The Ministry of Transportation recorded 536
unit of Indo-flag vessels in the Offshore Support Vessel (OSV) industry, higher
compared to 350 vessels in pre-2005 when cabotage was not introduced yet. Head
of Offshore Vessel Division of The National Shipowner Association (INSA), Nova
Y. Mugijanto, said that Indonesia is able to provide all type of OSVs as long
as the contracts given by the oil and gas (O&G) players are long-term
contracts. In the OSV industry, several players are having difficulty to
fulfill the lack of supply in the market, given the capital intensive
requirement (USD20m- USD200m) to invest on a particular vessel while most of
the jobs offered are only short-term contracts. (Bisnis Indonesia)
Comment: We see that the lack
of supply in the OSV market opens a brighter opportunity for Wintermar Offshore
Marine (WINS IJ; BUY; TP: IDR1,000) and Logindo Samudramakmur (LEAD IJ; BUY;
TP: IDR3,850) in the short and long run. We see that this year, more tenders
for longer-term contracts are visible for this year which is a positive
catalyst for WINS and LEAD. Given their strong cash flow coupled
with relatively healthy balance sheet, we suggest expansion mode for both of
these companies are highly imminent. We maintain our upbeat view for the OSV
industry. (Willinoy Sitorus)
FROM
TRADING DESK: JCI
today is expected to be traded at 4,746.85 and 4,848.56
MEDIA
HIGHLIGHTS:
Semen
Indonesia sales achieved 6.2m tons (+3.5% y-o-y)
Matahari
Department Store maintains aggressive store expansions
PGAS
plans to obtain USD1bn-1.3bn worth of global bonds for expansion purposes
Sidomuncul
ready to open plant in Makassar
National
1Q14 coal production exceeded govt’s target
Indicated
1Q14 cement sales reached 14m tones (+3.6% y-o-y), in line
Government
will finance third runway of Soekarno Hatta International Airport.
Bank
Indonesia highlighted rising corporate foreign debts
Best
regards,
RHB
OSK Indonesia Research Institute
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