini, dapat disampaikan harga wajar dengan valuasi market per-lembar berkisar pada Rp. 1.490.


Ekspansi Bisnis berlanjut 2013

• AISA menargetkan akan membangun 18 pabrik beras baru dalam jangka waktu 3-4 tahun mendatang. AISA berencana membangun empat pabrik beras selama 2012-2013 (AISA siap menginvestasikan dana sebesar Rp580 miliar), Lokasi di Jawa Tengah dan di Jawa Timur. Kapasitas produksi masing-masing 120 ribu ton per tahun. Konstruksi pabrik di Jawa Tengah dimulai dan ditargetkan tuntas pada 3Q13. Setelah pembangunan dua pabrik itu tuntas, total kapasitas beras AISA naik dua kali lipat menjadi 480 ribu ton per tahun dari saat ini 240 ribu ton per tahun. Sedangkan pabrik di Jawa Timur pembangunannya dimulai pada 3Q13 dan direncanakan selesai pada 2014. pendanaan investasi berasal dr dana hasil rights issue dan pinjaman bank. Perseroan meraup dana sebesar Rp700 miliar dari rights issue. Sebanyak 60% dananya digunakan u/ pengembangan usaha dan sisanya u/ membayar utang. AISA, menargetkan pendapatan dari segmen beras mencapai Rp7,2 triliun pada 2014. Adapun total pendapatan tahun ini diperkirakan mencapai Rp3 triliun. 
• PT Tiga Pilar Sejahtera Food Tbk (AISA) melalui anak usahanya, PT Balaraja Bisco Paloma akan merealisasikan rencana mengakuisisi pabrik pembuat makanan, PT Subafood Pangan Jaya. Nilai transaksinya diperkirakan mencapai Rp100M. 
• PT Tiga Pilar Sejahtera Food Tbk (AISA) sedang mengkaji penerbitan obligasi senilai Rp 1 triliun. Emisi obligasi ini direncanakan dilakukan pada kuartal I tahun 2013. Sebagian besar dana yang didapat dari penerbitan surat utang ini akan digunakan untuk membiayai pelunasan utang. 

Pertumbuhan yang berlanjut di Tahun 2013

Komitmen yang kuat terhadap produk dan rencana dan realisasi ekspansi bisnis AISA, kami berkeyakinan bahwa kinerja fantantis AISA akan berlanjut pada tahun 2013 dengan target penjualan 4 Trilyun dengan pertumbuhan 35% (YoY). Dengan karakter bisnis komoditas pangan, margin operasional AISA akan bertahan pada kisaran 20% atau tercapai laba operasional sebesar 814 Milyar dan net income sebesar 325 Milyar atau tumbuh 26,9% (YoY). Target EPS tahun 2013 sebesar 136,75 per-lembar dan target price Rp. 1.640,- dengan PER 12x. Lebih lanjut, tren ini diprediksikan akan berlanjut pada tahun 2014.

Tabel 1 Proyeksi Kinerja 2013-2014

	2010	2011	2012	2013F	2014F
Target Price	719	846	1.080	1.640	2.031
Revenue	705,22	1752,80	3014,82	4.070	5.494,51
EBITDA (Rp. Bio)	217,98	366,94	602,96	814	1.098,90
Net Income (Rp. Bio)	75,86	126,91	256,26	325,6	439,56
EPS (Rp.)	41,48	74,22	107,63	136,75	184,62
Growth (YoY) (%)	73,10	78,92	45,01	40,20	32,80
PER (x)	17,33	6,67	10,03	12,00	11,00
PBV (x)	2,27	0,82	1,85	1,24	1,20

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Global economic outlook and investment implications in 2013

Highlight:

• Despite improved financial market sentiment, the global growth outlook remains subdued. This masks, however, significant divergences between regions. Economic growth should be the strongest in Asia.
• This slow growth outlook will be compounded by ongoing fiscal policy tightening and an already aggressive monetary policy stance in many developed economies, as well as a continuation of the deliverable process.
• Structurally, aggressive monetary policy, through quantitative easing, is forcing down real yields and driving a hunt for yield and income.
• As a result there will likely be three major implications for investors.
• Firstly, given a continued slower growth environment, it is likely that returns on traditional asset classes in the years ahead may be much lower than has been the case for the decade prior to the global financial crisis.
• Secondly, the need for portfolio diversification is likely to become even greater. Portfolios will need to be able to withstand periods of increased volatility, continual reassessment of the macroeconomic outlook and increased political risk in 2013.
• Thirdly, the need to invest in the structural changes flowing through the global economy. It will be increasingly important to invest in countries and companies ‘facing’ the world’s growth.

