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INTP

Contact our analyst Eka
Hold
16th November 2020
​
Price Rp 14,400
Target price Rp 16,000
Expecting lower 4Q2020 Demand
  • As of 9M2020, cement sales contracted-9% YoY to 49 million tons  with bulk cement market contracting -20.4% and the bag market -4.9%. However September cement sales continue to show recovery with volume increasing +5.9% MoM.
  • In September, INTP domestic cement sales volume decreased -2.9% and for 9M2020 volume decreased -7.7%, better than the  overall market.
  • In previous years October is normally the peak month of market volume and with the current situation (full-scale PSBB in Jakarta, many demos and year end holidays in December) we are expecting 4Q2020 cement demand will be lower compared to 3Q2020.
  • With stable ASP, we are expecting INTP revenue in 2020 will reach IDR 14 trillion or down by -12% YoY.


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3Q2020: Margin improved
  • INTP recorded net revenue of IDR 10.15 trillion down -10.6% YoY.
  • INTP net profit in 9M2020 declined -5% YoY to IDR 1.11 trillion. Gross profit dropped -6.5% YoY to IDR 3.44 trillion, Operating profit dropped by -7.8% YoY to IDR 1.11 trillion.
  • The decline in 9M2020 was better compared to the 1H2020 amid margins were better in 3Q2020. INTP recorded a higher gross profit margin in 3Q2020 at 39%, compared to 1Q2020 32%, and 2Q2020 29%. The EBITDA margin was also higher in 3Q2020 at 26% compared to 2Q2020 8% and 1Q2020 21%.
  • The better margins in 3Q2020 are as a result of lower raw material costs, lower coal prices and savings on fuel & power, leading to lower manufacturing costs.
  • Although INTP has distributed a cash dividend in July 2020 of IDR 1.8 trillion, INTP has still kept a clean balance sheet with no bank loans and a strong cash position as of 9M2020.
  • As INTP growth in 4Q2020 will not be as big as in 3Q2020, we are expecting INTP’s net profit will reach IDR 1.7 trillion, down by -4% YoY. 

Valuation: Hold with TP 16,000
  • As we expect lower 4Q2020 cement demand and lower 2020F sales, we maintain our HOLD recommendation for INTP.
  • We are now targeting INTP to trade at 32x 2021F PE within a year. Target Price is IDR 16,000 which represents +11% 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

Setiabudi Atrium, Jl. HR Rasuna Said No.62, RT.18/RW.2, Karet Kuningan, Setia Budi, Jakarta Selatan, DKI Jakarta 12920
+62215206678 | email: kyc.online@binaartha.com

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