汇丰银行-印尼-建材行业-印尼水泥业：九月需求呈增长势头1011-HSBC-IndonesiaCement：DemandgainsmomentuminSeptember

Disclosures thus both the pent-up demand and the trigger to stimulate it are present: our Indonesian demand growth forecast for 2H17-2018 remains around c9%y-o-y. Likely rapid recovery in utilisation and margins ahead; we rate SMGR Buy: With cement ASP slipping below USD60/MT in 2Q17, the profitability of most players other than the Top-2 has deteriorated to a level where we believe prices and margins are at a bottom and can only go up. With no incremental supply coming into the market over the next three years, a rapid recovery in utilisation, ASP and margins is likely. Against this backdrop, relatively inexpensive valuations make SMGR a compelling Buy, in our view. Ratings and estimates Company Ticker Currency Current price TP Rating Up/down side Market cap (USDm) 3m ADTV (USDm) EV/EBITDA 2018e EBITDA y-o- y% 2018e EBITDA 18e vs. Street Semen Indonesia SMGR IJ IDR 10,650 12,600 Buy 18.3 4,676 4.0 7.1x 38.4 30.1 Indocement INTP IJ IDR 19,225 13,200 Reduce -31.3 5,238 3.0 13.9x 48.8 1.2 Holcim Indonesia SMCB IJ IDR 805 410 Reduce -49.1 457 0.2 9.9x 20.7 0.0 Source: Thomson Reuters Datastream, HSBC estimates. Priced as of close at 10 October, 2017 Flashnote 11 October 2017 Shishir Singh* Materials Analyst The Hongkong and Shanghai Banking Corporation Limited shishirkumarsingh.hk +852 2822 4292 * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations Indonesia Cement EQUITIES BUILDING MATERIALS Indonesia Demand gains momentum in September 查找学术会议， 阅读更多论文写作、投稿经验、 基金申请等相关干货类文章， 请关注公众号【智慧科研】。 扫上方二维码 关注公众号智慧科研 获取更多科研相关资源， 与更多科研人群交流， 请加入智慧科研讨论群 扫上方二维码 添加客服，备注：入群 报告整理于网络，只用于分享，如有侵权，请联系我们报告整理于网络，只用于分享，如有侵权，请联系我们 EQUITIES BUILDING MATERIALS 11 October 2017 2 Demand has sustained momentum since March-2017 with a trade balance recovery; Western Java stages a strong rebound Indonesian trade deficit recovery has been indicating a cement demand recovery Source: Thomson Reuters DataStream, HSBC estimates Indonesia cement demand - regional demand growth y-o-y% y-o-y% growth 2011 2012 2013 2014 2015 2016 2017TD Sumatra 13.7 8.9 1.4 2.5 4.6 4.1 3.8 Java 21.0 14.6 7.7 3.1 2.6 -2.5 10.3 Jakarta 24.9 10.0 5.6 7.5 -4.7 -13.4 1.4 Banten 38.7 14.6 9.0 -7.8 2.6 -9.2 4.4 West Java - Jabar 23.1 15.4 5.8 2.6 1.6 -2.8 7.7 Central Java - Jateng 19.6 16.1 11.2 0.9 4.8 7.7 16.7 Yogyakarta - DIY 24.4 8.7 18.9 1.3 -4.5 2.9 13.6 East Java - Jatim 10.1 16.5 6.3 8.1 1.9 3.9 14.0 Kalimantan 17.0 21.3 7.6 3.6 5.5 -12.5 -5.8 Sulawesi 15.7 16.6 3.9 5.9 7.3 12.0 -0.8 N. Tengar 18.6 14.6 2.7 2.5 4.9 1.0 2.1 Maluku -13.5 54.8 -1.9 6.1 10.4 5.3 -4.6 Indonesia 17.7 14.6 5.5 3.3 3.9 -0.4 6.0 Source: Indonesian Cement Association, Indocement; 2017 TD is for the first eight months of the year Valuation higher coal and electricity prices; IDR depreciation; a weaker-than-expected revival in the property sector; and a much weaker-than expected impetus from infrastructure activity. -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0 50.0 -3,000 -2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Mthly trade balance (USD mn, LHS)Cement sales YoY% 3 per. Mov. Avg. (Mthly trade balance (USD mn, LHS) )3 per. Mov. Avg. (Cement sales YoY%) 3 EQUITIES BUILDING MATERIALS 11 October 2017 SMGR: 1-year forward EV/EBITDA Source: Thomson Reuters DataStream, HSBC Indocement (INTP IJ, IDR19,225, Reduce, TP IDR13,200) Contrary to a shallower decline of 14% in SMGRs underlying profits, we expect INTPs earnings to fall 41% this year. We find it hard to justify INTPs premium of 36% on a one-year forward EV/EBITDA over SMGR (on consensus estimates) and, as a consequence, we reiterate our Reduce rating on the stock. Our target price of IDR13,200, implying 31.3% downside from current levels, remains based on a one-year forward EV/EBITDA of 10.3x, one standard deviation above the long-term mean. We note our strong preference for SMGR over INTP. In our view, the former offers a faster recovery at a far