Andrey Wijaya, Mutiara Nita - RHB Sekuritas
Link to report: https://research.rhbtradesmart.com/attachments/87/rhb-report-ind_semen-indonesia_company-update_20181203_rhb-569251815422623375c0458a94d2c9.pdf
♦ Maintain BUY on Semen Indonesia with higher DCF-based TP of IDR14,500 (from IDR11,500 and now at high end of consensus) offering 21% upside, implies 29x-25x FY19F-20F P/Es.
♦ Feedback at our recent NDR in KL positive.
♦ Bloomberg reported the company will finance the Holcim Indonesia acquisition via USD1.28bn in debt.
♦ We see the acquisition creating positive synergies such as lower distribution costs.
♦ In our scenario analysis, earnings are set to improve in 2020.
♦ Main risk is intense competition in the cement industry.
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