印尼2020年市场展望：依赖外部性的增长

1、Equity ResearchAsia Pacific | IndonesiaIndonesia MarketIndonesia MarketStrategy2020 Outlook: Externalities-dependentgrowthStrategy |StrategyFigure1:CSFourFactorsEarlyEconomicIndicatorspointsoutto2020smallrecovery148 157 148 157 148 155129 129 134 143 132 1361002510254087101 3317192712273635381936422

2、43445464751565963 26 162427333134463734 37 28263428303928 3131 3135 30 160140120Research AnalystsAndri Ngaserin62 21 2553 7917 HYPERLINK mailto:andri.ngaserin andri.ngaserin1000Fiscal FDI EXIMCommodityGregorius Gary62 21 255 37911 HYPERLINK mailto:gregorius.gary gregorius.garySource: BPS, the BLOOMB

3、ERG PROFESSIONAL service, Credit Suisse researchHigh external dependency. 2019 has seen severe revenue deceleration owing to adjustments in commodity prices and overall soft demand. An aspect of Indonesias economic health that stands out is its high dependence on external factors such as commoditypr

4、icesandtrade(export/import)momentum.Inaddition,assumingabottoming out of commodities and trade momentum, we should see a modest recovery.CS 4EEI indicators points out to modest recovery; but reform confidence increasing. We model Indonesias drivers of wealth creation (Fiscal/FDI/EXIM trade/commodity

5、 pricesboth soft and hard) which suggest that 2020 is likely to see a modest recovery, but uncertainty is high, as these factors are highly dependent on Chinas growth and commodity prices; still among the controllables are modest fiscal spend (+7% in 2020) with capacity to increase. Hence, we have c

6、reated our Four Factors Early Economic Indicators (CS 4EEI) indicators to react well to Indonesias externality-influenced growth.Wehighlightourincreasingconfidenceonreformeffortsoverthelasttwomonths.What about reforms? We are positive on FDI and tax reforms, which are GOIs core focus, and expect siz

7、eable FDI improvement (possibly in 2H20) as solutions to FDI pain- points are introduced: (1) Omnibus Laws to remove investment bureaucracies; (2) a lower tax rate; (3) a positive investment list, and (4) higher focus on inviting key target industries (e.g., car battery). Evidence already exists. Th

8、ese lead us to be optimistic beyond 2020.Stock recommendations. SMGR (industry recovery), UNTR/PTBA (6%/14% dividend yield), MDKA (gold and copper exploration), ASII (fundamentals bottoming in 2019), and MAPI (top preference for consumer sector). We reiterate UNDERPERFORM on BBRI on lofty valuation

9、amid consensus high earnings expectations. Our JCI 2020 Index target is 6,500, assuming 8% EPS growth; our concern remains consensus high EPS expectations.DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF N

10、ON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as o

11、nly a single factor in making their investment decision.Focus chartsFigure 2: CS Indo Four Factors Early Economic Indicators (CS 4EEI)pointtoimprovementin2020EFigure 3: Market revenue and ex-commodities revenue vs nominalGDP2019seesrevenuedeceleration129 129134 129 129134 143 132 136 148157148155100

12、87101 33 38 42 454647 51 56 59 6325 24 26 16 19 24 27 27 28 28 31 28 3110254017 2712 351936 34 33 28 26 30 34 31 3127 36 46 37 34 37 31 34 39 35 30 301601401201000Fiscal FDI EXIMCommodity18%16%14%12%10%8%6%4%2%0%13%12%11%10%9%8%7%6%5%1Q142Q143Q144Q141Q151Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q

13、161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q19Market RevenueMarket Revenue- LHSMarket excl. Commodities-LHSNominal GDP -RHSSource: Statistics Agency, the BLOOMBERG PROFESSIONAL service, Credit Suisse researchSource: Company data, the BLOOMBERG PROFESSIONAL service, Credit Suisse researchFigure4:JCIs

14、forwardP/EisslightlybelowaverageFigure5:However,JCIs2020EPSexpectationsremainhigh1812M fwd P/E Current:Avg.:14.8x1712M forw ard P/E (x)1612M forw ard P/E (x) 4320%-1%-2%-3% 15 14 13 12Jul-13 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 JCI EPS (Rp)JCI EPS (Rp)20182020E-4%396383396383-5%372372365

15、-8-6%-7%-8%-9%JCI IndexEstimatesJCI IndexEstimatesEstimatesCons. -Source: the BLOOMBERG PROFESSIONAL service, Credit Suisse researchSource: the BLOOMBERG PROFESSIONAL service, Credit Suisse estimatesFigure6:9M19vs9M18marketearningscommoditiesweaknessdrovedownmarketprofits245 4.42.1 0.1 0.4 2.9230 0.

