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Equity Research
Company Update
Wednesday,29 June 2022 Indocement Tunggal Prakarsa(INTP IJ)
BUY
Maintain KTA: Navigating high energy costs
Last price (IDR) 9,625 We hosted a call with INTP to discuss the latest update on the cement sales
Target Price (IDR) 15,300 dynamics in Indonesia as well as the potential short-term catalysts to navigate
Upside/Downside +59.0% the still-high coal prices. INTP has secured 10% of its coal stock needs at the
Previous Target Price (IDR) 15,300 DMO price recently and made cement ASP adjustments in June 22. Cement
sales are expected to be higher in 2H22 due to seasonality, as well as infra and
Stock Statistics commercial development toward the year-end. INTP also views positively the
Sector Cement new capital city development as it will contribute to the cement demand in
Bloomberg Ticker INTP IJ Kalimantan. INTP maintains its cement sales growth target at 5% this year
No of Shrs (mn) 3,681 with its EBITDA margin target at 20%.
Mkt. Cap (IDRbn/USDmn) 35,432/2,388 Impact of ASP adjustments. INTP has made its first price increases since Q4 2021 for
Avg. daily T/O (IDRbn/USDmn) 54.2/3.7 bagged products nationwide. However, the price adjustments are not enough to
compensate for the surging coal price. Further price adjustments were made in March
Major shareholders (%) 22 for both bagged and bulk products and the impact on market share was immediate.
Birchwood Omnia Limited 51.0 We note that INTP’s market share dropped from 26% in Jan 22 to 22% in April 22. Then
Public 49.0 from April to May, other players started to make price adjustments, with INTP regaining
Estimated free float 49.0 market share in May 22 recording volume growth of 9.7%yoy. Due to high coal prices,
INTP once again raised ASP in Jun 22 for bagged products sold in Java. INTP has made
EPS Consensus (IDR) total ASP increases of 20%.
2022F 2023F 2024F
Expecting the continuation of seasonality this year. INTP foresees higher sales due to
Danareksa 648.3 873.9 1,024.5 seasonality this year, on the back of infra and commercial project development from
Consensus 433.7 589.8 752.0 higher corporate capex toward the year-end and from drier weather until the end of
Danareksa/Cons 49.5 48.2 36.2 4Q. The continuation of infra and commercial project development will drive the bulk
cement sales growth. In addition, INTP also views positively the new capital city
INTP relative to JCI Index development as it is ready to support the cement demand in Kalimantan, with cement
sourced from its plant in Tarjun, South Kalimantan. The cement will be sent via vessels
to the location of the new capital city at Penajam Paser Utara, East Kalimantan.
Positive progress on coal stocks. INTP has secured c.10% of its coal stocks needed for
FY22 at the DMO price of USD90/ton (which is converted to the LCV coal price at
USD40/ton). This is positive for INTP, along with the indefinite extension of the DMO
policy since Apr 22. Despite this, INTP expects the coal price to remain high until year-
end. As such, the company continues to build partnerships to obtain DMO access, as
well as increasing its use of alternative fuels. Meanwhile, further ASP adjustments will
depend much on the coal price trend until the year-end.
Maintain BUY with a TP of IDR15,300. We maintain our BUY call on INTP on the back
of continued positive developments of its cost efficiency strategy and expected higher
Source : Bloomberg demand in 2H22. We also maintain our positive view on the price-capping
institutionalization via BLU that is expected to be official in July, to maintain coal supply
availability for the overall cement industry.
