Equity Research

Company Update

Tuesday,16 February 2021

Buy Jasa Armada Indonesia(IPCM IJ)

Maintain Expansive mode
Last price (IDR) 366 We had a call with IPCM discussing its current operations and expansion
Target Price (IDR) 425 strategy in 2021. Looking forward, IPCM plans to get more external clients at
Upside/Downside +16.1% private and special use ports. Furthermore, Patimban is poised to be one of
Previous Target Price (IDR) 425 the largest revenue contributors, although the benefits will take several years
to be seen, awaiting optimal commercial use. Regarding the port merger
Stock Statistics rumors, IPCM is still awaiting the official release from the Ministry of SOE. We
Sector PORT maintain our BUY recommendation with a TP of IDR425
Bloomberg Ticker IPCM IJ
Adding more external clients to its portfolio. IPCM is seeking additional clients
No of Shrs (mn) 5,285
from private and special use ports outside Pelindo 2 general ports. This strategy
Mkt. Cap (IDRbn/USDmn) 1,934/139
looks to be paying off, marked by additional clients from Java I power plants in
Avg. daily T/O (IDRbn/USDmn) 2.7/0.2 Jan 21 whereby the company will provide marine services and boat rent,
although the details have yet to be disclosed. The expansion initiative showed
Major shareholders (%)
traction in 9M20 as the consolidated GT hour improved by 62%yoy contributing
Pelindo II 76.9
23.6% to consolidated revenues.
Others 0.1
Estimated free float 12.1 Still awaiting benefits from Patimban. IPCM estimates that the company can
gain benefits from the Patimban port circa 2023 when phase two out of three
EPS Consensus (IDR)
is completed. With phase two, Patimban will have capacity of 3.75mn TEUs and
2020F 2021F 2022F
CBU capacity of 600,000. Patimban is a deep seaport with capacity of 7.5mn
Danareksa 16.6 18.5 23.7
TEUs and 600,000 CBU which will be completed in 2027.
Consensus n/a n/a n/a
Danareksa/Cons n/a n/a n/a No official instruction for port merger yet. IPCM stated that there is no official
instruction for the merger of Pelindo I-IV yet from the Ministry of SOE. IPCM
IPCM relative to JCI Index believes that the plan is still being formulated by the Ministry. Should the
merger go ahead, IPCM believes that the corporate action will have a positive
impact as combined port authorization and permits may support expansion
plans throughout Indonesia.
Relying on recovery from general ports and new initiatives. As social
distancing restrictions ease, we believe the ship flow will normalize in 2021
after the flow of ships decreased by 15.2%yoy as the majority of containers
originated from overseas. Moreover, new initiatives will be the other catalyst
for growth in 2021. The main risk to our call is a prolonged pandemic that may
lead to stricter social distancing restrictions. We maintain our BUY call with a
TP of IDR425.
Source : Bloomberg Key Financials
Year to 31 Dec 2019A 2019A 2021F 2022F 2023F
Revenue (IDRbn) 25,133 26,009 26,795 27,921 28,647
EBITDA (IDRbn) 9,966 13,060 13,464 14,368 14,550
EBITDA Growth (%) 17.1 6.5 3.1 6.7 1.3
Net profit (IDRbn) 713 372 1,042 1,971 2,355
EPS (IDR) 66.7 34.8 97.5 184.4 220.3
EPS growth (%) (121.6) 23.7 180.3 89.2 19.5
BVPS (IDR) 1,789.1 1,803.1 1,881.5 2,031.8 2,169.1
DPS (IDR) 0.0 20.0 19.1 34.1 83.0
x Ignatius Teguh Prayoga PER (x) 33.4 64.1 22.9 12.1 10.1
PBV (x) 1.2 1.2 1.2 1.1 1.0
(62-21) 5091 4100 ext. 3511
Dividend yield (%) 0.0 0.9 0.9 1.5 3.7
ignatius.prayoga@danareksa.co.id EV/EBITDA (x) 3.5 2.3 2.3 1.9 1.7
Source : IPCM, Danareksa Estimates

www.danareksa.com See important disclosure at the back of this report 1

 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth

Source: Company, Danareksa Sekuritas estimates Source: Company, Danareksa Sekuritas estimates

Exhibit 3. Margins Exhibit 4. Gearing Level

Source: Company, Danareksa Sekuritas estimates Source: Company, Danareksa Sekuritas estimates

Exhibit 5. Increasing activity in special use terminal … Exhibit 6. .. but still insignificant in terms of revenue contribution
1.800.000.000 400
1.600.000.000 350
1.400.000.000 300
1.200.000.000
250
GT Hour