more attractive valuation. Key upside risks: Unexpected demand revival in the companys core markets of Western Java; attrition of competitors, leaving lower competition and a larger market share for INTP; lower coal and electricity prices; IDR appreciation; a stronger-than-expected impetus from infrastructure activity; and value-accretive acquisitions that make use of its cash balance. INTP: 1-year forward EV/EBITDA Source: Thomson Reuters DataStream, HSBC Holcim Indonesia (SMCB IJ, IDR805, Reduce, TP IDR410) Our target price of IDR410, implying a downside of 49.1%, remains based on a one-year forward EV/EBITDA of 9x, which is one standard deviation above the long-term average one- year forward EV/EBITDA (since 2008). We reiterate our Reduce rating on the stock. 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 EV (USD mn)6.0 x7.5x9.0 x10.5x12.0 x 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 EV (USD mn)6.0 x7.5x9.0 x10.5x12.0 x EQUITIES BUILDING MATERIALS 11 October 2017 4 Key upside risks to our view include: About half of the companys COGS are denominated in USD and thus the appreciation of the local currency is beneficial to margins. A faster than expected recovery in domestic property demand should help soak up excess supply at a faster rate and help support SMCBs prices and margins. LafargeHolcim, SMCBs parent company, has divested some of its Asian assets to deleverage, including its Thailand, Vietnam, and Sri Lankan subsidiaries and associates. A potential divestment of Holcim Indonesia at a higher valuation is also an upside risk to our target price. SMCB: 1-year forward EV/EBITDA Source: Thomson Reuters DataStream, HSBC 500 1,000 1,500 2,000 2,500 3,000 3,500 Dec-08Dec-09Dec-10Dec-11Dec-12Dec-13Dec-14Dec-15Dec-16 EV (USD mn)6.0 x7.0 x8.0 x9.0 x10.0 x 5 EQUITIES BUILDING MATERIALS 11 October 2017 Disclosure appendix Analyst Certification The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Shishir Singh Important disclosures Equities: Stock ratings and basis for financial analysis HSBC believes an investors decision to buy or sell a stock should depend on individual circumstances such as the investors existing holdings, risk tolerance and other considerations and that investors utilise various disciplines and investment horizons when making investment decisions. Ratings should not be used or relied on in isolation as investment advice. Different securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations and therefore investors should carefully read the definitions of the ratings used in each research report. Further, investors should carefully read the entire research report and not infer its contents from the rating because research reports contain more complete information concerning the analysts views and the basis for the rating. From 23rd March 2015 HSBC has assigned ratings on the following basis: The target price is based on the analysts assessment of the stocks actual current value, although we expect it to take six to 12 months for the market price to reflect this. When the target price is more than 20% above the current share price, the stock will be classified as a Buy; when it is between 5% and 20% above the current share price, the stock may be classified as a Buy or a Hold; when it is between 5% below and 5% above the current share price, the stock will be classified as a Hold; when it is between 5% and 20% below the current share price, the stock may be classified as a Hold or a Reduce; and when it is more than 20% below the current share price, the stock will be classified as a Reduce. Our ratings are re-calibrated against these bands at the time of any material change (initiation or resumption of coverage, change in target price or estimates). Upside/Downside is the percentage difference between the target price and the share price. Prior to this date, HSBCs rating structure was applied on the following basis: For each stock we set a required rate of return calculated from the