Key Financials
Year to 31 Dec 2020A 2021A 2022F 2023F 2024F
Revenue (IDRbn) 14,184 14,772 15,799 16,897 18,190
EBITDA (IDRbn) 3,278 3,324 4,038 4,993 5,676
EBITDA Growth (%) 5.5 1.4 21.5 23.6 13.7
Net profit (IDRbn) 1,806 1,789 2,387 3,217 3,771
x Muhammad Naufal Yunas EPS (IDR) 490.7 485.9 648.3 873.9 1,024.5
(62-21) 5091 4100 ext. 3507 EPS growth (%) (1.6) (1.0) 33.4 34.8 17.2
BVPS (IDR) 6,024.1 5,601.6 6,195.4 6,421.0 6,571.6
Muhammad.yunas@brids.co.id
DPS (IDR) 725.0 500.0 485.9 648.3 873.9
PER (x) 19.6 19.8 14.8 11.0 9.4
PBV (x) 1.6 1.7 1.6 1.5 1.5
Dividend yield (%) 7.5 5.2 5.0 6.7 9.1
bridanareksasekuritas.co.id EV/EBITDA (x) See importa8.6nt disclosure8.9 a t the back6.8 of this repo5.3rt 14.5
Source : INTP, Danareksa Estimates
Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth
Source: Company, BRI Danareksa Sekuritas estimates Source: Company, BRI Danareksa Sekuritas estimates
Exhibit 3. Margins Exhibit 4. Gearing Level
Source: Company, BRI Danareksa Sekuritas estimates Source: Company, BRI Danareksa Sekuritas estimates
Exhibit 5. Distance from Tarjun Plant to the New Capital City Exhibit 6. Cement Market Share in Kalimantan
Source: Google Maps Source: INTP, Ministry of Industry
bridanareksasekuritas.co.id See important disclosure at the back of this report 2
Exhibit 7. Income Statement
Year to 31 Dec (IDRbn) 2020A 2021A 2022F 2023F 2024F
Revenue 14,184 14,772 15,799 16,897 18,190
COGS (9,071) (9,646) (9,806) (9,786) (10,162)
Gross profit 5,114 5,126 5,993 7,112 8,028
EBITDA 3,278 3,324 4,038 4,993 5,676
Oper. profit 1,876 2,071 2,692 3,599 4,236
Interest income 386 214 307 416 462
Interest expense (51) (32) (26) (26) (26)
Forex Gain/(Loss) 0 0 0 0 0
Income From Assoc. Co’s 15 24 25 26 27
Other Income (Expenses) 0 0 0 0 0
Pre-tax profit 2,226 2,277 2,998 4,015 4,699
Income tax (419) (489) (612) (798) (927)
Minority interest 0 0 0 0 0
Net profit 1,806 1,789 2,387 3,217 3,771
Core Net Profit 1,806 1,789 2,387 3,217 3,771
Exhibit 8. Balance Sheet
Year to 31 Dec (IDRbn) 2020A 2021A 2022F 2023F 2024F
Cash & cash equivalent 7,698 6,141 8,318 9,240 9,920
Receivables 2,621 2,618 2,910 3,110 3,345
Inventory 1,824 2,267 1,972 1,967 2,043
Other Curr. Asset 157 310 310 310 310
Fixed assets - Net 14,397 14,342 13,908 13,615 13,274
Other non-curr.asset 648 457 457 457 457
Total asset 27,345 26,136 27,874 28,700 29,350
ST Debt 254 162 162 162 162
Payables 2,319 2,955 2,507 2,502 2,598
Other Curr. Liabilities 1,642 1,530 1,530 1,530 1,530
Long Term Debt 247 114 114 114 114
Other LT. Liabilities 706 755 755 755 755
Total Liabilities 5,168 5,515 5,068 5,063 5,159
Shareholder'sFunds 22,176 20,621 22,807 23,637 24,191
Minority interests 0 0 0 0 0
Total Equity & Liabilities 27,345 26,136 27,874 28,700 29,350
bridanareksasekuritas.co.id See important disclosure at the back of this report 3
Exhibit 9. Cash Flow
Year to 31 Dec (IDRbn) 2020A 2021A 2022F 2023F 2024F
Net income 1,806 1,789 2,387 3,217 3,771
Depreciation and Amort. 1,402 1,253 1,346 1,393 1,441
Change in Working Capital 737 (71) (444) (201) (215)
OtherOper. Cash Flow (343) (128) (281) (390) (436)
Operating Cash Flow 3,602 2,843 3,008 4,019 4,561
Capex 1,100 1,100 1,100 1,100 1,100
Others Inv. Cash Flow 534 400 307 416 462
Investing Cash Flow 1,634 1,500 1,407 1,516 1,562
Net change in debt 390 (225) 0 0 0
New Capital 0 0 0 0 0
Dividend payment (2,669) (1,841) (1,789) (2,387) (3,217)
Other Fin. Cash Flow (93) (1,619) 1,561 (26) (26)
Financing Cash Flow (2,371) (3,685) (227) (2,413) (3,243)
Net Change in Cash 2,865 658 4,188 3,122 2,880
Cash - begin of the year 7,652 7,698 6,141 8,318 9,240
Cash - end of the year 7,698 6,141 8,318 9,240 9,920
Exhibit 10. Key Ratios
Year to 31 Dec 2020A 2021A 2022F 2023F 2024F
Growth (%)
Sales (11.0) 4.1 6.9 7.0 7.6
EBITDA 5.5 1.4 21.5 23.6 13.7
Operating profit (1.5) 10.4 30.0 33.7 17.7
Net profit (1.6) (1.0) 33.4 34.8 17.2
Profitability (%)
Gross margin 36.1 34.7 37.9 42.1 44.1
EBITDA margin 23.1 22.5 25.6 29.5 31.2
Operating margin 13.2 14.0 17.0 21.3 23.3
Net margin 12.7 12.1 15.1 19.0 20.7
ROAA 6.6 6.7 8.8 11.4 13.0
ROAE 8.0 8.4 11.0 13.9 15.8
Leverage
Net Gearing (x) (0.3) (0.3) (0.4) (0.4) (0.4)
Interest Coverage (x) 36.7 65.5 102.8 137.4 161.7
Source : INTP, Danareksa Estimates
bridanareksasekuritas.co.id See important disclosure at the back of this report 4
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