印尼香烟产业：消费税细节和Q3业绩分布后的预期调整

1、Equity ResearchAsia Pacific | IndonesiaHMSP3.1-2.6-6.0CS-6.3Consensus-6.2CS-4.7Consensus2019E 2020E 2021E2019E 2020E 2021EFigure1:CSvsconsensusestimates(EPSgrowthYoY%)HMSP3.1-2.6-6.0CS-6.3Consensus-6.2CS-4.7Consensus2019E 2020E 2021E2019E 2020E 2021EResearch AnalystsDeidy Wijaya, CFA62 21 255 37902

2、HYPERLINK mailto:deidy.wijaya deidy.wijayaMega Bong62 21 255 37977 HYPERLINK mailto:mega.bong mega.bongIndonesia CigaretteSectorForecastIndonesia CigaretteSectorForecastadjustmentspostreleaseofexcise details and 3Q19resultsTobacco | Sector ForecastSource: The BLOOMBERG PROFESSIONALTM service, Credit

3、 Suisse estimatesOurthree-yearviewonIndonesiacigarettesector.Afterthereleaseof2020excise details, we present our analysis and forecasts for the sector and the impact on HMSPs and GGRMs EPS over the next three years. The steep increase (51.8%) in floor price for Tier 1 SKM products is unprecedentedhe

4、nce the visibility on the cigarette players volume and margins is low, exacerbated by the complex excise structure in Indonesia and multiple types of cigarettes (SKT, SKM FF, SKM LTN, SPM). In conclusion, we forecast 15% decline in industry sales volume, a revival in the SKT segment and a big improv

5、ement in the product-mix of HMSP and GGRM in 2020 as their value brands (which are barely profitable) contributions declined significantly. We estimate a three-year EPS decline for HMSP (FY20-22), while we expect GGRMs net profit growth to decelerate significantly in FY20 before turning negative in

6、FY21-22.Higher EPS risks in FY21 vs FY20. A key difference between our estimates and consensus is in the three-year EPS trajectory for HMSP and GGRM. Consensus expects strong EPS recovery post a sharp decline in FY20. On the contrary, we see a multi-year impact on HMSPs and GGRMs EPS as we expect th

7、e big decline in sales volume of their value brands in 2020 to present a tougher base for comparison (in terms of product-mix). Additionally, we expect less price hike in 2021, as competition is likely to get tougher post the big drop in sales volume in 2020. Hence, we think the EPS pressure in FY20

8、 will not be a one-offthus valuation multiple has to reflect the declining EPS trajectory.Stock calls and key upside risks. We maintain UNDERPERFORM on both HMSP and GGRM but lower our TP for HMSP to Rp1,790 (from Rp1,830) based on 15.5x FY20E/FY21E P/E, while we raise our TP for GGRM to Rp50,625 (f

9、rom Rp47,700) based on 9.7x FY20E/FY21E P/E. Key upside risks include (1) a major change in excise direction 2021 onwards, (2) earnings proving to be more resilient than expected, and (3) inclusion of the stocks (with significant weights) in new key indices.DISCLOSURE APPENDIX AT THE BACK OF THIS RE

10、PORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-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 o

11、f interest that couldFocus charts and tableFigure2:Excisehikevsindustry,HMSP,GGRMsalesvolumeFigure3:HMSPvsGGRMblendedASPincrease18-22Egrowth 17.9 7.76.7 2.923.117.9 7.76.7 2.910.8-1.0-2.514.50.0-15.0-12.0-5.010.5-5.011.7-3.1-3.8 -3.8 -1.0-18.0IndustryHMSPGGRMExcise taxhikeHMSP GGRM20182019E

12、2020E2021E2022E20182019E2020E2021E2022EIndustryHMSPGGRMExcise taxhikeHMSP GGRMSource: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimatesFigure 4: HMSPs and GGRMsGPMFY18-22EFigure 5: HMSPs and GGRMs EPS growthFY18-22E23.924.924.823.221.919.519.919.918.517.129.023.924.9

13、24.823.221.919.519.919.918.54.93.1-2.6-6.0-6.2-4.6-4.2HMSP GGRMHMSP GGRM20182019E2020E2021E2022E20182019E2020E2021E2022EHMSP GGRMHMSP GGRMSource: Company data, Credit Suisse estimatesSource: Company data, Credit Suisse estimates115.8106.997.5101.498.286.1Company namePE (x)2020E 2021EEPS gr

14、owth(%) Div yield (%)2020E 2021EHM Sampoerna17.618.8-2.6-6.0115.8106.997.5101.498.286.1Company namePE (x)2020E 2021EEPS growth(%) Div yield (%)2020E 2021EHM Sampoerna17.618.8-2.6-6.05.75.3Gudang Garam10.010.63.1-Philip Morris International14.96.06.4British American Tobacco8.08.38.7ITC Ltd20.618.519.