16、0 0.1 3.1255Net profit (Rp tn)245Net profit (Rp tn)2352252159M18ABANKSTELCO & TOWERSCOAL RELATEDMETALSOIL & GASPLANTATIONSPOULTRYPULP & PAPERPETROCHEM.AUTOMOTIVECONS. DISCR.CONS. STAPLESMEDIACEMENTIND. ESTATEINFRAPROPERTYHEALTHCARESHIPPINGTOUR. & TRANS.9M19A2059M18ABANKSTELCO & TOWERSCOAL RELATEDMET

17、ALSOIL & GASPLANTATIONSPOULTRYPULP & PAPERPETROCHEM.AUTOMOTIVECONS. DISCR.CONS. STAPLESMEDIACEMENTIND. ESTATEINFRAPROPERTYHEALTHCARESHIPPINGTOUR. & TRANS.9M19ASource: Company data, the BLOOMBERG PROFESSIONAL service, Credit Suisse researchTable of Contents HYPERLINK l _TOC_250013 2020:Externalities-

18、dependentgrowth4 HYPERLINK l _TOC_250012 3Q19: Fundamentals continue to decelerate4 HYPERLINK l _TOC_250011 CS 4EEI Tracker: Low 2020 recovery; positive beyond4 HYPERLINK l _TOC_250010 But growth expectations have downside4 HYPERLINK l _TOC_250009 3Q19: Fundamentals continuetodecelerate5 HYPERLINK l

19、 _TOC_250008 CS4EEITracker:Weakbutsmallrecoveryin20209 HYPERLINK l _TOC_250007 CS Indo commodity index weak but small uptick recently10 HYPERLINK l _TOC_250006 Export and import momentum dependent on global trade/China growth12 HYPERLINK l _TOC_250005 FDI: Government commitment leads to better confi

20、dence15 HYPERLINK l _TOC_250004 Tax Reform: Proof of government commitment21 HYPERLINK l _TOC_250003 2020 fiscal spend capacity likely to be utilised23 HYPERLINK l _TOC_250002 Industry high frequency indicators Mixed25 HYPERLINK l _TOC_250001 But growth expectationshavedownside26 HYPERLINK l _TOC_25

21、0000 CS 2019/2020 JCI target of 6,250/6,500302020: Externalities-dependentgrowth3Q19: Fundamentals continue to decelerate3Q19 market revenue decelerated further to 2% YoY (from 5% in 2Q19, 7% in 1Q19 and 13% in 2018), as most sectors decelerate. In particular, infrastructure & property revenue decli

22、ned 8% YoY, commodities revenue by 3% YoY, consumer revenue decelerated to +2% YoY (from +6% YoY in 1H19) and telco revenue slowed to +1% YoY (from +9% in 1H19). This is a continuation of the 2Q19 slowdown (See report). 3Q19 Market operating profit (-8% YoY) and net profit (-9% YoY) also declined, l

23、ed by a sharp decline in commodities operating income (-30% YoY) and net profit (-42% YoY). A slowdown is now obvious; the question is for howlong,andwhatarethefactorsthatcancontributetofuturegrowth/deceleration.Ourbase case is a slow growth improvement in 2020 (flat GDP growth of 5.1% YoY).CS4EEITr

24、acker:Low2020recovery;positivebeyondCS Indo 4EEI Tracker suggests the economic pulse is still weak, but we grow increasinglypositiveonreformswhichprovideupsideriskbeyond2020.Weintroduce CS 4EEI that serves as a barometer of Indonesias economic health. These are: (1) eight commodity indices; (2) expo

25、rt and import momentum; (3) foreign direct investment (FDI); and(4) fiscal spending. A small economic recovery in 2020 is likely, due to: (1) bottoming commodity prices to improve next year, as we have seen in CPO prices, and near all-time low pricinginothercommodities;(2)Indonesiasexportandimportmo

