Professional Documents
Culture Documents
Indonesia Infrastructure
Refer to important disclosures at the end of this report
Time to deliver
26 May 2015
JCI :
5,315.15
Analyst
CHONG Tjen San, CFA +603 2604 3972; tjensan@alliancedbs.com
Deidy WIJAYA +6221 3003 4931; Deidy.Wijaya@id.dbsvickers.com
www.dbsvickers.com
ed-SGC / sa- MA
STOCKS
Wijaya Karya
PT PP (Persero)
Waskita Karya
Adhi Karya
Wijaya Karya Beton
Semen Indonesia
Indocement Tunggal P.
Holcim Indonesia
Price
Mkt
Cap
Target
Price
Rp
US$m
Rp
1,567
1,501
1,306
384
799
5,922
6,280
947
3,000
4,650
1,320
N/A
1,200
12,000
20,000
N/A
3,350
4,075
1,765
2,800
1,205
13,125
22,425
1,625
Performance (%)
3 mth
-7.8
2.8
-3.3
-19.8
-14.5
-11
-5.2
-17.5
12 mth
Rating
42
118.5
141.8
-12.6
54.5
-12.4
-2.8
-39.5
Hold
Buy
Fully Valued
N/R
Buy
Fully Valued
Fully Valued
N/R
Industry Focus
Indonesia Infrastructure
Table of Contents
Focus Chart
13
Valuation
13
14
15
Cement
Page 2
16
16
Valuation
17
18
Key Risks
20
Stock profiles
21
Wijaya Karya
22
PT PP
27
Waskita Karya
32
37
Semen Indonesia
42
47
Industry Focus
Indonesia Infrastructure
Focus charts
Margin comparison
EPS growth
60.0%
42.9%
50.0%
40.0%
30.3%
30.0%
31.5%
30.3%
27.9%
20.2%
19.6% 19.9%
20.0%
12.3%
14.6%
13.6%
13.1%
10.0%
3.3% 3.6%
0.0%
GPM
NetMargin
GPM
2010
NetMargin
GPM
2011
WIKA
NetMargin
GPM
2012
PTPP
WSKT
ADHI
NetMargin
2013
WTON
SMGR
GPM
FY1114
NetMargin
2014
INTP
FY1416
WIKA
PTPP
WSKT
ADHI*
WTON
SMGR
ROAE comparison
45.0%
INTP
3.5%
40.0%
3.0%
3.0%
35.0%
30.0%
2.5%
25.0%
2.0%
1.7%
1.7%
1.5%
20.0%
1.5%
15.0%
1.1%
1.0%
10.0%
5.0%
0.5%
0.0%
2012
2013
WIKA
PTPP
WSKT
2014
ADHI*
WTON
Avg(last3years)
SMGR
0.9%
0.7%
0.6% 0.7%
0.2%
0.9%
0.7%
0.7%
0.4% 0.5%
0.5%
0.4%
0.2%
0.8%
0.5%
0.5%
0.0%
2009
INTP
0.6% 0.5%
0.3%
2010
2011
WIKA
2012
PTPP
WSKT
2013
Avg(last5
years)
ADHI
2.25
1.94
27.3%
43.3%
1.11
0.93
1.15
1.08
0.96
0.81
0.98
0.82
0.21
0.12
0.04
0.01
0.19
0.05
0.03
2010
0.20
0.03
0.01
2011
WIKA
PTPP
2012
WSKT
ADHI*
22.0%
0.94
0.80
0.68
0.52
0.44
WTON
33.9%
36.3%
25.5%
22.4%
WIKA
PTPP
0.26
0.13
0.00
2014
SMGR
32.8%
0.61
0.16
0.00
2013
31.1%
44.2%
1.23
1.15
1.11
50.7%
34.9%
INTP
WSKT
Govt
SOE
ADHI
Private
Page 3
Industry Focus
Indonesia Infrastructure
Revenue visibility
in Rp bn
40,000
3.0
40.0%
2.84
35,000
2.5
30,000
35.0%
30.0%
2.17
2.0
2.00
25,000
20,000
1.5
1.28
15,000
1.0
25.0%
20.0%
15.0%
10.0%
10,000
0.5
5,000
0.0
0
WIKA
PTPP
Currentorderbook
WSKT
FY14Revenue
5.0%
0.0%
2010
ADHI
2011
WIKA
Orderbook/FY14revenue
2012
PTPP
2013
WSKT
2014
ADHI
28.0
26,500
23.0
19,137
22,000
20,200
17,300
18.0
17,100
15,400
13.0
9,200
7,863
5,100
3,700
WIKA
PTPP
FY14
3,300
WSKT
FY154M
2.8%
WSKT
Jan15
ADHI
WTON
4.2%
4.1%
19
17
3.6%
3.3%
3.3%
3.2%
3.0%
2.9%
3.5%
3.4%
3.1%
2011
WIKA
3.2%
2012
PTPP
1.7%
2013
WSKT
15
13
2.2%
1.8%
11
9
2014
SMGR
INTP
SMCB
ADHI
Page 4
PTPP
21
2.1%
2010
FY15Remaining
3.5%
Jul14
WIKA
ADHI
4.0%
3.8%
8.0
Apr14 May14 Jun14
Industry Focus
Indonesia Infrastructure
( Figure s in Rp tr)
Income
Tax Revenue
Oil and gas income
State expenditure
Infrastructure
Fuel subsidies
LPG subsidies
Capital injections to SOEs
A PBN 2015
1,793.6
1,380.0
224.3
2,039.5
190.0
276.0
43.6
7.3
A PBNP 2015
1,761.6
1,489.3
81.4
1,984.1
290.0
64.7
26.0
67.5
Cha nge
(32.0)
109.3
(142.9)
(55.4)
100.0
(211.3)
(17.6)
60.2
WIKA, PTPP
2019
1,080
70
60
59.7
250
54.6
50
40
37.5
38.7
41.8
38.1
37.0
45.0
46.2
200
46.0
150
276.0
30
211.9 210.0
20
69.0
95.6
64.2
240.0
100
165.2
139.1
10
46.0
38.2
83.8
17.9
50
82.4
64.7
45.0
0
2004
2005
2006
2007
2008
2009
2010
Budgetforfuelsubsidy(inRptr)
2011
2012
2013
Subsidisedfuelvolume(inmKL)
Page 5
Industry Focus
Indonesia Infrastructure
Program/Entity
PT Hutama Karya
PT Waskita Karya Tbk (WSKT)
PT Adhi Karya Tbk (ADHI)
PT Kereta Api Indonesia
PT Angkasa Pura II