What has driven improved market sentiment and returns?

• 2012 delivered a considerably better financial market environment than most commentators and investors were expecting. Financial markets have been supported by extremely aggressive central banks, particularly the US Federal Reserve, and reduced tail risk fears in Europe. Combined, this saw better returns in equity markets over 2012, as low yields in bond markets encouraged investors to seek higher returns and income opportunities in other asset classes.
• In Europe, financial markets begun to price in the reduced likelihood of a tail risk event post European Central Bank President, Mario Draghi’s comments that within their mandate, the ECB would do ‘whatever it takes to preserve the euro’. His comments drew a line in the sand, reassuring investment markets that the ECB would do everything in its power to prevent another crisis developing.
• The US economic recovery also appeared on a firmer footing, supported by the US Federal Reserve and clear signs of an improvement in the housing market.
• In China, economic growth stabilized and the leadership transition was smooth and relatively uneventful. For the rest of Asia, the economic growth performance in 2012 was relatively subdued, but the outlook has improved markedly.
• As a result, especially in the later stages of 2012, risk assets performed well. This saw capital reallocation's beginning to return to equity markets: out of safe haven assets, in particular cash markets.
• While this was a positive development, there remain some concerns over the ability of these improved investment market returns to continue given the still challenging macroeconomic environment.

The global economic outlook

• The International Monetary Fund, on 23 January 2013, forecasts world economic growth in 2013 at 3.5%1.This represented a more gradual recovery than forecast in October 2012. A delayed recovery in Europe, a recession in Japan and continued fiscal contraction amongst the major developed economies continue to add to the malaise. More positively, however, growth in China and the rest of Asia is expected to accelerate in 2013.
• The expected global economic growth rate for 2013 remains lower than the average growth rate of 4.2% experienced from 2000 to 2007. While, in isolation the forecast for growth in 2013 of 3.5% is reasonable; the challenges continue to lie in the sources of this growth and the ongoing rebalance of growth towards Asia from the developed world.
• Looking at more detail within the IMF forecasts, we see that emerging market and developing economies are forecast to grow by 5.5% in 2013 and 5.9% in 2014.
• In contrast, developed economies are forecast to grow by just 1.4% in 2013 and 2.2% in 2014. It is this divergence in growth that financial markets continue to grapple with.
• Developed economies will continue to be weighed down by moderate growth in industrial production and global trade.
• In the US, while there is a recovery in the housing sector, fiscal contraction and subdued business investment are expected to weigh on the US economy in 2013, keeping growth for the year to just 2.0%. See chart below.

IMF World Growth Forecasts (%)

• In Europe, while tail risks have been mitigated, fiscal consolidation and the delayed effects of the crisis in 2012 are continuing to hamper growth in 2013. As a result, the Euro-Area as a whole is expected to remain in recession in 2013.
• In Japan, while there is increased talk of aggressive policy by the Bank of Japan, the impact on the real economy is expected to flow through only over time, while the demographic challenge remains a key negative. As a result, economic growth in Japan is forecast at just over 1% in 2013.
• Growth in emerging market and developing economies is expected to rebound in 2013, but will still be below the highs recorded in 2010 and 2011, which was boosted by stimulus efforts. As noted, however, growth across the emerging and developing nations, especially in Asia, is expected to be significantly more robust than the developed world.
• In China, economic growth is forecast at 8.2% this year, up from 7.8% in 2012. The pace of growth in India is also expected to accelerate, up to 5.9% in 2013 from 4.5% last year.
• The “newly industrialised” Asian nations (Korea, Singapore, HK and Taiwan) are expected to grow by 3.9% in 2013, up from 3.2% in 2012. Meanwhile, the ASEAN nations (Indonesia, Malaysia, Philippines, Thailand and Vietnam) are expected to enjoy solid growth of 5.7% this year, up from 5.5% in 2012. Finally, ‘developing’ Asian nations are forecast to grow by 7.5% in 2013, from 7.1% in 2012.
• However, despite some improvements in the global economy and improved financial market sentiment, considerable uncertainty continues to persist.
• Much of this is driven by political uncertainty, such as the recent Italian elections and upcoming elections in countries such as Germany and Australia later this year and India in early 2014. All of which could bring volatility. In the US, the Sequestration, debt ceiling and Budget negotiations all present an economic headwind.
• The good news is that inflation pressures have, at this stage, remained contained. This is largely due to the significant output gaps that still exist in developed economies -despite aggressive monetary policy. The IMF forecasts inflation of just 1.6% for the developed economies in 2013.
• In emerging market and developing economies earlier efforts to contain inflation in 2010 and 2011 have remained successful. The IMF, however, forecasts inflation of 6.1% for emerging and developing economies for 2013. China’s inflation rate is expected to remain relatively low around 3.0%, but with higher rates of inflation across countries such as India, Indonesia, the Philippines and Vietnam.

