Cement sector should benefit from lower energy costs - UOBKH

Holcim's strategy to maintain low price will not last
Hold Holcim Indonesia, SMCB IJ, TP: Rp2,300 Share Price:Rp2,200 Upside:4.5% (Analyst: Marwan Halim, marwanhalim@uobkayhian.com)
1Q11 bottom line grew 2% YoY,
Net margin declined to 12% because of lower ASP, while the other 2 players maintained their margins at 30% and 25% and increased prices by 8%.
Managed to grab 2% of Semen Gresik's market share, but how long can they keep doing this? I think this strategy will further hurt margins and will eventually dampen overall earnings.
New cement plant in Tuban with 1.7mt p.a capacity will complete in 2013. This plant will not be an advantage, but it is a necessity for it to be able to compete with the other 2 players.

I prefer Indocement for exposure into the cement sector. Share prices climbed 2.71% yesterday, look into buying on pullback

First positive QoQ growth after 2 years, INTP 2011 Earnings may exceed estimate
Buy Indocement, INTP IJ, TP: Rp22,300, Share Price: Rp17,050, Upside:+30.7% (Analyst: Marwan Halim, marwanhalim@uobkayhian.com)
1Q11 net profit increased 10% YoY and 3% QoQ to Rp868bn, driven by higher sales volume and higher ASP.
To offset higher COGS from steep energy cost, INTP were able to increase ASP by 8% to 920,000/tonne without losing market share.
Margin improvement going forward,as we expect commodities price to soften, and more opportunity to increase prices later this year.
Zero debt position! Cash increased by 90% to Rp5tn, very flexible for further business expansion.
Running at 75% capacity, INTP is best positioned to absorb increasing demand, especially in greater Jakarta area.