26、mentumtostabilisefollowing a severe deterioration this year; (3) FDI to improve following the governments renewed efforts/policies/tax holiday for investment; and (4) fiscal spend is tracking +5% growth in 2019 (2.1% fiscal deficit to GD), which, at a higher fiscal deficit of 2.6% in 2020, may achie

27、ve +7% YoY or improvement vs 5% in 2019. We note while 2020 implied fiscal deficit at 2.6% seems high and above target of 1.8%-2.2% this is still below the 3% limit, and we think this fiscal deficit capacity will be used as economic cushion similar to the 2015-2016 period.But growth expectations hav

28、edownsideUnfortunately, 2020 growth expectations are not low. YTD, we have seen JCI 2019 EPS expectations cut from 12% YoY growth to 3% currently (driven by pulp and paper, poultry, agriculture, coal sectors), but it is likely still high vs CS Market 2019 annualised net profit of-1% YoY. Additionall

29、y, 2020/21 JCI EPS growth expectations are still high, at 13%/15% YoY, suggesting earnings are expected to see a sharp rebound vs the historical five-year average of 6% EPS growth. Either consensus knows something we do not, or analyst estimates are lagging. Sector-wise, we believe what goes into hi

30、gh forward earnings expectations lies in the banking sector. We believe a more realistic JCI earnings level should be 8-9% for both years, or nearer to a nominal GDP level of 8% (5% GDP, 3% Inflation).CS2019JCIIndextargetat6,250(previously6,500),introducing2020targetof6,500. From the corporate earni

31、ngs trend and macro indicators (fiscal, trade, FDI) it feels similar to when we were entering 2016when deceleration, owing to currency adjustment, happened in 2015, continuing in 1H16, before rising coal prices and infra spend helped support the economybut hopes of a commodities price rally amid wea

32、k global growth remain fragile.Our 2020E JCI is based on forward EPS growth of 8% in 2020E/2021E, after a flat EPS in 2019. We assign 15x/14.5x multiples for 2019E/2020E. Stock-wise, we are less sector-focused, preferring to pick where opportunities present themselves through pricing mismatches with

33、 earnings expectations. Hence, we recommend the continued industry recovery story (SMGR), strong companies with low expectations (UNTR, PTBA). MDKA, a gold miner with deep-value exploration prospects of its copper deposits. ASIIs fundamentals are likely to bottom out in 2019, while MAPI is our top p

34、reference for the consumer sector. We continue to recommend investors to trim BBRI given its relatively high valuation and challenged growth expectations. Sector-wise, we recommend investors avoid banking in 2020, primarily due to still-high expectationsforloangrowthandearnings.Despiteourseeminglyme

35、diocreupsideforJCIIndex in 2020 year-end, we are increasingly more optimistic towards longer term 2021-2024, largely on better reform confidence.3Q19 market revenue/operating profit/net profit decelerated to +2%/-8%/-9% YoYCS 4EEI consists of (1) 8 commodity indices;(2)ExportandImportmomentum;(3)For

36、eign DirectInvestment;and(4)Fiscalspending;we highlightourincreasingconfidenceonFDIdue to recent government reforms and await for moreevidenceofasurgebeforeturningmore optimistic2020/21JCIEPSgrowthexpectationsarestill high at 13%/15% YoY, respectively, suggesting earnings are expecting a sharp rebou

37、ndvshistoricalfiveyearaverageof6% EPSgrowthOur JCI Index target for 2020 is based on ForwardEPSgrowthof8%in2020and2021, after a flat growth in2019DespiteourseeminglymediocreupsideforJCI Index in 2020 year-end, we are increasingly more optimistic towards longer term 2021- 2024,largelyonincreasingrefo

38、rmconfidence3Q19:Fundamentalscontinuetodecelerate3Q19 market revenue decelerated further to 2% YoY (from 5% in 2Q19, 7% in 1Q19 and 13% in 2018). Most sectors have observed revenue deceleration, infrastructure revenue contracted -8% YoY following construction order book misses and election disturban

39、ce. Commodities revenue at -3% YoY is the first negative revenue quarter since commodities price corrected in 2018, suggesting there will be more revenue deceleration given base effect. Consumer revenue decelerated (+2% YoY from +6% YoY in 1H19), Telco revenue at +1% YoY from +9% in 1H19), in which1

40、H18 base was easier comps. Only banks seem to still have resilient top-line growth; however; a substantial proportion of banks income is due to non- interest income, or of a lower quality than loan interest income.Commodities 3Q19 revenue at -3% YoY is the first negative revenue quarter since commod

41、ities price corrected in 2018, suggesting there will be more revenue deceleration given base effectFigure7:SectorrevenuegrowthtrendsSector201420152016201720181Q182Q183Q184Q181Q192Q193Q19CommentsBANKS21.3%10.6%7.2%5.4%7.1%5.2%3.1%6.6%13.5%10.2%9.0%11.2%Fee income helped revenue growthTELCO & TOWERS8.