Perum Perumnas
PT PLN
PT Penjamin Infrastruktur
Indonesia
PT Sarana Multi Infrastruktur
Infrastructure and connectivity
Food security
National economic independence
Maritime development
Defense and security
BPJS (social security)
Page 6
Industry Focus
Indonesia Infrastructure
Page 7
Industry Focus
Indonesia Infrastructure
Page 8
Industry Focus
Indonesia Infrastructure
Roads
Railways
Sea Transportation
Air Transportation
Land Transportation
Urban Transportation
Electricity
Oil and gas
Information and Communication Technology
Water Resources
Clean Water and Sewage
Public Housing
Total Infrastructure
APBN
APBD
SOE
Private
Total
340.0
150.0
498.0
85.0
50.0
90.0
100.0
3.6
12.5
275.5
227.0
384.0
2,215.6
200.0
5.0
15.0
15.3
68.0
198.0
44.0
545.3
65.0
11.0
238.2
50.0
10.0
5.0
445.0
151.5
27.0
7.0
44.0
12.5
1,066.2
200.0
122.0
163.8
25.0
5.0
435.0
351.5
223.0
50.0
30.0
87.0
1,692.3
805.0
283.0
900.0
165.0
60.0
115.0
980.0
506.6
277.8
400.5
499.0
527.5
5,519.4
500
450
16%
15.8%
60.2
400
350
300
41.8
200
47.9
15%
88.7
13.8%
81.5
14%
13.7%
14%
74.9
99.4
128.7
2010
2011
15%
96.6
57.0
100
50
77.4
68.4
46.9
250
150
53.2
14.9%
16%
174.9
203.9
2012
2013
13%
13%
StateBudget(APBN)
ProvincialBudget(APBD)
SOE
Private
Privatesector'scontribution
Page 9
Industry Focus
Indonesia Infrastructure
Source: Bappenas
50%
6,000
45%
40%
5,000
35%
4,000
30%
3,000
25%
2,000
20%
1,000
15%
10%
SMGR
INTP
SMCB
Others
Bulk
21.0%
Ho using:
c.9 0%
Cement
b ased
i n dustry:
c.1 0%
Fab ricator:
c.3 5%
Projects (mortar,
render): c.5%
100%
13,850
95%
12,000
Bag
79.0%
83%
8,000
6,300
85%
4,918 76%
75%
72%
3,750
3,054
1,886
80%
6,635
6,500
6,000
2,000
1,564
60%
2013
2014
Incremental demand
2015F
Incremental effective supply*
2016F
2017F
Utilization rate (RHS)
Page 10
70%
65%
95%
90%
89%
10,000
4,000
13,350
Industry Focus
Indonesia Infrastructure
Loca tion
East Java
Central Java
West Sumatra
South Sulawesi
2012
11,600
6,330
4,620
22, 550
2013
14,000
6,400
7,300
27, 700
2014
14,400
7,300
7,800
29, 000
2015F
14,400
7,300
9,300
30, 500
2016F
14,400
3,000
10,300
9,300
36, 500
2017F
14,400
3,000
10,300
9,300
36, 500
West Java
South Kalimantan
Central Java
16,000
2,600
18, 600
16,000
2,600
18, 600
17,900
2,600
20, 500
22,300
2,600
24, 900
22,300
2,600
24, 900
22,300
2,600
2,500
27, 400
West Java
Central Java
East Java
5,600
3,500
9, 100
5,600
3,500
9, 100
5,600
3,500
1,700
10, 800
5,600
3,500
3,400
12, 500
5,600
3,500
3,400
12, 500
5,600
3,500
3,400
12, 500
South Sulawesi
Riau
East Java
Papua
2,300
1,200
3, 500
2,300
1,200
3, 500
4,000
1,200
5, 200
4,000
1,200
6, 300
4,000
1,200
1,100
750
7, 050
4,000
1,200
1,100
750
7, 050
Baturaja
South Sumatra
1, 250
2, 000
2, 000
2, 000
2, 000
3, 850
Andalas (Lafarge)
Aceh
1, 600
1, 600
1, 600
1, 600
1, 600
1, 600
Kupang
NTT
550
550
550
550
550
550
South Kalimantan
West Java
Others
1,500
1, 500
1,500
1, 500
1,500
1, 500
1,500
2,000
3,000
6, 500
Siam Cement
West Java
1, 800
1, 800
Banten
750
1, 750
5, 750
5, 750
Panasia
Central Java
1, 500
1, 500
Juishin
West Java
1, 500
1, 500
1, 500
83, 100
97, 150
106, 500
SMGR
INTP
SMCB
Bosowa
Anhui Conch
T ota l
57, 150
63, 050
71, 900
Page 11
Industry Focus
Indonesia Infrastructure
120%
96%
100,000
88%
80%
80,000
67%
61%
60,000
61%
68%
70%
73%
Aggressive expansion
plans by incumbents and
new entrants
95%
100%
89%
83%
76%
77%
76%
Property boom
fuelled cement
demand
72%
80%
60%
40,000
40%
20,000
20%
0%
Utilization rate
Page 12
Industry Focus
Indonesia Infrastructure
Construction and Precast
Valuation
We looked at the valuation of SOE contractors and WTON
that stretches back to April last year. We did not look further
back as historical valuations may not be comparable because
the sector is undergoing a massive transformation.
