20151109-Maybank_KERPL-Bolstering_handset_business_11页_510kb

报告摘要

Erajaya Swasembada (ERAA IJ) Summary

Core Content

Erajaya Swasembada (ERAA IJ) is an Indonesian telecommunications company with a current share price of IDR610 and a target price of IDR800, indicating a potential increase of 31%. The company's market capitalization is USD130M, and its average daily trading volume is USD0.4M. The document outlines the investment analysis and outlook for the company, including revenue, earnings, and margin forecasts, and maintains a "BUY" rating despite margin pressures.

Main Points

Market Share Growth: ERAA is expected to increase its handset market share from 32% to approximately 37-40% by the end of FY15, driven by less competition and retail expansion.
Revenue Forecast: The revenue for FY15-17F is projected to grow by 20%, 26%, and 29% respectively, with the main driver being higher handset volume and ASP.
Earnings Forecast: Despite a 6% cut in FY15 earnings, earnings for FY16-17F are expected to rise by 1-2%, resulting in an 11% CAGR for FY15-17F.
Margin Outlook: Margin pressure is expected to persist in 4Q15 due to ongoing promotions and discounts, but is anticipated to stabilize in FY16-17F with less competition from Trikomsel.
Inventory Management: ERAA has successfully reduced its average inventory days from 53 in 9M14 to 35 by the end of FY15, which is a positive indicator of improved efficiency.
Valuation Metrics: The target price of IDR800 is based on a DCF model with a WACC of 12.7%, implying a FY16F PER of 9x, which is -2SD from the 3-year historical mean of 20.1x.

Key Financial Forecasts

FYE Dec (IDR b)	FY13A	FY14A	FY15E	FY16E	FY17E
Revenue	12,727.2	14,451.4	18,729.9	21,091.4	23,376.7
EBITDA	533.9	445.4	425.3	484.6	553.6
Core Net Profit	348.6	211.5	219.8	259.0	287.5
Core EPS (IDR)	120	73	76	89	99
Net DPS (IDR)	60	0	20	8	9
Core P/E (x)	5.1	8.4	8.0	6.8	6.2
P/BV (x)	0.6	0.6	0.6	0.5	0.5
Net Dividend Yield (%)	9.8	0.0	3.3	1.2	1.5
ROAE (%)	13.1	7.4	7.2	8.0	8.2
ROAA (%)	7.8	3.8	3.4	3.6	3.6
EV/EBITDA (x)	2.1	3.3	3.2	3.5	3.6
Net Debt/Equity (%)	39.8	47.3	42.0	48.8	53.1

Key Assumptions and Adjustments

Gross Margin: Adjusted to 7.8% for FY15-16F and 7.9% for FY17F, reflecting the company's efforts to clear old inventory.
Handset Volume and ASP: Handset volume is forecasted to grow by 13-14% and ASP by 9%, 12%, and 15% for FY15-17F respectively.
Earnings Growth: The company's core EPS is expected to grow at an 11% CAGR over FY15-17F, with the target price of IDR800 based on this growth.

Market Dynamics

Competition Reduction: The main competitor, Trikomsel, is reducing its distribution channels and retail outlets, which is expected to benefit ERAA by increasing its market share.
Smartphone Migration: There is still significant potential for growth in the smartphone market, with only 32% penetration among total subscribers, leaving room for further expansion.

Operational and Financial Performance

Revenue Growth: In 3Q15, ERAA reported a 46% YoY revenue growth, with 85% of the growth attributed to the handset business.
Inventory Days: Reduced to 39 days from 58 days in 9M14, and expected to decrease further to 35 days by year end.
Net Margin: Fell to 1.2% in 9M15 from 1.8%, due to gross margin compression from the handset business.

Investment Outlook

BUY Rating: The "BUY" rating is maintained due to the company's strong growth prospects in the handset business and potential market share gains from Trikomsel.
Risk Mitigation: Despite margin pressures, the robust revenue growth is expected to offset the impact of lower gross margins.

Share Price Performance

Absolute Return: -0.8% over 1 month, 15.1% over 3 months, and -44.5% over 12 months.
Relative to Index: -3.4% over 1 month, 21.1% over 3 months, and -38.9% over 12 months.

Contact Information

Emanuella Clarissa: (62) 21 2557 1135 | emanuella.clarissa@maybank-ke.co.id
Isnaputra Iskandar, CFA: (62) 21 2557 1129 | isnaputra.iskandar@maybank-ke.co.id

Research Offices

Regional: Sadiq CURRIMBOHY, WONG Chew Hann, ONG Seng Yeow, TAN Sin Mui
Economics: Suhaimi ILIAS, Luz LORENZO, Tim LEELAHAPHAN, JUNIMAN, Suhaimi ILIAS
Strategy: Sadig CURRIMBOHY, Willie CHAN
Malaysia: WONG Chew Hann, Desmond CH'NG, LIAW Thong Jung, ONG Chee Ting, etc.
Hong Kong / China: Howard WONG, Benjamin HO, Jacqueline KO, Ka Leong LO, etc.
India: Jigar SHAH, Anubhav GUPTA, Vishal MODI, Abhijeet KUNDU, etc.
Singapore: Gregory YAR, YEAK Chee Keong, Derrick HENG, Joshua TAN, etc.
Indonesia: Isnaputra ISKANDAR, Rahmi MARINA, Aurelia SETIAPUD, Pandu ANUGRAH, etc.
Philippines: Luz LORENZO, Lovell SARREAL, Rommel RODRIGO, Katherine TAN, etc.
Thailand: Maria LAPIZ, Sittichai DUANGRATTANACHAYA, Sukit UDOMSIRIKUL, etc.
Vietnam: LE Hong Lien, THAI Quang Trung, Le Nguyen Nhat Chuyen, NGUYEN Thi Ngan Tuyen, etc.