cost of equity for that stocks domestic or, as appropriate, regional market established by our strategy team. The target price for a stock represented the value the analyst expected the stock to reach over our performance horizon. The performance horizon was 12 months. For a stock to be classified as Overweight, the potential return, which equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated, had to exceed the required return by at least 5 percentage points over the succeeding 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as Underweight, the stock was expected to underperform its required return by at least 5 percentage points over the succeeding 12 months (or 10 percentage points for a stock classified as Volatile*). Stocks between these bands were classified as Neutral. *A stock was classified as volatile if its historical volatility had exceeded 40%, if the stock had been listed for less than 12 months (unless it was in an industry or sector where volatility is low) or if the analyst expected significant volatility. However, stocks which we did not consider volatile may in fact also have behaved in such a way. Historical volatility was defined as the past months average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility had to move 2.5 percentage points past the 40% benchmark in either direction for a stocks status to change. EQUITIES BUILDING MATERIALS 11 October 2017 6 Rating distribution for long-term investment opportunities As of 11 October 2017, the distribution of all independent ratings published by HSBC is as follows: For the purposes of the distribution above the following mapping structure is used during the transition from the previous to current rating models: under our previous model, Overweight = Buy, Neutral = Hold and Underweight = Sell; under our current model Buy = Buy, Hold = Hold and Reduce = Sell. For rating definitions under both models, please see “Stock ratings and basis for financial analysis” above. For the distribution of non-independent ratings published by HSBC, please see the disclosure page available at Share price and rating changes for long-term investment opportunities Holcim Indonesia (SMCB.JK) share price performance IDR Vs HSBC rating history Rating HK The Hongkong and Shanghai Banking Corporation Limited, Hong Kong; TW HSBC Securities (Taiwan) Corporation Limited; CA HSBC Securities (Canada) Inc.; HSBC Bank, Paris Branch; HSBC France; DE HSBC Trinkaus 000 HSBC Bank (RR), Moscow; IN HSBC Securities and Capital Markets (India) Private Limited, Mumbai; JP HSBC Securities (Japan) Limited, Tokyo; EG HSBC Securities Egypt SAE, Cairo; CN HSBC Investment Bank Asia Limited, Beijing Representative Office; The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Securities Branch; The Hongkong and Shanghai Banking Corporation Limited, Seoul Branch; HSBC Securities (South Africa) (Pty) Ltd, Johannesburg; HSBC Bank plc, London, Madrid, Milan, Stockholm, Tel Aviv; US HSBC Securities (USA) Inc, New York; HSBC Yatirim Menkul Degerler AS, Istanbul; HSBC Mxico, SA, Institucin de Banca Mltiple, Grupo Financiero HSBC; HSBC Bank Australia Limited; HSBC Bank Argentina SA; HSBC Saudi Arabia Limited; The Hongkong and Shanghai Banking Corporation Limited, New Zealand Branch incorporated in Hong Kong SAR; The Hongkong and Shanghai Banking Corporation Limited, Bangkok Branch; PT Bank HSBC Indonesia Issuer of report The Hongkong and Shanghai Banking Corporation Limited Level 19, 1 Queens Road Central Hong Kong SAR Telephone: +852 2843 9111 Fax: +852 2596 0200 Website: This document has been issued by The Hongkong and Shanghai Banking Corporation Limited (“HSBC”) in the conduct of its Hong Kong regulated business for the information of its institutional and professional investor (as defined by Securities and Future Ordinance (Chapter 571) customers; it is not intended for and should not be distributed to retail customers in Hong Kong. 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