ID - [Cement]: Flat August domestic cement sales
Analyst: Andrey Wijaya
August domestic cement sales reached 6.5m tonnes (+1.8% MoM, +0.6% YoY). On cumulative basis, 8M18 domestic cement sales achieved 43m (+4.3% YoY), in line with our expectation. Domestic cement sales growth were driven by outside Java area and bulk cement sales.
In our calculation, Semen Indonesia market share slightly increased to 39.8% in August (July: 39.1%). Meanwhile, Indocement market share slightly declined to 25.1% (July: 26.4%) since the company started raising its sales price in 3Q18.
Our DCF-based TP on Semen Indonesia is IDR7,300 (19% downside), implies to 15x FY19F P/E; while for Indocement our DCF-based is IDR11,400 TP (45% downside), implies 20x FY19F P/E.
Although cement sales cyclically high in the second-half of the year, we see overcapacity in domestic cement market to sustain in next one year. This condition may intensify competition in industry.
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