Results Review:
Acset Indonusa (ACST IJ, Neutral, TP: IDR2,850)
Not Christmas Yet
Acset Indonusa (ACST IJ, Neutral, TP: IDR2,850)
Not Christmas Yet
We downgrade Acset to NEUTRAL (from Buy) with
a lower TP of IDR2,850 (from IDR3,900, 4% upside), based on an unchanged
18x FY17F’s P/E. We saw a lower-than-expected burning rate in FY16,
although its orderbook was above our target. As such, we upgrade our FY17F’s
new contracts assumption to IDR6trn. Additionally, we estimate that its gross
margin would stand at a lower level due to a higher contribution from its
structure segment and potential infrastructure projects. Currently, the company
is trading at 17.4x FY17F P/E.
¨ Orderbook. Last year, Acset
Indonusa (Acset) won IDR3.8trn worth of new contracts. This was above our and
the company’s initial estimates, translating to IDR6.6trn orderbook. For FY17,
we anticipate potential infrastructure project signings as we upgrade our new
contracts target to IDR6trn. This is above the company’s guidance of IDR4.5trn
that excludes infrastructure projects. Our bullish assumption is based on the
potential infrastructure projects such as the Jakarta-Cikampek elevated toll
road (a joint venture (JV) with Waskita Karya (WSKT IJ, BUY, TP:
IDR4,000)), the Astra Group’s toll roads as well as power plant projects. Thus,
its FY17F’s orderbook is likely to reach IDR10.6trn (+60%YoY).
¨ Robust growth with
lower margin.
We estimate its revenue to grow +39.1% YoY this year, supported by a strong
orderbook with lower burning rate of 23%. However, we expect its GM to slide to
14.4% as structure construction and infrastructure projects would make up the
bulk of its total revenue in FY17. Foundation works would only contribute
around 10% of total revenue. Its opex-to-revenue is also expected to fall this
year. Having said that, its earnings are likely to be IDR111bn in FY17 (from
IDR149bn), higher than last year.
¨ Downgrade to NEUTRAL. We downgrade Acset to
NEUTRAL with a lower TP of IDR2,850 based on an unchanged TP of 18x FY17F P/E.
Although the company is likely to record solid growth over the next few years,
it is currently trading at 17.4x FY17F’s P/E, >10% premium to the sector’s
current valuation.
Kindly click the following link for the full report: Acset Indonusa Tbk : Not Christmas Yet
Dony Gunawan
Assistant Vice
President
Research Analyst – Construction
PT. RHB Securities
Indonesia
Disclaimer: This message is intended only for the use of the individual or entity to whom it is addressed and may contain information that is confidential and privileged. If you, the reader of this message, are not the intended recipient, you should not disseminate, distribute or copy this communication. If you have received this communication by mistake, please notify us immediately by return email and delete the original message. This message is transmitted on the condition that the recipient accepts the inherent risks in electronic data transmission and agrees to release RHB group and RHB Securities from any claim which the recipient may have as a result of any unauthorized duplication, reading or interference with the contents herein. The contents herein are made in the personal capacity of the above-named author and nothing herein shall be construed as professional advice or opinion rendered by RHB group and RHB Securities or on its behalf.