Valuation for the Indonesian SOE contractors are currently at
12.3x-26.1x forward PE, implying -0.7SD to +0.9SD, and
13%-35% below peak valuation in Feb 2015. These suggest
the market is being more cautious, likely because of the delays
in rolling out projects and lackluster 1Q15 results.
We believe the current valuation is fair and further rerating to
and beyond peak valuation must be supported by strong
rollout of projects in 2H15. Therefore, we would advise
investors to be more selective in increasing exposure to the
sector.
WIKA
22.3
3.1
22.8
+0.2
28.1
19.0%
PTPP
21.4
4.3
25.3
+0.9
28.9
12.5%
WSKT
21.4
6.3
26.1
+0.7
33.8
22.7%
ADHI
12.6
2.8
12.3
-0.1
19.1
35.4%
WTON
25.6
3.6
23.0
-0.7
31.9
27.7%
28.0
23.0
18.0
13.0
8.0
Apr14 May14
Jun14
Jul14
Aug14
WIKA
Sep14
PTPP
Oct14
Nov14 Dec14
WSKT
ADHI
Jan15
Feb15 Mar15
Apr15 May15
WTON
Page 13
Industry Focus
Indonesia Infrastructure
85.0
2,000
80.0
1,800
75.0
1,600
70.0
1,400
65.0
1,200
60.0
1,000
55.0
800
50.0
600
FY15 EPS
FY16 EPS
Price
4,000
3,800
400.0
3,600
WIKA
-10.3%
-9.8%
-12.0%
90.0%
86.6%
PTPP
0.8%
2.1%
9.1%
105.7%
97.4%
WSKT
17.0%
24.8%
20.1%
97.5%
79.0%
ADHI
2.9%
9.9%
-23.5%
N/A
N/A
WTON
-8.6%
-6.0%
-13.8%
92.1%
89.0%
350.0
3,400
3,200
300.0
3,000
250.0
2,800
2,600
200.0
2,400
150.0
2,200
3,400
170.0
1,500
65.0
3,200
160.0
1,400
3,000
60.0
1,300
2,800
150.0
1,200
2,600
140.0
1,100
55.0
2,400
130.0
1,000
2,200
50.0
900
2,000
120.0
3,600
180.0
Price
4,000
190.0
FY16 EPS
800
45.0
700
600
FY15EPS
FY16EPS
Price
40.0
500
FY15 EPS
4,500
190.0
4,000
180.0
3,500
3,000
160.0
2,500
140.0
2,000
130.0
1,500
FY15EPS
FY16EPS
Price
Page 14
Price
170.0
150.0
FY16 EPS
Industry Focus
Indonesia Infrastructure
YTD new contract wins vs. share price
performance
In the first four months of 2015, PTPP recorded the best
contract win performance, achieving 29% of its FY15
guidance, and WTON 25%. WIKA, WSKT and ADHI only
achieved 16-18% of guidance. The strong contract wins by
PTPP was followed by solid share price performance (+9%
YTD). WIKAs weak contract win was reflected in its share
price performance (-12% YTD). WSKTs weak contract in
achievement, however, did not affect its share price
performance (+20%) as there was positive sentiment towards
the planned capital injection.
