On Delong’s US$950 Million Steel Project in Sulawesi
Minority shareholders of SGX-listed Delong Holdings demanded the Company to suspend the US$950 million steel mill project in the so-called Indonesia Morowali Industrial Park (IMIP), Sulawesi Island, pointing to the company’s unsuccessful attempt in geographical diversification (outside China, especially Thailand). The board of Delong, however, insisted to proceed, expecting commercial operation in the coming months.
Connectivity Report: Java
Slightly behind schedule, President Joko ‘Jokowi’ Widodo is expected to inaugurate Section III and IV of the Pejagan-Pemalang toll road, developed by Waskita Karya (WSKT), this month. Physical construction of the toll road has been 100% completed. We, accordingly, are moving closer to full connectivity of trans-Java.
Connectivity Report: Greater Jakarta
Greater Jakarta should be a better place to live in 12 months time, in the context of public infrastructure. The first light rail transit (LRT) in the city, connecting Kelapa Gading and Velodrome Rawamangun might miss the target for operation during Asian Games (starting in two weeks time), but it should be in commercial operation months after that. No problem. Trial operation of the first mass rapid transit (MRT) in Jakarta, and the country, might also be behind schedule next month. But, overall outlook is positive.
Political Support for Electric Vehicles in Indonesia
“Can you produce it here?” asked President Joko ‘Jokowi’ Widodo to executives of Toyota, when he visited the company’s booth and saw a Prius at Gaikindo Indonesia International Auto Show (GIIAS) Thursday (Aug 2). Earlier on Wednesday, energy and mineral resources repeated his statements about why he is a big supporter of electric vehicles in Indonesia.
Bright Spot of The Economy: Pulp & Paper
Pulp and paper producers are clear winners of the year, so far. Shares of PT Fajar Surya Wisesa (FASW) Tbk, for example, have gained nearly 100% in the past 12 months. Indah Kiat (INKP) and Tjiwi Kimia (TKIM), meanwhile, have skyrocketed 623% and 1,091% respectively in the same period. Apparently, these companies reported strong financial performance in the first half.
Xiaomi Beats Samsung
Pretty much as predicted, Zhuhai Xiaomi Communication Co has grown significantly its sales in Indonesia. For the first time, Xiaomi surpassed Samsung in sales, at least based on financial report of Erajaya Swasembada (ERAA), the largest retailer of cellular and smartphones in Indonesia, in the first half of 2018.
Indocement in First Half: Margins Squeezed Further
Cement producers yet to see the light, and probably have to wait few more years. Indocement Tunggal Prakarsa (INTP), the second largest player in the market, booked net profit of Rp355 billion in the first half of 2018, crashed by 60% from the corresponding period last year as profit margins were squeezed further.
First Half Results & The Market
Composite index of Indonesia Stock Exchange (IDX) finally returned to above 6,000 this morning, lifted by positive sentiment from first half results of companies. Tire manufacturer Goodyear, steel pipe producer Citra Tubindo, ICT distributor Metrodata, and mining company Kapuas Prima Coal reported significantly stronger performance in the period.
Those Continue to Grow
F& B giant Mayora Indah (MYOR) reported negative cash-flow of Rp987.5 billion in the first half of 2018, but decided to spend Rp494 billion in investing activities, jumped from Rp313 billion in the corresponding period of 2017. Mayora posted net profit of Rp736 billion in the first half, surged by 34.3% from the corresponding period last year.
First Half Results: Sido Muncul & Prodia
Consumer herbal producer Sido Muncul (SIDO) booked net profit of Rp291.8 billion in the first half of 2018, an increase of 19.1% from the corresponding period last year. The market leader’s sales revenue actually grew only by 5.4% to Rp1.27 trillion in the first half, but lower costs lifted its gross profit by around 19% to Rp635.83 billion.