HERO 2014

HERO.JK 2014

The company is a foreign investment which has been operating in indonesia since 1971. Its head quarter is located in Tangerang, the company operates in various retail business include Supermarket, Hypermarket, minimarket and specialty retail. The top brand of the company are Guardian, Giant, star mart and HERO. Its top brand generally operates in large format of retail business which has been running over indonesia, such as hypermart and hero supermarket. Its specialty store segment such as guardian, operates in healthcare segment and beauty segment.

The company is owned by Mulgrave Corp BV with more than 64 % of total shares; meanwhile the dairy farm company limited has more than 17 %.

In 2014 the sales growth was 13.2 % up compared to sales in 2013. The company was able to maintain stable gross margin during period of 2013-2014. In 2014 the profit margin decreased as the company should increase expense such as wages, advertising and promotion, transportation cost and etc. in 2014 the company did not has long term loan, it has paid the debt amounted to 2,8 trillion in 2013. The debt might be used for financing the expansion of stores.

In 2014, the company added 24 branched in domestic and the company was also opening new segment in furniture, the company opened its first IKEA store in indonesia. Giant had expanded to several cities at outside java island, the challenge on its expansion was less supply of electricity. As result of that the business plan was not able to be implemented soon. It should fit with the environment factor such the availability of power plant.

In 2014 the company operated 706 stores: 55 Giant extra, 165 hero supermarket and Giant express, 341 guardian and 145 star mart.

The first IKEA store was located in alam sutera at tangerang city, the store has capacity more than 35,000 square meter and the 1200 parking spaces is available for visitor. As the owner of first IKEA store in indonesia the company was optimistic to capture demand of good quality furniture product.

Pertamina 2014

Analysis

Pertamina is an oil, gas and geothermal state owned company. The company is not listed in Jakarta Stock exchange, but government decided to use independent auditor for auditing Pertamina. However, the company had acquired such portion of share of Elnusa, Oil Company which has been listed in stock exchange.

The company operates in both domestic and oversea at upstream sector until downstream sector in oil, gas and geothermal industry. The company and its group were participating in oil and natural gas joint venture at Algeria, Vietnam, Libya, Malaysia and Iraq. 90 % of revenue was achieved from domestic operation, revenue from abroad operation was only participating 10 % of total income.

In 2013 and 2014 the company had deferred employee benefit cost amounting to USD 2.9 billion; it was adjusted as equity account in those years. It was adjusted since 2003.

Almost 95 % of total revenue was collected from downstream segment; the upstream sector was only contributing 5 % of total sales. That means the company is more concerned in downstream. The company subsidiary in many segment, even in hospital and healthcare, hotel and air transportation.

Decrease in sales of 2014, was occurred to the lower subsidy from the government. The fund was recorded as part of revenue in that year.

In 2014, dana pensiun pertamina acquired 17.1 % share of elnusa tbk, Pertamina has 41.1 % share at Elnusa Tbk. 

Sumber Alfaria Trijaya AMTR 2014

Background

Based on central statistic bureau of indonesia, the average monthly expenditure per capita for food product in 2014 was 356,435 per person. If we calculate the expenditure of entire population of indonesia the calculation is IDR 365,435 x 252,2 million = IDR 97,94 trillion. That mean the whole population had spent more than IDR 97 trillion a month for food.

The number is possible not 100 % accurate with the real spending. But it could be used as a supposition.

AMTR

The company was established on 1989, based on Notarial deed no. 21 dated February 22, 1989. The company is engaged in retail distribution of consumer product. The company started to build mini-market networks since 2002, the networks comprises its own mini-market and franchise agreement. In 2014 the company had 6.939 units direct ownership networks and 2.922 units franchise agreement.

The company has subsidiaries both in domestic and oversea. Alfamart Retail Asia pte Ltd is its subsidiary in Singapore which has been operating in retail distributor of consumer product. The other subsidiaries are Midi Utama Indonesia, Sumber Indah Lestari (SIL) and Sumber Medika lestari (SML).

SIL and SML are operating in medical segment, trading of medical equipment and pharmacy respectively.