30.0%
20.0%
25.0%
15.0%
10.0%
20.0%
5.0%
0.0%
15.0%
5.0%
10.0%
10.0%
15.0%
5.0%
20.0%
25.0%
Jan15
PTPP
WSKT
ADHI
Mar15
YTDshareperformance
Apr15
May15
Newcontractas%ofFY15target(RHS)
0.0%
Feb15
30.0%
20.0%
25.0%
15.0%
WTON
10.0%
20.0%
5.0%
16.1%
-12.0%
29.1%
9.1%
17.8%
20.1%
17.6%
-23.5%
25.0%
-13.8%
0.0%
15.0%
5.0%
10.0%
10.0%
15.0%
5.0%
20.0%
25.0%
Jan15
30.0%
0.0%
Feb15
Mar15
YTDshareperformance
20.0%
Apr15
May15
Newcontractas%ofFY15target(RHS)
25.0%
15.0%
10.0%
20.0%
5.0%
0.0%
15.0%
-5.0%
10.0%
-10.0%
25.0%
-15.0%
-20.0%
-25.0%
Jan-15
30.0%
20.0%
5.0%
25.0%
15.0%
0.0%
Feb-15
Mar-15
Apr-15
10.0%
May-15
20.0%
5.0%
15.0%
0.0%
5.0%
10.0%
10.0%
15.0%
30.0%
20.0%
25.0%
25.0%
Jan15
20.0%
15.0%
10.0%
0.0%
Feb15
YTDshareperformance
20.0%
Mar15
Apr15
May15
Newcontractas%ofFY15target(RHS)
5.0%
0.0%
5.0%
15.0%
-5.0%
10.0%
-10.0%
-15.0%
5.0%
-20.0%
-25.0%
Jan-15
0.0%
Feb-15
YTD share performance
Mar-15
Apr-15
May-15
Page 15
Industry Focus
Indonesia Infrastructure
Cement
Consensus earnings and share prices
Analysts have been cutting earnings for cement players since
last year. There seems to be a strong correlation between
earnings downgrades and stock price performance for cement
players. Our FY15F earnings are now in line with consensus
earnings after the recent downgrades by consensus, but there is
still downside risk to our and consensus numbers if sales
volumes and/or ASP do not rebound in 2H15. Our FY16F
earnings are still 5-6% below consensus estimates as we
continue to believe that earnings growth for the Indonesian
cement players will be weak due to intensifying competition
from new entrants.
27,000
1,900
26,000
25,000
1,800
24,000
1,700
23,000
1,600
22,000
1,500
21,000
1,400
20,000
FY15EPS
FY16EPS
Price
SMGR
INTP
SMCB
-9.0%
-5.7%
-25.8%
220
-10.7%
-7.5%
-23.1%
200
-9.4%
-9.4%
-25.9%
180
98.7%
99.9%
N/A
93.9%
94.8%
N/A
3,200
3,000
2,800
2,600
2,400
160
2,200
140
2,000
1,800
120
1,600
100
18,000
1,250
17,000
FY15 EPS
1,200
16,000
1,150
1,100
14,000
1,000
13,000
950
900
12,000
FY15 EPS
FY16 EPS
Price
FY16EPS
Price
15,000
1,050
Page 16
1,400
Industry Focus
Indonesia Infrastructure
Valuation
Indonesian cement companies are currently trading at 13.2x14.8x 12M forward P/E, or slightly below of 5-year mean
valuation. Despite the seemingly attractive valuation relative to
the historical average, there may be further derating in the
next few years due to supply-demand imbalance, which will
derail cement players margins and earnings growth.
Furthermore, there could be further downside risks to
consensus EPS forecasts for FY16; our forecasts are 5-6%
lower. We retain our FULLY VALUED calls for both SMGR and
INTP.
Summary of Indonesia cement companies valuations
(12M forward P/E)
5 year mean
SD
Current
SMGR
INTP
SMCB
14.3
14.8
15.7
1.6
1.2
1.8
13.3
14.8
14.6
-0.7
-0.6
Peak
28.1
28.9
33.8
19.0%
12.5%
22.7%
Page 17
Industry Focus
Indonesia Infrastructure
Construction and
precast
Wijaya Karya
PT PP (Persero)
Waskita Karya
Adhi Karya
Wijaya Karya Beton
Average
Cement
Semen Indonesia
Indocement
Tunggal P.
Holcim Indonesia
Average
Market Cap
(IDR bn)
Price
20,600
19,733
17,169
5,044
10,502
1,765
22,425
13,125
2,800
1,205
77,851
82,552
12,452
Rec.
