Good morning,
Key takeaways from
Wijaya Karya Analyst Meeting
♦ Wijaya Karya (WIKA IJ,
NEUTRAL, TP: IDR2,665) has won 1st phase of LRT Inner City Jakarta
connecting Kelapa Gading – Velodrome – Rawamangun with length of only 5.8km.
Wika has not signed the contract and expects to obtain the contract by the end
of this year. Although, the company has not announced the value of the project,
local government of Jakarta estimated around IDR4.2trn for that project.
Although it is a positive surprise for the company, we see this project will
have more impact next year and it is insignificant compare to company’s size.
Furthermore, we still positive that Adhi Karya (ADHI IJ, BUY, TP: IDR3,400)
will obtain LRT inner city Jakarta with route of Kelapa Gading – Kota – Dukuh
Atas (estimated investment cost: IDR20trn; estimated construction cost:
IDR15trn) since they are the contractor of LRT Greater Jakarta which will
connect Cawang to Dukuh Atas.
♦ The ministry of
transportation is set to release the construction permit for 40% of the
Jakarta-Bandung high speed train project land area by next week. Around 50% of
total land area are owned by the consortium, including land from Perkebunan
Nusantara (PTPN VIII), Jasamarga, and Kereta Api Indonesia (KAI). Thus, Wika
expects to record IDR17trn new contract from HSR project by the end of this
year.
♦ Wika will do right
issuance of IDR6trn this year, if they obtain capital injection from the
government worth IDR4trn. The fund will be used to finance several
infrastructure projects such as toll roads, power plants, water treatment and
other infrastructure projects.
♦ Wika recorded
IDR7.5trn (+28.7% YoY) in 5M16’s new contract, 14.3% to its FY target. The
company expects to book IDR10.2trn (-2.1% YoY) in 6M16’s new contracts or 19.5%
to FY target of IDR52.3trn (+107% YoY). Although the current achievement is
considered slowing down, we believe that Wika will accelerate to obtain new
contracts in 2H16, supported by toll road projects and HST. (Dony Gunawan)
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Media Highlights:
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Economics
Deposit Insurance
Institution (LPS) lower its rate by 0.25%
Corporates
Alam Sutera to
establish joint venture with China Fortune Land
Alam Sutera Realty
(ASRI IJ, BUY, TP: IDR540) signed a definitive agreement with China Fortune
Land Development to develop project in Pasar Kemis, Banten. This action is
continuation ofthe MoU which has signed by both parties on December 28th
2015. As planned, China Fortune will be responsible in term of investment and
development including project management, planning, construction,
infrastructure, providing public facility and industry service in Pasar Kemis
project. While, Alam Sutera will be responsible to ensure land availability
and helps China Fortune in term of construction and project management. (Investor
Daily)
Comments: We are positive as
we are expecting company to closed at least one partnership deal this year in
order to reduce the concern over Alam Sutera depleting cash. Note that Alam
Sutera net gearing remain high at 97% as of 1Q16 with cash balance dropping
to IDR257bn (from Dex-15 IDR638bn). All the cost of infrastucture and
development also bear by CFDL awaiting for more details information from the
company we are keeping our BUY Call with TP of IDR540.(Lydia Suwandi)
Indofood to increase
wheat production capacity
Indofood Sukses
Makmur (INDF IJ; BUY; TP: IDR8,600) is planning to increase wheat mills
capacity that is used for its flour brand, Bogasari. The company is planning
to increase the capacity of three production lines, with each line will
contribute an additional of 400 tonnes of wheat production per day, which
will increase Bogasari total capacity to 17,500 tonnes per day. However, the
capacity expansion will be gradual for the next two years. Indofood has
allocated IDR7.6trn for its FY16 capex that includes the allocation for
capacity expansion. (Kontan)
Comments:The above capacity
increase is part of Indofood strategy expansion in near future. This year,
Indofood budgeted IDR7.6trn capital expenditure which would be disbursed to
CBP (IDR3.9trn), Bogasari (IDR1.4trn), Agribusiness (IDR2trn), and
Distribution (IDR375bn). Maintain BUY on Indofood Sukses at IDR8,600 TP which
implies to 19x/17x FY16/17F P/Es.(Andrey Wijaya)
Pembangunan
Perumahan secured IDR10.8trn of new contracts
Pembangunan
Perumahan (PTPP IJ, BUY, TP: IDR4,200) expects to obtain IDR12trn (-10.4%YoY)
worth of new contracts in 1H16, 38.7% of its FY16 target of IDR31tn. As of
2nd week of June, the company has secured IDR10.8trn of new contracts.
Assuming PTPP obtained IDR12trn in 1H16, we see an improvement since in
June’16 alone the company will record IDR4.8trn, surged 33.4% from June’15.
It is still in-line with our expectation that its new contracts collection
will be accelerated in 2H16. (Dony Gunawan)
Key Takeaways from
Mitra Adiperkasa public expose
MNC Sky Vision to
add capital through non-preemptive right issue
Antam to open the
second exploration area in Mounth Pongkor, West Java
Best regards,
Helmy Kristanto
Director
Head of Indonesia Research
PT. RHB Securities Indonesia
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