Research & Stock Picks

Emiten Report

14 December 2023

By

Cement Sector: 11M23 Cement Sales

11M23 Cement Sales

Sales volume growth of +11.3% YoY in Nov-23. Domestic cement sales volume came in at 6.2mn tons in Nov-23 (-2.2% MoM, +11.3% YoY), translating into a cumulative 11M23 figure of 57.8mn tons (+2.5% YoY). The slight MoM decline was mainly caused by the rainy season, which led to logistic delays. Bulk cement sales fell -3.1% MoM, while bagged cement slipped -1.8% MoM. Regarding the 11M23 figures, we noticed that bulk cement sales experienced positive growth, coming in at 16.6mn tons (+11.9% YoY), while bagged cement sales slipped a bit to 41.4mn tons (-0.8% YoY). All areas in Indonesia experienced significant growth in cement sales in Nov-23, both bagged and bulk; bagged cement sales in Java (+10.0% YoY) grew slightly better than outside Java (+9.3% YoY), while bulk cement sales outside Java (+36.1% YoY) experienced much better growth than in Java (+14.8% YoY), supported by the development of IKN.

 

Better margins for INTP. INTP recorded a quite solid sales volume in Nov-23, reaching 1.7mn tons (+3.1% MoM, +24.0% YoY), which translates to cumulative 11M23 revenue of 15.8mn tons (+11.3% YoY). The significant growth was mainly driven by higher demand from Java (partly due to the tax incentives for low-to-mid residential properties), while outside Java, INTP has started to supply bulk cement to IKN and made efforts to increase distribution to their terminals in North Sumatera (Kuala Tanjung), Palembang, and Lampung to cater the demand from Trans Sumatera toll road project. Also, INTP has completed the acquisition of Semen Grobogan for IDR 1.5T, giving the company an additional production capacity of 2.5mn tons/annum (Grobogan’s  sales volume will be consolidated into INTP’s books starting Dec-23). We expect to see the impact of the merger next year , and we project INTP to book a profit margin of 32.0% (FY23F: 31.8%) and an EBITDA margin of 19.7% (FY23F: 19.5%).

 

Update from IKN. According to the Nusantara Capital City Authority (OIKN), most of the key projects and infrastructure development (including the Presidential Palace, toll road, airport, housing, and others) in IKN is going according to plan, with the progress reaching 60.3% by the end of Nov-23, with the expected completion date in 3Q24 (Indonesia’s 79th Independence Day). Most of the cement supply to IKN is brought from regions outside Kalimantan (c.95%). We expect cement demand from Kalimantan will grow at a strong pace until 2030, in line with the government’s plans to build more infrastructure, including digital cities, airports, connecting roads, and other facilities. We project domestic cement sales volume to grow +2-3% YoY in 2023F, and it will continue to grow at a steady pace in 2024F.

 

Maintain NEUTRAL. We reiterate our NEUTRAL rating for the cement sector. We project domestic sales volume will grow +2-3% YoY in 2023F, driven mainly by bulk cement. We have BUY recommendations for SMGR (TP: IDR 7,925; 13.6x FY24F P/E) and INTP (TP: IDR 12,625; 16.6x FY24F P/E). Risks: 1) Fluctuations in cement demand, 2) higher fuel and distribution costs.

Share This:

Cement Sector_14122023 (EN)
Cement Sector_14122023 (ID)

Download PDF

Cement Sector_14122023 (EN)
Cement Sector_14122023 (ID)