TP
(IDR)
Diluted PE (x)
FY14 FY15 FY16
FY14
P/B(x)
FY15
FY16
FY14
Hold
Buy
FV
N/R
Buy
3,000
4,650
1,320
N/A
1,200
32.3
37.1
34.0
19.3
32.0
30.9
30.6
26.5
28.9
13.2
32.0
26.2
4,075
FV
12,000
14.0
1,625
3,350
FV
N/R
20,000
N/A
15.7
25.1
18.3
EV/EBITDA (x)
FY15 FY16
24.6
21.9
26.7
10.2
25.1
21.7
5.0
8.3
6.0
3.6
4.9
5.5
4.5
5.0
5.2
2.4
4.5
4.3
4.0
4.2
4.6
2.0
4.0
3.8
15.4
15.8
19.4
11.0
20.2
16.4
13.8
10.3
17.3
7.0
18.1
13.3
11.6
8.5
15.4
5.7
14.4
11.1
0.9%
6.0%
3.2%
1.0%
1.1%
1.0%
4.5%
3.2%
1.6%
1.1%
1.1%
4.8%
3.4%
1.8%
1.4%
19.2%
22.0%
24.8%
19.7%
23.3%
18.2%
21.4%
20.6%
21.0%
16.8%
14.6%
30.3%
13.1%
23.3%
19.9%
14.0
13.1
3.2
2.9
2.6
9.5
9.2
8.4
0.5%
0.8%
0.9%
3.3%
15.5
15.8
15.1
14.7
13.1
13.6
3.3
1.9
2.8
3.3
1.3
2.5
3.0
1.2
2.3
10.4
10.9
10.3
9.9
8.0
9.0
9.2
7.0
8.2
0.0%
0.0%
0.0%
2.7%
0.0%
2.9%
17.7% 17.7%
7.6% 9.6%
3.2%
18.4%
FY14
19.4%
21.2%
21.8%
19.6%
14.6%
0.0%
8.9%
35,000
35%
29.1%
30,000
30%
25,000
25%
16.1%
20,000
26,500
17.8%
17.6%
20%
19,137
15,000
15%
17,100
10,000
5,000
5,100
7,863
0
WIKA
PTPP
4M15
15,400
10%
5%
3,700
3,300
WSKT
ADHI
0%
% achieved
Page 18
in Rp bn
40,000
3.0
2.84
35,000
30,000
2.5
2.17
2.0
2.00
25,000
20,000
1.5
1.28
15,000
1.0
10,000
0.5
5,000
0
0.0
WIKA
Currentorderbook
PTPP
WSKT
FY14Revenue
ADHI
Orderbook/FY14revenue
Industry Focus
Indonesia Infrastructure
WTON is the most direct proxy
We also like WTON as we believe it is the biggest beneficiary of
infrastructure boom in Indonesia, given its dominance in the
Precast market. It controls c.40% market share in Precast vs.
c.5% for the largest player in construction space. Given the
needs for Precast in many infrastructure developments, WTON
serves as the best proxy to infrastructure boom in Indonesia.
Market share of Indonesian Precast Players (by capacity)
24.8%
38.6%
4.0%
4.0%
6.6%
10.1%
15.9%
WTON
API
JB
BPI
PPI
Others
JHS
Source: MARS
Energy
15.0%
Industry
11.0%
Infrastructure
44.0%
Property
17.0%
Mining
13.0%
Source: Company
Page 19
Industry Focus
Indonesia Infrastructure
Key Risks
Currency risks
The IDR has depreciated by c.6% against the USD YTD, to
Rp13,100. This is 7% higher than the assumption in the
APBN-P (revised budget). The weak IDR has implications for
the infrastructure sector.
For the construction and precast players, the biggest risk is the
cancellation of projects, as the Rp290tr infrastructure budget
was based on 12,200 IDR/USD assumption.
If IDR depreciates further to over 14,000, some projects may
be cancelled or postponed. In terms of profitability of SOE
FY14
FY15 (target)
y-o-y
increase
4M14
4M15
y-o-y
increase
4M15 share of
FY15 target
458,692
629,835
37.3%
162,937
180,168
10.6%
28.6%
408,995
576,469
40.9%
117,495
111,322
-5.3%
19.3%
23,475
26,689
13.7%
873
308
-64.7%
1.2%
Other tax
6,293
11,729
86.4%
1,721
1,557
-9.5%
13.3%
87,446
49,534
-43.4%
31,112
16,744
-46.2%
33.8%
984,901
1,294,256
31.4%
314,139
310,100
-1.3%
24.0%
250
84%
83.1%
82%
200
80%
150
78%
76.5%
76%
100
74.8%
74%
50
72%
0
70%
2012
2013
Real
Shortfall
2014
Realization
Page 20
Industry Focus
Indonesia Infrastructure
STOCK PROFILES
Page 21
Wijaya Karya
Refer to important disclosures at the end of this report
25 May 2015
Aggressive target
Price Relative
Rp
Relative Index
414
3,414.0
364
2,914.0
314
2,414.0
264
1,914.0
214
1,414.0
164
914.0
114
414.0
May-11
May-12
May-13
64
May-15
May-14
2013A
11,885
1,150
1,017
570
570
96
96
20
20
96
22
497
34.9
34.9
68.5
17.7
0.6
6.7
0.1
20.6
2014A
12,463
1,399
1,146
615
615
104
104
8
8
104
35
673
32.3
32.3
769.4
15.4
1.0
5.0
0.1
17.7
2015F
14,816
1,611
1,266
649
649
109
109
5
5
109
37
745
30.6
30.6
93.9
13.8
1.1
4.5
0.2
15.4
2016F
18,823
1,986
1,551
809
809
136
136
25
25
136
46
836
24.6
24.6
93.7
11.6
1.4
4.0
0.3
17.2
B: 13
124
S: 5
159
H: 5
www.dbsvickers.com
ed: SGC / sa: MA
3,914.0
6,149
20,600 / 1,567
65.2
33.8
15,366
Company Focus
Wijaya Karya
INVESTMENT THESIS
Profile
Rationale
Valuation
Risks
Page 23
Company Focus
Wijaya Karya
Sensitivity Analysis
Key Assumptions
FY Dec
New contract wins
Blended GP margins
Segmental Breakdown
FY Dec
Revenues (Rp bn)
Construction
Mechanical
Industrial
Real Estate
Others
Total
