INTP
Contact our analyst Eka
HOLD
23 January 2020
Price Rp 18,350
Target price Rp 22,000
23 January 2020
Price Rp 18,350
Target price Rp 22,000
Volume 2019FY: Slight growth in December
- INTP domestic cement sales volume for December was +7.4% higher than a year ago with double digit growth in West Java and Sumatra, which boosted INTP home (W Java) market share from 45.3% to 46.7% and Sumatra from 9.1% to 11.6% vs. last December.
- Total sales volume in 2019 was 18.95 million tons -1.1% lower than 2018.
- The Indonesia cement market in 2019 was slightly higher +0.6% yoy at 69.99 million tons, while in December the domestic market grew 7.2% yoy to 6.54 million tons.
- We expect 1Q2020 cement demand will be slow as the year started with heavy rainfall which is expected to continue throughout 1Q2020.
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9M2019: Margin Rise
- INTP booked net revenue of IDR 11.35 trillion in 9M2019 +5.3% YoY while cost of revenue was maintained. As a result, gross profit grew double digit 27.8% YoY to IDR 3.68 trillion from IDR 2.88 trillion in 9M2018. Gross profit margins improved from 26.7% in 9M2018, and 30.7% in 1H2019 to 32.4% in 9M2019.
- Operating profit rose sharply +130% YoY to IDR 1.21 trillion from IDR 526.7 billion. As a result the operating profit margin was higher at 10.7% from 4.9% in 9M2018.
- INTP booked a bottom line profit of IDR 1.17 trillion, up 90% YoY from IDR 617.7 billion in 9M2018. Net profit margin also improved from 5.7% to 10.4%.
- We maintain our 2019F forecast that INTP will grow net profit +34% to IDR 1.53 trillion with a better ASP, higher sales volume, and well managed costs.
- We are targeting INTP to trade at 50x 2020F PE within a year.
- Target Price is IDR 22,000 which represents +19% upside. HOLD.
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