More Related

Daily Stock Technical Recommendations

Apr 24, 2024

Daily Report

Apr 24, 2024

Daily Stock Technical Recommendations

Apr 23, 2024

Daily Report

Apr 22, 2024

Daily Stock Technical Recommendations

Apr 22, 2024

Daily Report

Apr 19, 2024

Daily Report

Apr 18, 2024

Daily Stock Technical Recommendations

Apr 17, 2024

Daily Report

Apr 17, 2024

Daily Report

Apr 16, 2024

Daily Stock Technical Recommendations

Apr 16, 2024

Daily Stock Technical Recommendations

Apr 5, 2024

Daily Report

Apr 5, 2024

Daily Stock Technical Recommendations

Apr 4, 2024

Daily Report

Apr 4, 2024

Daily Stock Technical Recommendations

Apr 3, 2024

Daily Report

Apr 3, 2024

Daily Stock Technical Recommendations

Apr 2, 2024

Daily Report

Apr 1, 2024

Daily Stock Technical Recommendations

Apr 1, 2024

Daily Stock Technical Recommendations

Mar 28, 2024

Daily Report

Mar 28, 2024

Daily Stock Technical Recommendations

Mar 27, 2024

Daily Report

Mar 27, 2024

Daily Stock Technical Recommendations

Mar 26, 2024

Daily Stock Technical Recommendations

Mar 25, 2024

Daily Report

Mar 25, 2024

Daily Stock Technical Recommendations

Mar 22, 2024

Daily Report

Mar 22, 2024

Emiten Report

Mar 21, 2024

Daily Stock Technical Recommendations

Mar 21, 2024

Daily Report

Mar 21, 2024

Emiten Report

Mar 20, 2024

Daily Stock Technical Recommendations

Mar 20, 2024

Daily Stock Technical Recommendations

Mar 19, 2024

Daily Stock Technical Recommendations

Mar 18, 2024

Daily Report

Mar 18, 2024

Daily Stock Technical Recommendations

Mar 15, 2024

Daily Stock Technical Recommendations

Mar 14, 2024

Daily Report

Mar 14, 2024

Daily Stock Technical Recommendations

Mar 13, 2024

Daily Report

Mar 8, 2024

Daily Stock Technical Recommendations

Mar 7, 2024

Daily Report

Mar 6, 2024

Daily Stock Technical Recommendations

Mar 6, 2024

Daily Report

Mar 5, 2024

Daily Stock Technical Recommendations

Mar 5, 2024

Daily Report

Mar 4, 2024

Daily Report

Mar 1, 2024

Daily Report

Feb 29, 2024

Daily Report

Feb 28, 2024

Daily Stock Technical Recommendations

Feb 27, 2024

Daily Report

Feb 26, 2024

Daily Stock Technical Recommendations

Feb 26, 2024

Daily Stock Technical Recommendations

Feb 23, 2024

Daily Report

Feb 23, 2024

Daily Stock Technical Recommendations

Feb 22, 2024

Daily Report

Feb 22, 2024

Daily Stock Technical Recommendations

Feb 21, 2024

Daily Report

Feb 21, 2024

Daily Stock Technical Recommendations

Feb 20, 2024

Daily Report

Feb 19, 2024

Daily Stock Technical Recommendations

Feb 19, 2024

Daily Report

Feb 16, 2024

Daily Stock Technical Recommendations

Feb 13, 2024

Daily Report

Feb 13, 2024

Daily Stock Technical Recommendations

Feb 12, 2024

Daily Report

Feb 12, 2024

Daily Stock Technical Recommendations

Feb 7, 2024

Daily Report

Feb 7, 2024

Daily Stock Technical Recommendations

Feb 6, 2024

Daily Report

Feb 5, 2024

Daily Report

Feb 2, 2024

Daily Stock Technical Recommendations

Feb 2, 2024

Daily Stock Technical Recommendations

Feb 1, 2024

Daily Report

Feb 1, 2024

Daily Stock Technical Recommendations

Jan 31, 2024

Daily Report

Jan 31, 2024

Daily Stock Technical Recommendations

Jan 30, 2024

Daily Stock Technical Recommendations

Jan 29, 2024

Daily Report

Jan 29, 2024

Daily Stock Technical Recommendations

Jan 26, 2024

Daily Report

Jan 26, 2024

Daily Stock Technical Recommendations

Jan 25, 2024

Daily Report

Jan 25, 2024

Daily Stock Technical Recommendations

Jan 24, 2024

Daily Report

Jan 24, 2024

Daily Stock Technical Recommendations

Jan 23, 2024