15、8Japan Tobacco Inc*12.411.5-6.7KT&G Corp10.19.710.34.04.44.6Simple averageMarket cap weighted average2019E2020E2021EHMSP GGRMHMSP GGRMSource: The BLOOMBERG PROFESSIONALTM service, Credit Suisse estimatesSource:Refinitiv,CreditSuisseestimates,*NotCovered,priceasof1November2019Forecastadjust

16、mentspostreleaseofdetails and 3Q19resultsVolume, margins and earnings impact in FY20We estimate the cigarette industry sales volume to decline by 15% in 2020, with SKM LTN(-25%) and SPM (-30%) segments being hit the most. Meanwhile, we expect a recovery in the SKT segment with its volume contributio

17、n rising to 19.5% in FY20E from 16.6% in FY19E. As consumersstrugglewiththebigincreaseincigaretteprices,weexpectthehighertarsegments to fare better. We forecast 18%/12% sales volume decline for HMSP/GGRM, driven by a hugedeclineinsalesvolumeoftheirvaluebrands(whichwillbeforcedtoincreasepricesby35-45

18、%). Overall, we estimate 2.6% EPS decline for HMSP in FY20, while we estimate GGRM to still register 3.0% EPS growth in FY20 (but a sharp deceleration from FY19 growth), as we forecast flattish gross margins (despite big drop in volume) for both players relative to FY19, driven by a significant impr

19、ovement in segment-mix and product-mix.ProfittodeclineinFY21/22,postbigshiftinproduct- mix inFY20Afterthebigadjustmentinproduct-mixin2020,HMSPandGGRMwillhavetorelyonvolume growthandmarginimprovement(atthebrandlevel)todriveearningsgrowthinFY21-22.We believethisisquiteunlikelytohappen,asthegovernmenti

20、slikelytocontinuetoprioritisepublic healthandcontrolcigaretteconsumptionviaincreasesintobaccoexcise.Atthesametime,the fight for market share is likely to intensify post the sharp drop in sales volume in 2020. We estimate a much lower blended-ASP increase for HMSP/GGRM at 6.7%/6.5% in FY21, vs 17.9%/

21、16.3% in FY20, resulting in a sharp gross margin contraction and a negative EPS growth in FY21. We estimate 6.0%/4.6% and 6.2%/4.2% EPS declines for HMSP and GGRM in FY21/FY22, on 5.0%/3.1% and 3.8%/1.0% volume declines, respectively.Valuationmultipletocontractfurtheronmulti-year outlookIndonesianci

22、garettestocks(especiallyHMSP)havepreviouslyenjoyedhighvaluationmultiple duetothegrowthpotentialofthe cigarettemarketinIndonesia.Between2004and2014,the Indonesiancigaretteindustryregisteredpositivevolumegrowtheveryyear.Wehavenotseen positivevolumegrowthsincethen,butinvestorshaveremainedconfidentonthe

23、longer-term outlook as the weakness in the last few years was likely due to broad-based weakness in consumption. With the big surprises in 2020 excise regulation, however, we believe that the government is now becoming more serious about curbing volume growth. Hence we forecast threeconsecutiveyears

24、ofvolumedeclinefortheindustry.TheIndonesiancigaretteindustryis therefore no longer a growth market and no different from its global peers. Additionally, we expect multi-year EPS pressure for HMSP and GGRM (as opposed to one-off), and hence we believe this should result in further contraction in thei

25、r valuation multiples.Key upside risksMajor change in excise direction 2021 onwards. If the excise hike 2021 onwards is muchlowerthanourestimateorifthegovernmentdecidestoconsolidatetheexcisetiering, the sector outlook could significantly change, impacting the stocks valuationmultiples.Earningsprovin

