W

ith the upcoming long weekend on Friday, Indonesian corporates are in a rush this time around to report their 2012 financial results before the 31 March deadline set by the authorities. Hence, within our coverage, 50 companies (65 percent of total market capitalization of the Jakarta Composite Index) have announced their last year’s performances. As of the write-up of this report, bigger cap stocks that have not reported were only Bank Central Asia, Gudang Garam and Charoen Phokpand.

The results thus far have been stellar and broadly in line with our expectations. Exhibit 1 shows that aggregate operating profit growth has accelerated to 14.6 percent y-y in 4Q12, up from just 1.0 percent in 4Q11. At the net profit level, the market’s 4Q12 bottom line growth has reached 16.6 percent on a y-y basis, up from 10.7 percent in 4Q11.

There are five “good” sectors: Property, Metals, Cement, Infrastructure and Banks (exhibit 2), which managed to book higher growth at both the operating and net profit levels relative to the market’s performance. Interestingly, only property, banks and infrastructure-related have outperformed the market in terms of share price performance (exhibit 5). The other two sectors, Metals and Cement, have suffered with the latter due to an overhang situation caused by royalties. On Metals, recent commodity price weakness due to a tightening of China’s economy has resulted in market underperformance.

On the “bad” sectors (Utilities, Poultry and Oil-related), we saw mixed performances in terms of their operating and net profit results (exhibit 3). We note that within the poultry sector, only one company, Japfa Comfeed, has reported its 2012 financials. Hence, this “mixed” picture could change once Charoen Phokpand and Malindo Feedmill announce their 4Q12 performances.

In the “ugly” category, there are four sectors (exhibit 4) that reported both operating and net profit growth, which were lower than market performance. We note that Auto & Heavy Equipment as well as plantations and coal are hurt by lower commodity prices; hence, their unexciting growth profiles. For the consumer sector, 4Q12 tends to be the slowest quarter as year-end operating costs have the propensity to be high, in line with bonus distribution and increases in advertising spending during the period.