42、2%10.4%10.0%8.8%-1.3%0.6%-6.3%0.9%-0.3%7.9%9.8%1.3%Slowdown post low base 1H18COMMODITIES1.7%-7.0%0.6%28.0%27.8%26.7%28.3%35.4%21.7%6.3%6.0%-2.8%Commodity price declineCOAL RELATED-14.3%-7.7%-8.0%38.3%47.2%54.3%40.5%57.0%39.0%6.4%7.9%-10.1%METALS0.3%-2.2%-13.5%30.1%59.6%89.2%96.0%65.6%20.7%26.7%46.7

43、%32.9%OIL & GAS11.0%-1.7%-10.0%27.1%22.6%20.2%28.4%35.2%13.4%3.1%8.7%7.4%PLANTATIONS27.6%-12.0%5.7%20.3%-2.4%-17.1%-2.0%8.0%2.9%0.9%-7.8%-13.1%POULTRY13.3%2.8%18.2%19.6%12.2%6.5%10.7%12.7%18.6%17.8%10.4%3.7%PULP, PAPER, AND PACKAGING12.6%12.2%-3.1%13.4%15.5%16.1%23.8%17.8%5.9%0.5%-1.6%-4.8%PETROCHEM

44、ICAL11.3%-36.5%39.1%33.3%16.1%11.7%16.7%22.0%13.6%-7.9%-20.6%-14.3%CONSUMER10.0%3.0%6.0%7.8%11.4%8.6%11.2%14.8%11.0%7.5%4.9%2.3%Decelerating trend acrossAUTOMOTIVE4.3%-7.1%-0.8%10.3%14.4%12.6%13.2%17.7%13.8%6.0%1.9%-1.1%CONSUMER DISCRETIONARY17.6%19.1%12.9%9.6%14.1%14.7%15.1%19.1%8.2%5.1%1.4%2.8%CON

45、SUMER STAPLES13.0%6.0%8.3%5.4%8.3%3.6%8.3%11.2%10.1%9.4%8.5%4.6%MEDIA2.3%2.5%7.2%4.9%8.5%7.1%1.9%13.4%12.8%9.9%10.3%6.1%INFRA & PROP.7.6%4.0%10.9%33.9%7.6%31.4%7.2%3.2%-1.7%-4.9%-13.0%-7.5%Construction orderbook correctionCEMENT6.6%-3.9%-5.4%1.3%9.5%3.2%3.9%7.9%21.4%15.6%13.6%25.1%INDUSTRIAL ESTATE-

46、5.2%7.3%-12.9%-6.0%-2.5%-15.1%-23.2%3.5%15.9%2.2%62.7%-2.7%INFRASTRUCTURE-0.7%12.0%32.2%65.9%11.4%62.9%15.4%0.3%-4.4%-12.6%-23.8%-19.1%PROPERTY25.2%1.8%2.8%14.6%-2.5%5.2%-4.3%7.1%-13.2%-1.9%-13.4%-9.0%OTHERS13.7%9.4%3.6%7.1%15.4%12.8%13.4%14.0%20.8%16.4%13.0%6.8%HEALTHCARE9.2%12.6%21.3%6.2%17.4%15.5

47、%16.8%10.3%27.4%18.2%24.1%17.1%SHIPPING10.6%-6.7%-14.3%4.3%56.4%46.9%56.7%82.8%41.3%34.6%20.0%-4.1%TOURISM & TRANSPORTATION15.2%10.7%1.2%7.6%11.2%9.1%8.7%9.6%16.8%13.8%8.5%5.4%MARKET9.6%3.0%5.7%14.0%13.1%13.6%11.6%15.4%11.8%6.8%4.7%1.6%MARKET EXCL. BANKS7.1%1.1%5.3%16.3%14.5%15.8%13.7%17.6%11.5%5.9%