Investment conclusions

• The diverging global economic growth outlook and political uncertainty is likely to have a significant impact on the source of asset price growth over both 2013 and into the medium term.
• Asset performance will also likely be highly dependent on the ability of emerging economies to continue to grow in the face of low economic growth from the developed world.
• The potential flow-on from this slower economic growth outlook and the limited ability of governments to stimulate their economies is likely to be, therefore, a period of lower returns on investment in financial asset than experienced in pre-Global Financial Crisis markets. The absence of leverage is likely to compound this.
• If the economic outlook for the major developed nations is as moderate as expected over the medium-term there would appear to be three key lessons for investors.
• Firstly, a slower macro-economic growth rate (ie. lower nominal GDP growth) would imply a period of lower returns on traditional assets classes than many investors have come to expect, especially given the returns experienced over the decade prior to the financial crisis.
• Despite stronger gains in financial markets in 2012, investors may still need to adjust downwards their expectations for future returns in markets.
• Secondly, investment portfolios will likely need to be diversified in such a way as to be able to cope with periods of reduced expectations for economic growth, increased financial market volatility, elevated political risk, greater regulation by governments and a reduced ability for governments to support growth through either fiscal or monetary policy.
• Thirdly, exposure to the large structural forces underway in the global economy will become more important in providing growth in a portfolio.
• The centre of growth in the global economy continues to change and investors must be aware that divergent economic growth patterns are likely to continue for a prolonged period of time.
• It seems clear that the majority of the world’s economic growth will either come from Asian countries in the years ahead and/or those countries that can export goods and services to the fast growing Asian region.
• Cyclical trends will be important to understand, therefore, but investing for the structural change in a diversified manner should continue to be a focus for investors.
• Investors should, therefore, focus on countries and companies ‘facing’ the world’s growth.
• In an environment where the macro-economic outlook looks set to be muted and provide challenging circumstances for traditional asset classes, looking at alternative investments will also remain a focus.
• This could include asset classes such as infrastructure and property, where income growth is linked to inflation and/or determined by government regulation.
• Investments that are leveraged to the positive structural changes in the global economy, compared to the subdued cyclical environment, should also perform better.

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Investing 101: What Is Investing?

The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit. 

It's actually pretty simple: investing means putting your money to work for you. Essentially, it's a different way to think about how to make money. Growing up, most of us were taught that you can earn an income only by getting a job and working. And that's exactly what most of us do. There's one big problem with this: if you want more money, you have to work more hours. However, there is a limit to how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we don't have the leisure time to enjoy it 

You can't create a duplicate of yourself to increase your working time, so instead, you need to send an extension of yourself - your money - to work. That way, while you are putting in hours for your employer, or even mowing your lawn, sleeping, reading the paper or socializing with friends, you can also be earning money elsewhere. Quite simply, making your money work for you maximizes your earning potential whether or not you receive a raise, decide to work overtime or look for a higher-paying job. 

There are many different ways you can go about making an investment. This includes putting money into stocks, bonds, mutual funds, or real estate (among many other things), or starting your own business. Sometimes people refer to these options as "investment vehicles," which is just another way of saying "a way to invest." Each of these vehicles has positives and negatives, which we'll discuss in a later section of this tutorial. The point is that it doesn't matter which method you choose for investing your money, the goal is always to put your money to work so it earns you an additional profit. Even though this is a simple idea, it's the most important concept for you to understand. 