PBT (Rp bn)
Construction
Mechanical
Industrial
Real Estate
Others
Total
PBT Margins (%)
Construction
Mechanical
Industrial
Real Estate
Others
Total
Income Statement (Rp bn)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
2012A
2013A
2014A
2015F
2016F
17,125
9.7
17,732
11.1
17,774
11.4
23,939
10.8
31,447
10.6
2012A
2013A
2014A
2015F
2016F
4,042
3,183
2,339
842
(501)
9,905
5,094
2,931
2,990
1,132
(262)
11,885
4,731
3,178
3,271
1,283
N/A
12,463
6,936
2,449
3,921
1,510
N/A
14,816
8,488
3,398
5,175
1,762
N/A
18,823
363
210
188
103
(31)
833
349
179
325
349
(185)
1,017
378
295
347
167
0
1,187
445
433
404
195
0
1,476
504
562
444
215
0
1,726
9.0
6.6
8.0
12.2
6.2
6.9
6.1
10.9
30.8
70.8
8.0
9.3
10.6
13.0
N/A
6.4
17.7
10.3
12.9
N/A
5.9
16.6
8.6
12.2
N/A
8.4
8.6
9.5
10.0
9.2
2012A
2013A
2014A
2015F
2016F
9,905
(8,947)
958
(285)
673
(38)
198
0
0
833
(309)
(47)
0
476
476
925
11,885
(10,562)
1,322
(367)
955
(159)
261
(40)
0
1,017
(392)
(54)
0
570
570
1,150
12,463
(11,039)
1,425
(393)
1,031
(124)
363
(124)
0
1,146
(395)
(136)
0
615
615
1,399
14,816
(13,211)
1,605
(472)
1,133
(149)
417
(134)
0
1,266
(474)
(143)
0
649
649
1,611
18,823
(16,822)
2,002
(600)
1,401
(179)
521
(193)
0
1,551
(564)
(178)
0
809
810
1,986
27.9
36.1
9.3
34.3
20.0
24.3
42.0
19.7
4.9
21.7
8.0
7.9
18.9
15.1
9.9
5.5
27.0
23.2
23.7
24.6
9.7
6.8
4.8
20.4
4.9
10.3
27.1
NM
11.1
8.0
4.8
20.6
4.8
11.2
22.6
23.9
11.4
8.3
4.9
17.7
4.3
9.1
33.7
8.3
10.8
7.6
4.4
15.4
3.9
7.4
33.7
8.4
10.6
7.4
4.3
17.2
4.4
8.4
33.7
7.3
Page 24
2015
Margins Trend
9.0%
8.5%
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
2012A
2013A
Operating Margin %
2014A
2015F
2016F
Company Focus
Wijaya Karya
Revenue Trend
1Q2014
2Q2014
3Q2014
4Q2014
1Q2015
4,500
2,792
(2,476)
316
(85)
231
(3)
47
(2)
0
273
(90)
(16)
168
168
275
3,061
(2,708)
353
(93)
260
(28)
42
(17)
0
258
(93)
(50)
115
115
275
2,752
(2,482)
271
(104)
167
(3)
72
(22)
0
214
(78)
(18)
118
118
236
3,858
(3,373)
485
(112)
373
(91)
202
(83)
0
401
(135)
(52)
214
214
484
2,005
(1,821)
185
(82)
103
17
48
(53)
0
115
(48)
(5)
62
62
168
3,500
(29.7)
(34.5)
(26.3)
(6.9)
9.7
0.1
12.7
(31.3)
(10.1)
(14.2)
(36.0)
2.5
40.2
104.7
124.0
81.7
(48.0)
(65.3)
(72.5)
(71.3)
11.3
8.3
6.0
11.5
8.5
3.8
9.8
6.1
4.3
12.6
9.7
5.6
9.2
5.1
3.1
60%
4,000
40%
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Margins (%)
Net Profit Margins (%)
2012A
2013A
2014A
2015F
2016F
1,184
1,197
N/A
N/A
1,544
N/A
1,143
1,348
N/A
11,021
1,640
1,548
N/A
N/A
1,421
N/A
1,118
3,509
N/A
12,595
2,676
1,908
N/A
N/A
2,334
N/A
817
4,416
N/A
15,915
3,065
2,325
N/A
N/A
1,925
N/A
1,425
4,375
N/A
17,073
3,424
2,846
N/A
N/A
2,063
N/A
1,817
5,558
N/A
19,879
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
321
2,557
3,702
934
672
2,594
240
11,021
402
3,089
3,808
1,271
799
2,949
278
12,595
1,691
3,903
2,882
1,324
1,137
3,990
989
15,915
1,691
3,847
3,323
1,524
1,137
4,420
1,132
17,073
1,691
4,906
3,555
2,324
1,137
4,956
1,310
19,879
(552)
288
49.5
97.1
41.8
1.0
1.1
0.4
CASH
CASH
39.6
(324)
(251)
74.6
98.4
39.4
1.0
1.1
0.7
0.1
0.1
36.1
395
(681)
116.0
117.0
32.4
0.9
1.1
0.8
0.1
0.2
29.9
772
(1,290)
108.3
108.8
31.5
0.9
1.1
0.7
0.2
0.3
18.7
1,270
(1,952)
96.3
96.3
35.7
1.0
1.2
0.8
0.3
0.4
14.9
Page 25
20%
2,500
0%
2,000
1,500
-20%
1,000
-40%
500
Revenue
1Q2015
4Q2014
3Q2014
2Q2014
1Q2014
4Q2013
3Q2013
2Q2013
-60%
1Q2013
3,000
4Q2012
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
Net Fixed
Assets 22.1%
Debtors 36.4%
Assocs'/JVs 15.7%
Inventory 6.7%
Bank, Cash
and Liquid
Assets 19.0%
Company Focus
Wijaya Karya
Capital Expenditure
833
92
(113)
(198)
85
(221)
478
(498)
(42)
(115)
0
(417)
(1,073)
(129)
795
204
0
871
0
277
66
(3)
2013A
2014A
2015F
2016F
1,017
94
(184)
(261)
(180)
(195)
290
(605)
(17)
(93)
0
95
(620)
(129)
417
(23)
(80)
185
0
(144)
79
(53)
1,146
131
(225)
(363)
(663)
0
26
(900)
0
0
0
0
(900)
(207)
1,200
0
0
993
0
119
116
(147)
1,266
213
(169)
(417)
(682)
0
212
(600)
0
0
0
0
(600)
(219)
200
0
0
(19)
0
(407)
151
(66)
1,550
244
(474)
(521)
(588)
0
212
(600)
0
0
0
0
(600)
(272)
800
0
0
528
0
140
135
(65)
1000
900
800
700
600
500
400
300
200
100
0
2012A
2013A
2014A
3852
Rp
3652
S.No.