26、gtobemoreresilientthanexpected.Ifthecompaniesearnings prove to be more resilient than expected, sentiment on the stocks couldchange.Inclusion(withsignificantweights)innewkeyindices.Thiscouldresultininflows into the stocks, thereby boosting their valuation multiples.Volume to decline sharply, but mar

27、gins to sustain(duetobigimprovementinsegment andproduct-mix),resultinginasmalldropin earningsProfit to decline further in FY21/22 as price hike will be less (due to competition), while product-mixfacesamuchtoughercomparison baseValuation multiple to contract further as investors digest volume and EP

28、S growth trajectoryKeyupsiderisksincludemajorchangein excisedirection2021onwards,earnings provingtobemoreresilient,andstocks inclusion in new keyindices.Figure 8: TP and recommendation changesTP (Rp)RecommendationOldNewOldNewHM Sampoerna Gudang GaramHMSP.JK GGRM.JK1,8301,79047,70050,625UNDERPERFORMU

29、NDERPERFORMSource: Credit Suisse estimatesFigure 9: Tobacco peers comparisonCompany nameCSTickerCurrencyCPUp/downMarket cap(USDmn)2019EPE (x)2020EEPS growth (%)2019E 2020E 2021EDiv yield (%)2019E 2020E 2021ETP(%)RatingHM SampoernaHMSP.JKIDR2,1001,790-14.8U17,37917.217.618.84.9-2.6-6.0Gudang GaramGGR

30、M.JKIDR53,65050,625-5.6U7,34510.310.010.629.03.1-5.7Philip Morris InternationalPM.NUSD8180-1.8U126,71015.814.96.4British American TobaccoBATS.LGBp2,7024,03549.3O80,3008.38.06.18.08.38.7ITC LtdITC.BOINR25833028.1O44,61725.320.618.514.919.810.82.02.93.2Japan Tobacco Inc*2914.TJPY2,428NC-39,88011.912.4

31、11.5-5.6-6.56.7KT&G Corp033780.KSKRW101,000113,00011.9N11,8927.310.34.0Simple averageMarket cap weighted average14.513.46.5Source: Company data, Credit Suisse estimates for covered companies, price as of 1 November 2019. (* not covered by CS)Figure 10: Summary of our thesisTickerSummary of

32、 thesisWhere we differ vs consensusHMSPWe believe that HMSP is facing structural headwind as the government increases emphasis on public health and excise revenue. We believe, the more challenging fundamentals combined with unsupportive flows (in the form of much lower weighting in JCI and LQ45 indi

33、ces and increasing ESG mandates from foreign investors) will result in continued pressure on the stock price in the next few years. As investors digest the possibility of HMSP registering several years of EPS decline (as opposed to a one-off in FY20), its valuation could de-rate further, in our view

34、.The key difference between our and consensus estimates is the three-year EPS trajectory. Consensus expects a strong EPS recovery post a sharp decline in FY20. But we see a multi-year impact on HMSPs and GGRMs EPS as we expect the big decline in sales volume of their value brands in 2020 to present

35、a tougher base for comparison (in terms of product-mix). Additionally, we expect less price hike in 2021 as competition is likely to get tougher post the big drop in sales volume in 2020. Hence, we think the pressure on FY20 EPS will not be a one-off, and thus valuation multiple has to reflect the d

36、eclining EPS trajectory.GGRMWhile we expect a strong EPS growth in FY19 (29.0%) and still-positive EPS growth in FY20 (3.1%), we remain cautious on GGRM. Historically, GGRMs share price has been sensitive to excise direction, and we dont expect a positive outcome on excise over the next few years as

37、 the government increases emphasis on public health and excise collection. We expect GGRM to outperform the industry due to its dominance in the SKM FF(high-tarsegment).Butwiththeunsupportiveregulatoryenvironment,we still expect GGRMs EPS to start declining FY21 onward, post the one-time big shift i

38、n product-mix in FY20E.The key difference between our and consensus estimates is the three-year EPS trajectory. Consensus expects a strong EPS recovery post a sharp decline in FY20. But we see a multi-year impact on HMSPs and GGRMs EPS as we expect the big decline in sales volume of their value bran

39、ds in 2020 to present a tougher base for comparison (in terms of product-mix). Additionally, we expect less price hike in 2021 as competition is likely to get tougher post the big drop in sales volume in 2020. Hence, we think the pressure on FY20 EPS will not be a one-off, and thus valuation multipl

