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Premier Insight : SMBR, reported a sales volume of 161kt in March 2019
Tuesday, April 16, 2019       09:34 WIB

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Semen Baturaja ( IJ; Rp1,190; Sell) reported a sales volume of 161kt in March 2019 (-44% mom, +7.6% yoy) bringing a total 1Q19 sales volume of 0.611mt (-32% yoy) and forming 23% to our forecast. (Bisnis Indonesia).
Comment: Sumatera booked 1.05mt sales volume in March 2019 (+1.8% mom, -9.3% yoy) with total 1Q19 of 3.2mt (-4.2% yoy) which suggest volume growth downtrend seems to be amplified relative to industry performance due to its clustered market coverage. is now holding 18.7% market share in Sumatera as of 1Q19, a significant drop relative to last year position (vs. IQ18: 26%) as we believe outstanding volume performance in 2018 was driven by Asian Games which is a one-off event. We maintain SELL on as we believe will have a sub-par profitability margin performance (3% in FY19F) compared to its peers due to debt-financed expansion which we think is a wrong strategy given current oversupply condition in cement industry


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