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INTP

Contact our analyst Eka
Maintain BUY, 25% Upside
5th April 2023 
​
Price Rp 10,450
Target price Rp 13,100
Expecting lower domestic sales in 1Q2023
  • Domestic cement sales in 1Q2023 are still under pressure from prolonged heavy rains. The start of fasting will also tend to reduce cement consumption.
  • In 20222, domestic cement sales volume weakened -3.4% YoY to 63.03 million tones (mt) led by a contraction in bag sales volume of -8.7% YoY due to price increases, while the bulk market maintained growth of +14.5%.
  • For January - February 2023 cement sales, the domestic market was still under pressure with volume declining -2.6% YoY to 9.39 mt due to prolonged heavy rains in February, while the bag market weakened -6.5% YoY and the bulk market grew by +10.2%.
  • Despite the decrease in domestic volumes, INTP had a +6.7% YoY sales volume increase in February with bag sales volume increasing +2.9% and bulk sales volume +19.6%.
  • We maintain our forecast for positive sales volume growth in 2023 as domestic demand is likely to recover from ongoing infrastructure projects which will boost cement consumption.

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4Q2022: Margin recover continue
  • The 60% DMO price of coal in 2H2022 had a positive impact on the recovery in INTP’s margins in 3Q2022 and 4Q2022.
  • In 4Q2022, INTP sales increased +12% YoY but declined -2% QoQ to IDR 4.66 trillion, in line with an ASP hike in September brining the total number of ASP hikes to 3 in 2022.
  • INTP bottom line increased 54% YoY or +37% QoQ to IDR 896 billion and the NPM increased to 19.2% from 13.8% in 3Q2022.
  • Energy costs decreased -2.3% QoQ to IDR 1.38 trillion in 4Q2022 inline with the securing of 60% of coal supply at DMO prices.
  • This resulted in a lower QoQ cost of revenue -4% QoQ and a gross profit increase of +11% YoY or +2% QoQ to IDR 1.7 trillion with a higher GPM of 36.4%.
  • We expect INTP will maintain better margins amid softer coal prices and with 100% DMO prices in 1Q2023. We are forecasting an INTP profit of IDR 1.9 trillion this year, which is an increase of +4.7% YoY.

Valuation: Maintain BUY with TP 13.100
  • We are now targeting INTP to trade at 23x 2024F PE within a year. Target Price is IDR 13,100 which represents +25% upside. We maintain our recommendation to BUY.
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Previously
​INTP Nov2022
​INTP Aug2022
​INTP May2022
​INTP Apr2022
​INTP Nov2021
​INTP Aug2021
​INTP May2021
​INTP Mar2021
​INTP Nov2020
​INTP Aug2020
​INTP Jul2020
​INTP Mar2020
​January 2020
​March 2019
November 2018
​April 2018
February 2018
PT. Binaartha Sekuritas

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