40、e has to reflect the declining EPS trajectory.Source: Credit Suisse estimatesFigure 11: HMSPs earnings revisionHMSP (Rp bn, %)OldNewChanges2019E2020E2021E2019E2020E2021E2019E2020E2021ESales vol growth-0.6%-8.5%-3.9%-2.4%-18.0%-5.0%-1.8-9.5-1.1ASP growth2.5%15.4%8.4%2.4%17.9%6.7%-0.12.6-1.7Revenue108

41、,976115,006119,752106,897103,467104,903-1.9%-10.0%-12.4% growth0.1-3.21.4Gross profit27,17026,17325,36026,60825,61724,367-2.1%-2.1%-3.9% growth6.6-3.7-3.14.4-3.7-4.9Operating profit18,05816,89615,95117,60316,87215,614-2.5%-0.1%-2.1% growth7.0-6.4-5.64.3-4.2-7.5Net profit14,55313,84413,24214,20713,84

42、313,009-2.4%0.0%-1.8% growth7.5-4.9-4.44.9-2.6-6.0MarginsGross margin24.9%23.2%21.5%24.9%24.8%23.2%0.01.61.7Operating margin16.6%15.2%13.8%16.5%16.3%14.9%-Net margin13.4%12.4%11.3%13.3%13.4%12.4%-0.11.01.1Source: Credit Suisse estimatesFigure 12: GGRMs earnings revisionGGRM (Rp bn, %)OldNewChanges20

43、19E2020E2021E2019E2020E2021E2019E2020E2021ESales vol growth10.8%-4.3%-2.7%15.0%-12.5%-3.3%4.2-8.2-0.6ASP growth2.3%14.3%8.2%3.0%16.3%6.5%0.71.9-1.8Revenue107,783118,197124,761112,394115,026118,7894.3%-2.7%-4.8% growthGross profit21,03421,44221,61422,40822,90721,9686.5%6.8%1.6% growth20.22.2-4.1Opera

44、ting profit12,86112,78912,79414,02814,41113,4029.1%12.7%4.8% growth15.9-0.60.026.52.7-7.0Net profit9,1839,1799,28510,05010,3649,7229.4%12.9%4.7% growth17.90.01.229.03.1-6.2MarginsGross margin19.5%18.1%17.3%19.9%19.9%18.5%Operating margin11.9%10.8%10.3%12.5%12.5%11.3%Net margin8.5%7.8%7.4%8.9%9.0%8.2

45、%Source: Credit Suisse estimatesVolume,marginsandearningsimpactin FY20Cigarette sales volume to decline by 15% in FY20ESteep increases in excise and floor prices of SKM productsTobacco excise is set to increase by 23% in 2020, with the SKM (25.4% for Tier 1) and SPM (26.4% for Tier 1) segments seein

46、g a steeper increase compared to SKT (13.8-16.4% for Tier1) segment. The increase in 2020 is much steeper than in the last 15 years. Furthermore, the minimum HJE for Tier 1 SKM and SPM segments also increased significantly (50%). This will significantlyreducetheaffordabilityofcheapcigarettes(whichha

47、sbeensupportingvolumeover the last few years), in our view, and hence we expect a sharp volume decline in FY20. Overall, we forecast the industry sales volume to decline by 15.0% YoY in 2020.Figure 13: Tobacco excise details per segment2016201720182019202020162017201820192020CategoryProduction scale

48、(sticks/year)Excise/stick (Rp)Excise increases YoYSKM(Machine - rolled)TIER I3bn48053059059074015.7%10.4%11.3%0.0%25.4%TIER II3bn34036538538547011.5%7.4%5.5%0.0%22.1%30033537037045513.2%11.7%10.4%0.0%23.0%SKT (Hand - rolled)TIER I2bn32034536536542510.3%7.8%5.8%0.0%16.4%24526529029033011.4%8.2%9.4%0.