10
3452
1:
2:
3:
3252
3052
2852
2452
11
2652
2252
2052
May-14
Sep-14
Jan-15
Note : Share price and Target price are adjusted for corporate actions.
Page 26
May-15
4:
5:
6:
7:
8:
9:
10:
11:
2015F
Closing
Price
25 Jun 14 2160
31 Jul 14
2650
04 Aug 14 2615
Date
19 Aug 14
03 Nov 14
19 Nov 14
20 Nov 14
02 Jan 15
26 Jan 15
18 Mar 15
04 May 15
2885
2875
3075
3005
3675
3550
3530
2975
Target
Price
3150
3150
3150
3150
3150
2950
3200
3200
4050
4000
3000
Rating
Buy
Buy
Buy
Buy
Buy
Buy
Hold
Hold
Buy
Buy
Hold
2016F
PT PP (Persero)
Refer to important disclosures at the end of this report
25 May 2015
Safest bet
Analyst
CHONG Tjen San, CFA +603 2604 3972
tjensan@alliancedbs.com
Price Relative
Rp
Relative Index
493
4,247.5
443
3,747.5
393
3,247.5
343
2,747.5
293
2,247.5
243
1,747.5
193
1,247.5
143
747.5
93
247.5
May-11
May-12
PT PP (Persero) (LHS)
May-13
May-14
43
May-15
2013A
11,656
1,087
767
421
421
87
87
36
36
87
26
410
46.9
46.9
30.3
17.9
0.6
9.9
CASH
23.1
2014A
12,427
1,272
919
532
532
110
110
26
26
110
22
493
37.1
37.1
69.9
15.8
0.5
8.3
0.1
24.3
2015F
16,830
1,864
1,357
745
745
154
154
40
40
154
31
813
26.5
26.5
88.5
10.3
0.8
5.0
CASH
23.6
2016F
20,662
2,296
1,695
902
902
186
186
21
21
186
37
969
21.9
21.9
74.2
8.5
0.9
4.2
CASH
20.9
B: 18
3
144
S: 1
0
191
H: 0
www.dbsvickers.com
ed: SGC / sa: MA
4,842
19,733 / 1,501
51.0
6.2
42.8
12,802
Company Focus
PT PP (Persero)
INVESTMENT THESIS
Profile
Rationale
Valuation
Risks
Funds outflow
PTPP's share price has performed well, with an increase in
foreign shareholding. But should there be a large outflow
of foreign funds, the stock could be de-rated.