Sumber Alfaria Trijaya Tbk is owned by Sigmantara Alfindo, with 54.02 % share. The company had rental agreements with its clients for rent its stores and buildings. The cost is paid in advance for period of 12 months until 240 months. Once the rental agreement is expired, the company usually does the renewal of the agreement.

\The rental cost is amortized in its operation costs; in 2014 the amortization of prepaid rent in selling and distribution expense was IDR 535,729 million. And the amortization of prepaid rent in general and administrative expense is IDR 9,833 million.

In 2014 the company seemed advance its long term loan, the company increased its networks both its direct ownership and franchise agreement. In 2014 the direct ownership was advanced from 6,051 units in to 6,939 units and in 2013 its franchise agreement was advanced from 2,506 units in to 2,922 units. As the result of that the company was able to raise its revenue more than 19 % up in 2014 compared to its revenue in 2013. The number of direct ownership mini-market is greater in its quantity than number of franchised mini-market.

71 % of total income in 2014 was dominated by food product, consumer may possibly prefer to purchase food product in mini-market than in conventional shop. In 2013 the portion of revenue of food product was 70.5 %.

JASA MARGA 2014

Macroeconomic

Infrastructure development might be as the key driver of the economic growth in 2015, Government has spent its majority of the fund for developing infrastructure project such as toll road, highway road, bridge, energy plantation, sea port and air port.

Based on data of ministry of finance, the economic growth in the fourth quarter of 2015 had been better in the same period in 2014, it was 5,04 % and it was higher than the growth in 2014 which stood at 5.02%. That may be as good indicator of improvement in economic growth. and it is expected accelerate at higher growth in 2016.

Industry

In 2010-2014 the construction industry accelerated more than 7.2 % at 2010 constant market price (source:Bureau of Indonesian statistic in 2015) . Construction is connected with the development of infrastructure, if government carries on many infrastructure projects there will be many contractor that will be participated.

Company Analysis

Jasamarga is state owned company that operates in toll road sector, the company is managing the toll road includes conducting its maintenance. The company is also establishing toll road in indonesia and Bangladesh ( 10 % share at Marga Net One Limited. 

Jasamarga has many subsidiaries in indonesia and joint venture in both domestic and abroad. The company holds many toll concession roads at many places at indonesia. The duration of the concession is between 35 – 40 years. There are more than 20 toll roads in indonesia which are managed by the company.

The biggest asset of the company is its concession of the toll road that is recorded as the intangible asset; the company used debt and equity to finance the establishment of the toll roads. In 2014 the toll concession road was more than 78 % of total asset.

In 2014, the average of its revenues is approximately 349 billion rupiah on each toll annually. Jakarta-Cikampek is the biggest contributor of its revenue in 2014. The revenue of 2014 declined compared to its revenue in 213. The decline was occurred because of decrease in construction revenues, the company might establish just few number of new toll project in 2014.

In 2014 the economic growth slowdown compare to 2013, The SBY administrations prepared to end their regime.

Ciputra Property 2014

Industry and household expenditure

In between 2010 – 2014 the compound annual growth of real estate industry was more than 6.6 % (at 2010 constant market price). The industry is still growing because the demand of residence, shopping center and apartment may be higher than those supplies. In 2014 several companies in real estate and property were growing in double digit. They were Lippo Karawaci, Greenwood, Ciputra property and etc.

However, there are few companies which experienced a decline in its revenue at 2014 such as Bakrieland and development.

In addition the household expenditure of restaurant and hotel in 2014 seemed advancing in between 2010-2014, the CAGR of the period was approximately 6 %. Household may advance its expenditure for spending more in the future due to the increase of income per capita.

Company Analysis

Ciputra property is a subsidiary of Ciputra development which concerns in shopping center lease segment. As a lessor, Ciputra property had more than IDR 4.148 trillion as its aggregate amount of future minimum lease payments for each period under operating lease in 2014. Term of agreement generally is set up for range of 1-20 years. The lessee has to pay 10% - 50 % of total rental fee to the lessor .

Ciputra development Tbk owns 58 % of company’s total share. Ciputra group was founded by Ir. Ciputra, an Indonesian tycoon who has been operating in property sector more than two decades.