49、0%13.8%TIER II0.5-2bn15516518018020010.7%6.5%9.1-16.1%0.0%11.1%14015512.0%10.7%TIER III 0.5bn901001001001105.9%11.1%0.0-25.0%0.0%10.0%80800.0%0.0%SPM (White cigarettes)TIER I3bn49555562562579016.5%12.1%12.6%0.0%26.4%TIER II3bn30533037037048513.0%8.2%12.1%0.0%31.1%25529035535547015.9%13.7%22.4%0.0%32

50、.4%Source: Ministry of Finance, Credit Suisse researchFigure 14: Minimum HJE details per segment2016201720182019202020162017201820192020CategoryProduction scale(sticks/year)Minimum HJE/stick (Rp)Minimum HJE increase YoY (%)SKM(Machine - rolled)TIER I3bn=1,000=1,120=1,120=1,120=1,70025.0%12.0%0.0%0.0

51、%51.8%TIER II3bn7408208958951,27525.9%10.8%9.1%0.0%42.5%590-740655-820715-895715-8951,020-1,27515.5-25.9%10.8-11.0%9.1-9.2%0.0%42.5-42.7%SKT (Hand - rolled)TIER I2bn1,1151,2151,2601,2601,46035.2%9.0%3.7%0.0%15.9%775-1,115860-1,215890-1,260890-1,2601,015-1,46027.9-35.2%9.0-11.0%3.5-3.7%0.0%14.0-15.9%

52、TIER II0.5-2bn605730=470=470=53545.1%20.7%N/A0.0%13.8%430-605470-73011.7-45.1%9.3-20.7%TIER III 0.5bn=400=465=400=400=45039.9%16.3%N/A0.0%12.5%=370=40029.4%8.1%SPM (White cigarettes)TIER I3bn=930=1,030=1,130=1,130=1,79013.4%10.8%9.7%0.0%58.4%TIER II3bn8009009359351,48553.8%12.5%3.9%0.0%58.8%505-8005

53、85-900640-935640-9351,015-1,48518.8-53.8%12.5-15.8%3.9-9.4%0.0%58.6-58.8%Source: Ministry of Finance, Credit Suisse researchFigure15:Excisehikevsindustryvolumegrowth(FY10-21E)14.014.610.79.810.010.710.110.810.50.02.0-2.6-3.8-15.0-5.08.23.9-0.20.01.6-1.47.914.014.610.79.810.010.710.110.810.50.02.0-2.

54、6-3.8-15.0-5.08.23.9-0.20.01.6-1.47.92010201120122013201420152016201720182019E 2020E 2021E 2022EExcise tax hikeYoY(%)Sales volume growthYoY(%)Source: Ministry of Finance, Company data, Credit Suisse estimatesValue brands of HMSP and GGRM to experience the biggest hit in volumeHMSPs and GGRMs value b

55、rands will see the biggest volume impact as they will be forced to increase price the most (30%), while their consumers are more price-sensitive. We see some downtrading potential from these Tier 1 value brands to Tier 2 SKM products given the much- lower floor prices for Tier 2 vs Tier 1. Additiona

56、lly, the high new minimum HJE will limit the success of new product launches by Tier 1 players, as they cannot attract consumers to try the new products based on price alone anymore. Overall, we forecast HMSP to register 18% volume decline in FY20 vs 12% for GGRM. We forecast a lower decline for GGR

57、M, given its currently better volume trajectory (+15%, vs -3.2% for HMSP in 9M19) and a much-higher low-tar (mild) exposure for HMSP which we believe will be the worst hit segment along with SPM in 2020.Figure 16: Value brands of Top 3 playersVolumecontribution to companyCurrent Retail Price/stickMi

58、nimum retail price in 2020Required Price HikeHMSPDSS Magnum Mild14-16%1,0001,44544.5%Sampoerna U Mild5%1,1801,44522.5%Philip Morris Bold1%1,0831,44533.4%GGRMSurya Pro8-10%1,0461,44538.1%GG Move35%in2020).Also,wedontexpectHMSPandGGRMtobenefitfrombetterproduct-mix in2021and2022(afterthebigshiftin2020)

59、.These,coupledwiththelowerpriceincreasefor thepremiumbrands(duetolowerexcisehike),shouldresultinlowerblendedASPhikein2021 and 2022. We estimate 6.7%/7.5% for HMSP and 6.7%/7.7% for GGRM in FY21/22E.Volume decline much lower in FY21/22EGiven much the lower excise hike (and hence price increases), we

60、expect industry volume to decline much less (5.0%/3.8%) in FY21/FY22we forecast 5%/3.8% volume decline for HMSP and 3.3%/1.2% domestic volume decline for GGRM. We estimate higher revenue growth in FY21-22 vs FY20 for HMSP and GGRM.Figure35:Industry,HMSP,GGRMsalesvolumegrowthFigure36:RevenuegrowthHMS