RHB Indonesia Morning Cuppa - 21 December 2016 - (Construction) Unknown Rabu, 21 Desember 2016




Good morning,

Construction Sector 11M16’s Achievements

Overall, four state owned contractors received IDR135.2trn new contracts as of Nov’16, +72% YoY increase to same period last year and around 83.5% to our FY target of IDR162trn (+65% YoY). We remain optimistic to Indonesia Construction outlook in FY17F as the strong new contracts collection this year will be mainly recognised next year.

♦ Wijaya Karya (WIKA, BUY, TP, 2,950) has obtained IDR53.648trn (+112.7% YoY) new contracts as of December 20,2016, already surpass our FY16F estimates of IDR50trn. The biggest contributions are coming from IDR15.8trn High Speed Railway which 20% of the contract will be recognized as revenue in FY17F and IDR5.296trn LRT Inner City Jakarta. By the end of this year, the company will receive 20% down payment of LRT Inner City Jakarta project.
♦ Adhi Karya (ADHI, NEUTRAL, TP: IDR2,085) has raked IDR13.4trn (+14.1%YoY) in new contracts as of 11M16, 83.8% to our FY16F estimates of IDR16trn(+15.1%YoY), slightly above last year's seasonality of 80%. Hence, we are optimistic that the company would reach our FY new contract estimates. New contracts in Nov'16 include IDR681.7bn Hotel Samana Bali, IDR183.bn underpass Mampang and IDR154.2 Transmart Lampung.
♦ Waskita Karya (WSKT IJ, BUY, TP: IDR3,750) collected IDR64.5trn (131.2% YoY) in 11M16 new contracts, 99.2% to our FY estimates of IDR65trn. Most of the contracts are toll road projects which are owned by its toll road subsidiary, Waskita Toll Road. The company guides IDR70trn – IDR80trn new contracts next year, much higher than our FY17F estimates of IDR40trn. Toll road projects will still be the main source of new contracts.
♦ Pembangunan Perumahan’s (PTPP IJ, BUY, TP, IDR5,400) new contracts reached IDR29.3trn (+39.1% YoY) in 11M16, 94.5% to our FY estimates of IDR31trn (+14.5% YoY). We remain positive that new contracts FY16F target will be easily achieved by the company. Post rights issue, the company expects to have IDR38trn new contracts, IDR24trn (+22.3% YoY) in revenue and IDR1.5trn (+62.1% YoY) NPAT profit next year. (Dony Gunawan)


Figure 1: State owned contractors' new contract collection as of 11M16 to FY16F estimates
Source: RHB
*as of 20 December 2016

Link to Daily report: Indonesia Morning Cuppa - 211216



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Best regards,

Helmy Kristanto
Director
Head of Indonesia Research
PT. RHB Securities Indonesia
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