As a lessor the company has good expertise in find suitable place for establishment of shopping center or mall. For the future development the company may decide to invest in Bali and Jakarta.

Based on its financial report, the land for development of the company was located in two locations in indonesia, those were at Bali and at Jakarta which were 377 thousand square meter and 14.7 thousand square meter.

In 2014 the biggest revenue of the company was achieved by residence segment that was amounting to IDR 553 billion in 2014 or more than 33 % of total income. The second was contributed by shopping center lease segment with more than 30 % of total revenue. Segment of shopping center lease was able to give high gross profit; its gross margin was 63 % in 2014, it was higher than residence segment in same period.

Ciputra property has many agreements with reputable brand in hospitality and mall such as rafles, Indo pacific Sheraton, Swiss Bell Hotel, AIMI, Star wood asia and etc.

LPKR: Lippo Karawaci Tbk 2014

Company Analysis

Lippo Karawaci is one of biggest company which operates in real estate, hospitality, infrastructure and healthcare in indonesia. The company is owned by Pacific Asia holding (18.12 %), Metropolis Propertindo Utama (5.32%) and Public. It is the part of Lippogroup which operates in many others segments such as media, fashion and banking.

Lippo Karawaci has famous icon in real estate, hospitality and health care such as Kemang village, Saint moritz, Siloam and arya duta. All of them was reputable product and highly branded product.

Lippo group was founded by Indonesian tycoon, Mr. James Riady and Mochtar Riady. They have global networking in USA, Lippo North America who operates in energy sector and property sector. At recent, the third generation, Michael Riady, is commencing to replace his parent in managing Lippo group.

In 2014 Lippo Karawaci was led by Mr. Ketut Budi Wijaya who has been fulfilling as president director, for president commissioner position was fulfilled by Mr. Theo L Sambuaga.

Revenue

In 2014 Lippo Karawaci was able to increase its revenue, it increased more 74 % up compared to sales in 2013. The company increased its income on almost of all segment, the biggest contributor was from urban development that is operating in city development and its facilities. The second was contributed by healthcare segment.

In 2014 there were 14 projects on progress; the values of projects were more than IDR 1,655 billion. There were Lippo Cikarang’s projects and Mandiri Cipta Gemilang’s projects

In 2014 the company increased its debt to finance projects in several places, the new project could increase net profit margin from 23.89 % in 2013 in to 26.90 % in 2014. As the result of that the return of equity increased. 

FPNI: LOTTE CHEMICAL TITAN

Company analysis

The company produced polyethylene both for domestic client and oversea client. Based on its annual report, more than 16 % of total revenue came from its related party at Malaysia. In 2014, it was only 16 % of revenue came from client at oversea. Lotte Chemical Titan purchased its raw material both from supplier at domestic and supplier at abroad. Chandra Asri Petrochemical is one of domestic suppliers that supply more than 10 % of total material.

In 2014 the company increased its revenue 6 % up compared to revenue in 2013. The customers that had more than 10 % of total net revenue were Bukit Mega Masabadi and Lotte Chemical Titan Sdn Bhd. Both of Bukit Mega Masabadi and Lotte Chemical Titan Sdn Bhd had increased its purchase in period of 2013-2014 respectively from 15.78 % in to 17.58 % and from 7.87 % in to 10.23 %.  

Lotte Chemical Titan International Sdn Bhd owns more than 95 % of total share. The remained share is owned by public. Yoon Sung Ku is fulfilled the position of president director at the company. He is a Korean citizen who has experience in petrochemical industry.

Polyethylene is used for producing agriculture film, flexible packaging, fishnets, tarpaulin, clean water pipe, jerry cans, cosmetics and food grade bottle. The end product application is related with others industries such as food and beverage and agriculture. Polyethylene is categorized as polyolefin products, polyolefin comprises polyethylene and polypropylene.

In polyolefin market, Chandra asri petrochemical revenue was more than USD 1,302,846 thousand in 2014, it was bigger than LCT which was only having revenue amounting to USD 619,804 thousand.