Here is the list of stock for the index...

http://finance.yahoo.com/q/cp?s=^JKSE+Components

Ok first stock recommendation for IDX..

Stock Code : BTPN
Current Price : Rp 4,000
Liquidity : Very Low !
Current PE : 10.8x (Reasonable)
Current DY : 0
PBV : 3.2x (quite high)
5 Year Growth : Averaging 40-50% per YEAR
Future Growth : Expect to moderate between 25-30% per year



Share price has exploded from Rp 500 to Rp 4000 in 5 years, a 800% return...

Since it is a bank we will use bank metrics...

NPL : 0.6% (very good)
CAR : 21% (very good for a bank, very good capital position)
NIM : 11.5% (the highest I have ever seen!)
Net Profit Margin : 30% (very good)

FY13 EPS : Expected Rp 385/share
FY14 EPS : Expected Rp 450/share

Investment Moats

1. This bank has captured 95% of government servants pensioners loan, which accounts for 70% of BTPN total loans. This loan has been growing at 15-20% p.a. The loan is 100% secured by pension payments, which is like Malaysia's Angkasa which is impossible to default. Also life insurance will be bought together with the loan to ensure 70% payback in case the pensioners die. Due to this the NPL of this sector is <0.1%.

2. Pioneer in super micro loans (less than Rp 5 million/loan), concentrating on the 'productive poor'. Productive poor means low income group with self sufficient business, often uneducated, no income satements and previously have zero access to financial products (except loan sharks). They represents 40% of Indonesia's population but got left behind by mainstream development. Loan are small and unsecured, but surprisingly NPL is very low at 2%, means poor people tend to pay their loans. The loans also include 3 day course at managing a business, cash flow and basic accounting (must be taken). Since most of these productive poor is illiterate, the bank will go to them instead of they going to bank. All transaction is via fingerprint machine. They have people roaming the markets, traders location with portable machine. This sector is growing at a blistering 50% per year.

3. Has recently started 'empowering' the female to be financially independent through business. Most married females (poor income group) in Indonesia tend to be housewife, so this bank has been giving seminar, courses to help this women to uplift their family finances by doing some small business. They will have a bank appointed guide (previously successful women) per kampong to teach and ensure that they can succeed at their small ventures. First loan is small and gets bigger once their repayment schedule is smooth. This business is shariah based has only started last year and growth is currently >100%.

4. This bank has some very powerful backers with years of experience in banking industry. 40% is owned by TPG group, a private equity funds which concentrate on banking with holding in china and korea banks. 24% is owned by SUmitomo Mitsui Bank from Japan which recently bought the stake from TPG group in May 2013 under private a deal and paying a huge premium of Rp 6,500 per share.

Target price : PE 14x FY14 = Rp 6,500/share

For more info on how the bank is empowering the poor...

https://www.youtube.com/watch?v=IeXBACouh9Q

https://www.youtube.com/watch?v=CHiUkl38hXA

This post has been edited by gark: Sep 16 2013, 11:41 AM

Thanks for sharing man. But I am not very familiar with the indo market, how these bank compete with each other, international bank playing in the market, how the capital market etc... really need to do a lot of research. No US investment bank holding large stake in this company ?

Anyway this could be a good start.

There is no US bank holding large stake in Indon bank.. CIMB is holding to CIMB Niaga, Maybank is holding BII, Sumitomo Mitsui bank in BTPN, that's about it...

Agree. It's was irrationally high earlier on so I decided to sell 60% of my Indon stocks in May. Retrospectively I should have listened to my rational self and sold everything. It seems Indonesia is experiencing structural change, which may take some time to rectify - a potent mix of increasing inflation, depreciating currency, worsening current account deficit and a presidential election next year... Vietnam experienced something similar 5-6 years ago and it took them many years to recover.

Which gems have you uncovered? I bought into Alam Sutera, Malindo feedmill, Bekasi fajar, Metropolitan land, CIMB niaga, Surya Semesta etc in the recent crash.. probably an unwise decision since there are better stocks in other countries with less currency fluctuation.

What a coincidence! This is exactly the first Indon stock i bought in 2009. I bought it at Rp3400 and sold at Rp5600 2 months later. But why when i checked financa.yahoo for historical price it showed the price was rp300+ in 2009? Has the stock been split so many times?

Along the way there is private placement, stock split, bonus issue etc... overall if you have kept your stocks until today you will reap ~600% gain..

Now it is selling at Rp4.1k after dropping 30% recently, the FA still looks good. But the liquidity is terrible...

This post has been edited by gark: Sep 21 2013, 05:58 PM

You seems to be quite heavy into developers, recently interest rate has gone up...so it might be dangerous

I have ..

Semen Indonesia (Highest Margin cement producer & owns Than Loong cement in Vietnam),
Indocement ( Biggest producer with net cash of 10 trillion rupiah)
BTPN (as previously mentioned),
Summerecon Agung (Developer of high class residential BUT 33% recurring income comes from shopping mall& office& hotels)
Bank Mandiri (Undervalue bank with good growth)
BW Plantation (Plantation run by ex Boustead CEO, largest unplanted land bank, youngest trees)

I believe these stocks have good potential to withstand the roller coaster...but the growth story is still here in Indonesia, not gonna dissipate anytime soon.

This post has been edited by gark: Sep 21 2013, 06:10 PM

By the way, Indon stocks consist a small part of my portfolio, I have moved on to other countries.

anyone know the affordable and simple way to invest stock in Indonesia Stock exchange?