ID - [IPCC IJ]: Robust Outlook, Strong Cash, High Dividend; BUY
Link to report: https://research.rhbtradesmart.com/attachments/40/rhb-report-ind_indonesia-kendaraan-terminal_initiating-coverage_20180907_rhb-54235717411612695b91abb2d8a7e.pdf
♦ Initiate coverage with a BUY and DCF-based IDR2,300 TP, 77% upside, implying 16.5-15.8x 2019F-2020F P/E.
♦ IPCC, Indonesia’s only export and import terminal for vehicles, is set to be the key beneficiary of robust growth in national vehicle production.
♦ Lower fixed costs per unit – from higher sales volume – should boost EBIT margin.
♦ IPCC operates in a captive market for Indonesia’s waterway shipping of 4W vehicles and heavy equipment, as well as covers import, export, and domestic shipments.
♦ Key risk to our call is protectionist policies imposed on international trade.
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