Three Best-Performing, Indonesia-Focused Stocks Avg 29% YTD Return
  • SGX lists two trusts and more than 20 companies that derive more than half their group revenues from Indonesia.
  • Among them, three of the best performers in the 2018 year-to-date were: Samurai 2K Aerosol (+60.2%), Japfa (+22.8%) and Moya Holdings (+3.3%). The three, with a combined market capitalisation of S$1.59 billion, have averaged a total return of 28.8% in the YTD.
  • Indonesia’s 1Q 2018 GDP expanded 5.06% YoY, slower than the 5.19% growth seen in 4Q 2017, due to lower household spending, government expenditures and net exports. However, investment growth continued, rising to 7.95% in 1Q versus 7.27% in 4Q and 4.77% a year ago.
Singapore Exchange lists two trusts and over 20 companies that derive more than half their group revenues from Indonesia. Among them, three are in the Consumer Discretionary sector, while six are Consumer Staples companies. Six are Oil & Gas stocks, seven operate in the Industrials sector, and two are in the Materials segment. Another one is in Real Estate development, while the remaining two are Real Estate Investment Trusts (REITs) – Healthcare and Retail.

 

In this list, three of the best performers in the 2018 year-to-date were: Samurai 2K Aerosol (+60.2%), Japfa (+22.8%) and Moya Holdings (+3.3%). The three, with a combined market capitalisation of S$1.59 billion, have averaged a total return of 28.8% in the YTD.

 

Outlook for Southeast Asia’s Largest Economy

 

Indonesia saw its gross domestic product (GDP) expand 5.06% YoY in the first quarter of 2018, slower than the 5.19% growth experienced in the fourth quarter of last year, due to lower household spending, government expenditures and net exports. However, investment growth continued, rising to 7.95% in 1Q versus 7.27% in 4Q and 4.77% a year ago.

 

Bank Indonesia has forecast 2018 GDP growth at the mid-point of a 5.1%-5.2% range, and the economy to expand a further 5.2%-5.6% next year.

 

Southeast Asia’s largest economy has raised interest rates twice in the last six weeks to defend its rupiah currency – which has declined to its lowest level since 2015 – as escalating trade tensions between the US and China spurred a selloff in emerging market assets. Indonesia’s central bank will unveil its next monetary policy decision later today.

 

The country’s longer term outlook, however, remains steady. S&P Global Ratings in May affirmed Indonesia’s BBB-/A-3 sovereign credit ratings with a stable outlook, citing expectations that a recovery in commodity prices and improving infrastructure will boost its economy over the next three to four years.

 

The table below details 10 Indonesia-focused stocks listed on SGX, sorted by YTD total returns. Click on the stock name to view its full profile in StockFacts.

 

Name SGX Code Market Cap S$M 27 Jun Closing Price YTD Total Return % 1 Year Total Return % 3 Year Total Return % P/E (x) Dvd Ind Yld %
Samurai 2K Aerosol 1C3 181 1.65 60.2 283.7 N/A 41.7 N/A
Japfa UD2 1,145 0.62 22.8 1 64.4 51.6 0.8
Moya Hldgs Asia 5WE 263 0.093 3.3 -7.9 106.7 18 N/A
Gallant Venture 5IG 705 0.132 0.8 0 -45 N/A N/A
Mirach Energy AWO 14 0.1 0 163.2 -75.9 N/A N/A
First Real Estate Invt Trust AW9U 1,052 1.34 -0.6 8 15.4 14.4 6.4
Global Palm Resources BLW 72 0.365 -1.9 -5.7 15.4 31.9 4.1
KS Energy 578 18 0.035 -2.8 -16.7 -90 N/A N/A
RH Petrogas T13 54 0.073 -6.4 N/A -73.9 3.8 N/A
Golden Energy & Resources AUE 824 0.35 -7.7 -6.5 N/A 8.5 5.9

Source: Bloomberg & SGX StockFacts (data as of 28 June 2018).

 

Highlights of the Three Best-Performing, Indonesia-Focused Stocks

 

Samurai Eyes Innovation, New Markets for Growth

An aerosol coating specialist, Samurai 2K Aerosol focuses on high-performance coating solutions for the automotive refinishing and refurbishing industry. In addition to two-wheelers in emerging markets, the Group is making a push into the North American automotive sector. According to its latest financial statement, Samurai derives more than 60% of group revenues from the Indonesian market.

 

In May, Samurai reported a 426.9% YoY jump in net attributable profit to RM11.7 million for the full year ended 31 March 2018, while revenue rose 28.8% to RM90.0 million. Sales from the Indonesian market surged 223.6% YoY to RM57.9 million for the year, accounting for 65% of group revenues.

 

Looking ahead, Samurai expects the operating environment to remain challenging over the next 12 months, given geopolitical uncertainties that could adversely impact global trade. However, it will continue to expand sales, tighten cost controls and develop innovative products to maintain its competitive position. It has identified the US market as its next engine of growth, and has been granted a patent for its “Single Head 2K System” invention by the US Patent and Trademark Office.

 

For the full financial results, click here.

 

Japfa Rides Growing Protein Consumption in Emerging Asia

Japfa is an agri-food producer that produces protein staples such as chicken, beef and milk, as well as protein-based consumer food products, for the fast-growing economies of Indonesia, China, India and Indo-China. Backed by two generations of farming experience, it operates industrial-scale farms, which are vertically integrated with its downstream food processing operations. According to its latest annual report, the Group derives more than 70% of group revenue from Indonesia.

 

Japfa reported a 702.4% YoY jump in profit after tax and minority interests (PATMI) of US$16.7 million for the quarter ended 31 March 2018, while revenue rose 14.9% to US$845.5 million, driven by a marked improvement in sales volumes across its poultry division. Stripping out foreign exchange gains/losses, core PATMI gained 287.9% YoY to US$28.3 million.

 

Japfa said it would stay focused in meeting the rising protein consumption in the five emerging Asian markets. While PT Japfa Tbk continues to deliver solid results in its poultry business, the Group looks forward to participating in the growth of Asia’s milk industry in a bigger way with 100% ownership of its Dairy operations. It will also stay focused on its strategy to increase the competitiveness of its Consumer Food division amidst a challenging landscape.

 

For the full financial results, click here.

 

Moya Holdings Explores Expansion Opportunities 

Moya is engaged in the investment and development of total water solutions in Indonesia, which include the collection of raw water, treatment of captured water and distribution of clean water. It is one of the largest water treatment companies in Indonesia, with a total water treatment capacity of about 14,000 litres per second.

 

Moya reported a net profit of S$8.8 million for the three months ended 31 March 2018, up 548% YoY, while revenue jumped 268% to S$45.1 million, driven by the inclusion of water sales from the recently acquired Acuatico Group.

 

The Group is focusing on executing its two concession arrangements and one bulk water project undertaken by its subsidiaries – PT Aetra Air Tangerang, PT Aetra Air Jakarta, and PT Acuatico Air Indonesia. At the same time, it will focus on the two (Build-Operate-Transfer) projects in Bekasi Regency and Tangerang City.

 

Besides organic growth, the Group is also looking to expand its operations via mergers and acquisitions, and unveiled a rights issue in May that could raise up to S$132.5 million in net proceeds, which will be used to fund any potential growth opportunities.

 

For the full financial results, click here.