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INTP

Contact our analyst Eka
BUY
25th March 2021
​
Price Rp 13,000
Target price Rp 17,700
Expecting better demand in 2H2021
  • Domestic cement sales increased +3.9% QoQ to 18.1 million tons (mt) in 4Q2020, higher growth than other quarters in 2020. However, 2020FY domestic sales volume still  decreased by -10.4% YoY to 62.74 mt, with the bulk market contracting -22.2% and the bag market -6.1% YoY.
  • In January – February 2021, domestic cement sales volume still decreased -9.2% YoY to 20 mt sales volume. Lower demand in early 2021 is the result of heavy rainfall accompanied by floods in some areas.
  • We expect positive sentiment will impact the cement sector, such as the 2021 infrastructure budget which is higher by 38%, and the establishment of the Sovereign Wealth Fund to attract more investment in infrastructure projects, industrial estates, and the property sector.
  • The recent down trend of daily new Corona cases and the vaccination process will also boost sentiment on higher cement demand.
  • We are expecting cement demand to be lower in the 1H2021 but higher in the 2H2021. 

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2020FY results: cost efficiency
  • INTP recorded net revenue in 4Q2020 of IDR 4.03 trillion, better other quarters in 2020, but still down -12.1% YoY. For 2020FY, INTP revenue decreased -11% YoY to IDR 14.2 trillion impacted by lower sales volume.
  • INTP net profit in 4Q2020 increased +4.6% YoY or 6.6% QoQ to IDR 689 billion. While for 2020FY, INTP net profit decreased slightly -1.58% to IDR 1.81 trillion, with a better NPM of 12.7% from 11.5% in 2019 as they maintained costs.
  • Gross profit in 2020 decreased -7% YoY to IDR 5.1 trillion, Operating profit decreased slightly -1.5% YoY to IDR 1.87 trillion.
  • The decline in the bottom line was better compared to the decline in revenue because of efficiency in costs such as electricity and fuel.
  • We are expecting INTP’s 2021FY revenue and net profit will reach IDR 15 trillion and IDR 1.9 trillion or will grow slightly +5.8% and +7.5% respectively.
Valuation: Upgrade to Buy with TP 17,700
  • As we expect slight growth both in sales and bottom line following more positive sentiment towards the cement sector, we upgrade our recommendation to BUY.
  • We are now targeting INTP to trade at 30x 2022F PE within a year. Target Price is IDR 17,700 which represents +36% upside.
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Previously
​INTP Aug2020
​INTP Jul2020
​INTP Mar2020
​January 2020
​March 2019
November 2018
​April 2018
February 2018
PT. Binaartha Sekuritas

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