IDR bn

1.000.000.000
200
800.000.000
150
600.000.000
400.000.000 100

200.000.000 50
- 0
9M19 9M20 General ports Private ports Special use terminal

General ports Private ports Special use terminal 9M19 9M20

Source: Company, Danareksa Sekuritas estimates Source: Company, Danareksa Sekuritas estimates

www.danareksa.com See important disclosure at the back of this report 2

 Exhibit 7. Income Statement
Year to 31 Dec (IDRbn) 2019A 2020A 2021F 2022F 2023F
Revenue 25,133 26,009 26,795 27,921 28,647
COGS (18,749) (21,989) (19,456) (19,258) (19,354)
Gross profit 6,384 4,020 7,339 8,663 9,293
EBITDA 9,966 13,060 13,464 14,368 14,550
Oper. profit 2,603 605 3,819 5,011 5,541
Interest income 111 183 177 176 139
Interest expense (2,243) (2,668) (2,963) (2,963) (2,963)
Forex Gain/(Loss) 46 8 0 0 0
Income From Assoc. Co’s 1 (1) (1) (1) (1)
Other Income (Expenses) 626 2,019 423 423 423
Pre-tax profit 1,144 146 1,455 2,646 3,138
Income tax (432) 225 (413) (675) (783)
Minority interest 0 0 0 0 0
Net profit 713 372 1,042 1,971 2,355
Core Net Profit 667 90 1,042 1,971 2,355

Exhibit 8. Balance Sheet

Year to 31 Dec (IDRbn) 2019A 2020A 2021F 2022F 2023F
Cash & cash equivalent 1,603 2,966 2,886 6,006 7,992
Receivables 765 560 635 663 682
Inventory 75 143 113 118 121
Other Curr. Asset 4,703 3,902 4,433 4,878 4,824
Fixed assets - Net 49,571 47,162 50,532 50,371 50,159
Other non-curr.asset 13,498 13,011 10,427 8,129 6,119
Total asset 70,214 67,745 69,024 70,166 69,897

ST Debt 5,462 1,576 2,789 3,275 2,546

Payables 8,042 7,379 7,869 8,200 8,413
Other Curr. Liabilities 7,789 9,903 8,425 8,023 7,429
Long Term Debt 7,348 7,773 7,617 6,855 6,170
Other LT. Liabilities 22,452 21,978 22,215 22,096 22,155
Total Liabilities 51,092 48,607 48,914 48,450 46,714
Shareholder'sFunds 19,122 19,272 20,110 21,716 23,184
Minority interests 0 0 0 0 0
Total Equity & Liabilities 70,214 67,879 69,024 70,166 69,897

www.danareksa.com See important disclosure at the back of this report 3

 Exhibit 9. Cash Flow
Year to 31 Dec (IDRbn) 2019A 2020A 2021F 2022F 2023F
Net income 713 372 1,042 1,971 2,355
Depreciation and Amort. 7,363 12,455 9,645 9,357 9,009
Change in Working Capital (700) 2,347 (1,562) (550) (349)
OtherOper. Cash Flow 2,131 1,779 (3,883) 296 620
Operating Cash Flow 9,508 16,952 5,241 11,074 11,635

Capex (17,578) (9,340) (6,344) (6,706) (6,593)

Others Inv. Cash Flow 409 669 2,761 2,473 2,149
Investing Cash Flow (17,169) (8,671) (3,583) (4,233) (4,445)

Net change in debt 10,394 (3,935) 1,295 (394) (1,355)

New Capital 53 32 0 0 0
Dividend payment 0 (214) (204) (365) (887)
Other Fin. Cash Flow (2,243) (2,802) (2,828) (2,963) (2,963)
Financing Cash Flow 8,205 (6,920) (1,738) (3,721) (5,205)

Net Change in Cash 543 1,362 (80) 3,120 1,986

Cash - begin of the year 1,047 1,603 2,966 2,886 6,006
Cash - end of the year 1,603 2,966 2,886 6,006 7,992

Exhibit 10. Key Ratios

Year to 31 Dec 2019A 2020A 2021F 2022F 2023F
Growth (%)
Sales 9.6 3.5 3.0 4.2 2.6
EBITDA 17.1 31.0 3.1 6.7 1.3
Operating profit (183.7) (76.7) 530.9 31.2 10.6
Net profit (121.6) (47.9) 180.3 89.2 19.5
Profitability (%)
Gross margin 25.4 15.5 27.4 31.0 32.4
EBITDA margin 39.7 50.2 50.2 51.5 50.8
Operating margin 10.4 2.3 14.3 17.9 19.3
Net margin 2.8 1.4 3.9 7.1 8.2
ROAA 1.1 0.5 1.5 2.8 3.4
ROAE 3.8 1.9 5.3 9.4 10.5
Leverage
Net Gearing (x) 0.6 0.3 0.4 0.2 0.0
Interest Coverage (x) 1.2 0.2 1.3 1.7 1.9

Source : EXCL, Danareksa Estimates

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