Market Flash: iSHARES MSCI Indonesia Investable Market Index Fund (EIDO:US) PRICE: 28.530 USD Down -0.360 (-1.246%) >>> BI: Rupiah Melemah Akibat Kondisi Eropa >>> Pertemuan FED pertimbangkan langkah baru dorong ekonomi >>> KIJA akan Terbitkan MEN Valas USD150 Juta >>> PT Indika Energy Perusahaan Teladan Dunia 2011 >>> Govt Promises Revision of Cost Recovery Regulation >>> BPMigas Demands PGN to Pay US$6 per MMBTU >>> Jababeka to Raise US$150 Million from Debt Markets >>> SCG Chemicals buys Chandra Asri >>> Solusi Tunas eyes Rp380 bio IPO >>> SMR Utama scouts Rp300 bio IPO >>> Alam Sutera picks two bond arrangers >>> ASII Tetap Rajai Penjualan Mobil Agustus 2011 >>> Perusahaan Thailand kuasai Saham TPIA senilai Rp 3,76 Triliun >>> Agis Main ke Tambang, Sahamnya Masuk Dalam Pengawasan >>> ACES Mendekati The Northern Agar Mau Kurangi Kepemilikan >>> IHSG masih harus berjuang terus bertahan diatas MA200 >>> Melirik Peluang Akumulasi di Saham Perbankan >>> Analisa Saham BUMI: Kuat Bertahan & Berpeluang Kembali Uptrend >>> Analisa Saham JSMR: Bertahan Di Support, What Next? >>> INDF Tertahan Di Area Support Kuat, Berpeluang Rebound >>> ASII Break Minor Support, Sell on Strength >>> ADRO Membentuk Descending Wedges, Berpeluang Rebound Terbatas >>> Wall Street ends flat as early gains evaporate >>> Fed begins policy meeting, tiptoes toward easing >>> Fed meeting to help decide on long-term Treasuries >>> Greece Makes 'Good Progress' in Reform Talks: EC >>> China worried Europe debt crisis will hit trade >>> China could roll out 4.65tr yuan stimulus package >>> IMF sees Mideast stagnation >>> NYMEX-Crude ends higher at Oct contract expiry >>> Asian Crude Palm Oil Up On Technical Buying, Soyoil >>> Foreign net Sell - 61.785.746

Selasa, 26 Juli 2011

Indo cement sector, high barriers to entry - CLSA

Determined Di Shui is still a bull on Indo cement companies. Rising competition is the main issue here. We believe that market concerns are premature. We remain overweight Indonesian cement producers.

Barriers to entry are high. Key points:

Land acquisition. Very difficult and time consuming, especially in main market Java. Lengthy negotiation with no certainty of outcome.
Access to Raw Materials. Limestone quarries are scarce. License from Ministry of Mining is required.
Distribution. Cement is bulky and costly to distribute. Our channel checks, interestingly, also suggest that large cement distributors are captive to existing producers and wary of switching allegiance.
Branding. Cement is a branded commodity. Especially true at retail/bag level, which accounts for 82% of domestic consumption. Even for bulk cement, brand is super important.
2-3 year construction period. And our channel check suggests no new player has broken ground to date.
No M&A opportunities. Lack of acquisition target for new players who want to expedite the process.

Di Shui also worked on worst case scenario. Under our bear case scenario, we assume all new players starting in early 2012. Sector utilization rates remain attractively high at 80% through 2014 (assuming reasonable 8% domestic demand CAGR from 2011-15).

The risk of overcapacity is LOW, in our view. And disproportionately reliant on Chinese cement producer Anhui Conch’s ability to deliver on an ambitious expansion plan, i.e. 17mn tons new capacity, which represents 70% of total new capacity pledged by foreign producers. Under this scenario, capacity utilization will drop to 65%.

IF (a big IF) Anhui succeeds, distribution constraints suggest enhanced competition could be localized, with Semen Gresik (SMGR IJ) most impacted given dominance in East Indonesian markets.

Tidak ada komentar:

Posting Komentar