48、3.7%-0.5%MARKET EXCL. COMMODITIES12.4%6.1%7.1%10.4%8.7%9.7%6.8%9.5%8.7%6.9%4.3%3.2%MARKET EXCL. CONSUMER9.4%3.0%5.6%17.6%14.0%16.4%11.8%15.7%12.3%6.4%4.6%1.3%Most Sectors Showed Decelerating TrendSource: Company data, the BLOOMBERG PROFESSIONAL service, Credit Suisse research3Q19 Nominal GDP growth

49、decelerated to 6%, as per data published by BPS, Indonesias statistics agency. This trend is in line with our 3Q19 CS market revenue trend which at 2% is near the ten-year low observed in 4Q15. While these are all interesting statistics, we find it challenging to find reliable macro growth factors t

50、hat are not driven by externalities (trade war, commodities price). Where, in the past, among the easier tools of growth has been leverage or continuedglobalgrowthexpansion(translatingtobetterFDIinflowortradedata)orevenhigher fiscal spend, such options have increasingly been less available (system L

51、DR is still high at 94%, fiscalspendingistightenedbyanexpectedslowdowninfiscalrevenue)oraredependentontoo many global factors (trade and commodity prices). We reflect and believe that (1) FDI-related reform is urgent and disappointment in the near term is no longer affordable; (2) the Indonesia mark

52、et has a higher cyclicality versus structural factors. and (3) Indonesia really is highly reliant on “higher powers”, especially one that controls commodity prices. To the first point on FDI, we grew increasingly more confident since the Presidents inauguration and cabinet announcement in the past t

53、wo months (Discussed more on below section “FDI: Government Commitment Leads to Better Confidence”), but would need actual FDI trajectory as proof before turning more optimistic.Figure8:MarketandsectoroperatingmarginsFigure9:Marketrevenueandmarketex-commoditiesrevenue vs nominal GDPgrowth35.0%30.0%2

54、5.0%20.0%15.0%10.0%5.0%BANKS0.0%BANKS28.2%26.6%14.0%11.6%15.5%16.8%18%16%14%12%10%8%6%4%2%0%13%12%11%10%9%8%7%6%5%1Q142Q141Q142Q143Q144Q141Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q183Q184Q181Q192Q193Q19TELCO & TOWERSCOMMODITIESCONSUMERINFRA & PROP.MARKETTELCO & TOWERSCOMMODITIESCONSUMERI

55、NFRA & PROP.MARKETMarket Revenue- LHSMarket excl. Commodities-LHSNominal GDP -RHSMarket Revenue- LHSMarket excl. Commodities-LHSNominal GDP -RHSSource: Company data, the BLOOMBERG PROFESSIONAL service, Credit Suisse researchSource: Company data, the BLOOMBERG PROFESSIONAL service, Credit Suisse rese

56、arch3Q19 market operating profit (-8% YoY) with margin contractions led by banks (NIM pressure) and commodities segments (price pressure), while sectors that saw margin improvements include telco and towers due to the normalisation of the tariff war and previous years “push promo”. Market operating

57、profit declines were led primarily by a sharp decline in commodities operating income (-30% YoY) which generally saw higher volumes from commodities players more than offset by lower prices and per-unit margins. How this trend moves in the future is highly dependent on global growth expectations and

58、 regulatory barriers. CS expects overall lacklustre commodities growth in view of the continued slowdown in global growth. However, we note that some valuations in terms of dividend yield have become attractive. Banks saw NIM contraction too, on a YoY basis, and as such 9M19 net margins declinedmarg

59、inally.Goingforward,bankscontractingmarginsarelikelytocontinueowingtoa combination of weak loan demand, deposit growth tightness and a regulatory move on KUR (Kredit Usaha RakyatIndonesias subsidised micro-loan programme).Figure 10: Sector operating profit growthtrendsSector201420152016201720181Q182

60、Q183Q184Q181Q192Q193Q19CommentsBANKS5.0%-1.5%-1.2%25.3%17.0%15.8%11.0%18.6%21.9% 12.6%5.2%2.7%Continued NIM contractionTELCO & TOWERS3.3%21.0%13.2%9.9%-25.0%-18.5%-35.9%-12.4%-37.8% 15.8%38.0%11.7%Easier cost compsCOMMODITIES-3.9%-17.3%51.3%50.9%34.0%39.1%62.1%45.4%-1.6% -16.9%-28.2%-29.8%Commodity