What Investing Is Not 
Investing is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the hope that you might win money. Part of the confusion between investing and gambling, however, may come from the way some people use investment vehicles. For example, it could be argued that buying a stock based on a "hot tip" you heard at the water cooler is essentially the same as placing a bet at a casino. 

True investing doesn't happen without some action on your part. A "real" investor does not simply throw his or her money at any random investment; he or she performs thorough analysis and commits capital only when there is a reasonable expectation of profit. Yes, there still is risk, and there are no guarantees, but investing is more than simply hoping Lady Luck is on your side. 

Why Bother Investing? 
Obviously, everybody wants more money. It's pretty easy to understand that people invest because they want to increase their personal freedom, sense of security and ability to afford the things they want in life. 

However, investing is becoming more of a necessity. The days when everyone worked the same job for 30 years and then retired to a nice fat pension are gone. For average people, investing is not so much a helpful tool as the only way they can retire and maintain their present lifestyle. 

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Indomobil Sukses Internasional: More details on the new modified Evalia

(IMAS, Buy, Rp5,400, TP: Rp6,550)

Subsequent to our yesterday’s comment on the newly launched modified Nissan Evalia, Nissan Motor Indonesia sent a press release detailing the specifications and prices. The company officially refreshes the existing SV model with additional new features and launches St model as a new line-up, aimed to provide better comfort at an affordable prices.

The SV variant – Nissan refreshed this model by refining its seat back material and installing an additional rear cooler and flush window. Previously, rear cooler and flush window can only be found in the highest XV variant. Based on our observations, prices are slightly raised by Rp10mn to Rp172mn for manual transmission (from Rp162mn) and Rp182mn for the automatic transmission (from Rp172mn). These imply a 5.8-6.2% increase, which is justifiable given Rupiah depreciation and rising raw material prices. For the high-end XV type, Nissan also raised the price to Rp182mn for the manual transmission (from Rp175mn) and Rp192mn for the automatic transmission (from Rp185mn)

The St variant – This variant is totally a new line-up, which we believe is used as a strategy to tap lower-end consumer segment with better features as compared to the lowest S segment that is being targeted for corporations. The features offered include power window, third row head rest, seat leg cover, inside door handle finisher, seat back material, and rear cooler air conditioning system. Offered in a manual transmission, Nissan priced this variant at Rp155mn, about 6% more expensive than the lowest-end variant but 10% cheaper than the manual transmission SV type.

No price increase for low-end model – In the new price list, we note that Nissan has increased selling prices by 4.9% on average (range: 3.8-6.2%), but not for the lowest-end S type that is relatively unchanged at Rp146mn (previous price: Rp145mn). We believe this is part of Nissan’s strategy in tapping the lucrative corporate segments, which believed to account for about one-third of the total domestic 4W sales.

Recommendation – Our forecast assumes 2,000 units of Evalia sales per month, yielding annual sales of 24,000 units for this year, forming 30% of our total 79,900 units of Nissan sales. For every 1,000 units additional Evalia sales per year, we estimate a 0.8% increase in IMAS’ EPS. At the moment, we have a Buy call with Rp6,550/share target price. IMAS would release 4Q12 results this month, which we think may not be as strong. Ramping-up 1Q13 sales would be the catalyst, in our view. IMAS now trades at 12.3x FY13F PE.

Key features	1.5 S MT	1.5 St MT	1.5 SV MT	1.5 SV AT	1.5 XV MT	1.5 XV AT
	No changes	New line-up	Refreshed	Refreshed	No changes	No changes
Old price (Rp mn)	145	n.a.	162	172	175	185
New price (Rp mn)	146	155	172	182	182	192
Change	0.7%	n.a.	6.2%	5.8%	4.0%	3.8%
Sliding side window	No	Yes	Yes	Yes	Yes	Yes
Previous	No	n.a.	Yes	Yes	Yes	Yes
Rear cooler	No	Yes	No	No	Yes	Yes
Previous	No	n.a.	Yes	Yes	Yes	Yes

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