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Coal Sector – China’s import drop worsens coal price outlook

Coal Sector – Neutral (Maintain)

China’s import drop worsens coal price outlook

  • No catalyst in sight for coal price.
  • Indonesia production down 19.4% at 5M15 YoY.
  • Valuations look reasonable after recent correction with ADRO as top pick.

 

AALI - Expectation is too high

Astra Agro Lestari (AALI) – HOLD (Maintain)

Price: Rp22,650 – Target Price: Rp20,000

Expectation is too high

  • Temperature in Pacific Oceanis increasing, El-Nino to occur.
  • HOLD with 12% downside due to demanding PE’15E of 23.7x.


 

WINS – A challenging environment to navigate

Wintermar Offshore Marine (WINS) – BUY (Maintain)

Price: Rp399 – Target Price: Rp440

A challenging environment to navigate

  • Expecting further margin pressure after difficult 1Q15.
  • Return of large development projects in 2016 is key.
  • Maintain HOLD.

 

BBNI - Better performer within the industry

Bank Negara Indonesia (BBNI) – BUY (Maintain)

Price: Rp6,850 – Target Price: Rp7,880

Better performer within the industry

  • Better than peers.
  • Expect SME and consumer loans to maintain performance.
  • Special mention could rise in 2Q15.

 

SMGR - Weak start

Semen Indonesia (SMGR) – HOLD (Upgrade)

Price: Rp13,125 – Target Price: Rp12,000

Weak start

  • Weak sales volumes in 4M15.
  • Retain our 2015 cement demand assumption.
  • Upgrade to Hold with lower downside.