Page 28
Company Focus
PT PP (Persero)
Sensitivity Analysis
Key Assumptions
FY Dec
New Contract Won
Gross Profit Margin
Segmental Breakdown
FY Dec
Revenues (Rp bn)
Construction
Real Estate
Property
EPC
Total
Gross Profit (Rp bn)
Construction
Real Estate
Property
EPC
Total
Gross Profit Margins (%)
Construction
Real Estate
Property
EPC
Total
Income Statement (Rp bn)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
2012A
2013A
2014A
2015F
2016F
19,475
10.7
19,584
10.9
22,668
12.3
26.839
13.0
32,078
13.0
2012A
2013A
2014A
2015F
2016F
6,529
124
1,351
0
8,004
9,952
259
1,445
0
11,656
10,662
645
1,091
29
12,427
13,761
1,500
1,527
41
16,830
16,669
1,950
1,986
58
20,662
662
31
161
161
1,015
1,077
57
139
139
1,411
1,232
250
143
143
1,675
1,486
525
176
176
2,363
1,800
663
228
228
2,920
10.1
25.1
11.9
N/A
12.7
10.8
22.0
9.6
N/A
12.1
11.6
38.7
13.1
486.6
13.5
10.8
35.0
11.5
427.7
14.0
10.8
34.0
11.5
397.1
14.1
2012A
2013A
2014A
2015F
2016F
8,004
(7,149)
855
(144)
711
(115)
145
(195)
0
545
(236)
0
0
310
310
714
11,656
(10,383)
1,273
(200)
1,073
(148)
96
(255)
0
767
(346)
0
0
421
421
1,087
12,427
(10,894)
1,533
(276)
1,257
(95)
72
(315)
0
919
(387)
0
0
532
532
1,272
16,830
(14,643)
2,187
(342)
1,845
(192)
87
(383)
0
1,357
(529)
(83)
0
745
745
1,864
20,662
(17,970)
2,692
(420)
2,272
(245)
109
(441)
0
1,695
(649)
(143)
0
902
902
2,296
28.4
23.9
23.7
28.9
45.6
52.2
51.0
35.9
6.6
17.0
17.1
26.4
35.4
46.6
46.8
40.1
22.8
23.1
23.1
21.1
10.7
8.9
3.9
20.1
4.0
11.8
38.7
3.6
10.9
9.2
3.6
23.1
4.0
13.2
40.8
4.2
12.3
10.1
4.3
24.3
3.9
12.8
25.3
4.0
13.0
11.0
4.4
23.6
4.6
15.4
28.0
4.8
13.0
11.0
4.4
20.9
4.6
15.4
24.2
5.2
Page 29
2015
Margins Trend
12.0%
11.0%
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2012A
2013A
Operating Margin %
2014A
2015F
2016F
Company Focus
PT PP (Persero)
30.2
56.5
68.4
38.8
23.1
63.3
41.1
68.2
44.1
68.7
68.3
68.6
(57.1)
(69.0)
(65.4)
(61.3)
9.9
6.9
3.1
13.0
9.0
3.3
11.7
10.3
4.5
13.4
12.0
5.2
14.0
9.7
4.7
2012A
2013A
2014A
2015F
2016F
73
61
228
1,444
1,566
4,323
856
8,551
142
70
407
2,573
1,777
6,389
1,058
12,416
494
147
426
2,611
2,675
7,244
1,015
14,612
658
147
426
3,952
3,205
8,530
1,015
17,933
845
147
426
4,358
3,933
10,473
1,015
21,197
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
1,266
4,244
523
530
333
1,656
0
8,551
1,475
6,300
1,001
813
842
1,984
1
12,416
1,475
7,022
1,342
1,455
928
2,389
1
14,612
1,475
8,213
1,342
1,955
928
3,937
84
17,933
1,475
10,079
1,342
2,455
928
4,690
227
21,197
1,978
(351)
168.7
196.8
80.5
1.0
1.4
1.0
0.2
0.2
5.8
NA
1,923
286
167.7
185.6
58.8
1.1
1.3
1.0
CASH
CASH
4.1
NA
2,571
(319)
200.2
223.5
74.7
0.9
1.4
1.0
0.1
0.1
5.5
NA
3,195
523
171.1
190.1
73.4
1.0
1.5
1.1
CASH
CASH
5.4
NA
4,000
428
167.8
186.0
72.6
1.1
1.5
1.1
CASH
CASH
5.4
NA
Page 30
100%
3,500
3,000
50%
2,500
2,000
0%
1,500
1,000
-50%
500
0
-100%
Revenue
1Q2015
(54.6)
(72.6)
(72.1)
(69.6)
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Margins (%)
Net Profit Margins (%)
4,000
4Q2014
1,982
(1,704)
278
(86)
192
(20)
3
(13)
0
162
(68)
0
94
94
175
3Q2014
4,619
(3,999)
621
(66)
555
(20)
30
(174)
0
390
(148)
0
242
242
564
2Q2014
3,205
(2,829)
375
(46)
330
(22)
27
(97)
0
238
(94)
0
143
143
335
1Q2014
2,603
(2,264)
339
(105)
234
(35)
7
(35)
0
169
(84)
0
85
85
205
150%
4,500
4Q2013
1,999
(1,802)
198
(59)
139
(17)
9
(9)
0
122
(61)
0
61
61
131
5,000
3Q2013
1Q2015
2Q2013
4Q2014
1Q2013
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
Revenue Trend
3Q2014
4Q2012
Debtors 55.9%
Inventory 20.6%
Bank, Cash
and Liquid
Assets 18.6%
Company Focus
PT PP (Persero)
Capital Expenditure
2012A
2013A
2014A
2015F
2016F
545
3
(236)
0
(530)
413
196
(105)
(411)
32
0
18
(465)
(79)
337
0
0
258
8
(3)
150
19
767
14
(346)
0
55
161
651
(93)
(35)
(106)
0
(129)
(363)
(93)
529
0
223
659
(6)
940
123
115
919
15
(387)
0
(648)
384
282
(160)
(192)
(78)
0
(95)
(525)
(126)
369
0
0
243
0
0
192
25
1,357
20
(529)
0
(625)
0
223
(184)
0
0
0
0
(184)
(106)
500
909
0
1,302
0
1,342
175
8
1,695
24
(649)
0
(804)
0
266
(211)
0
0
0
0
(211)
(149)
500
0
0
351
0
405
221
11
250
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
200
150
100
50
0
2012A
2013A
Rp
10
8
9
3634
7
3134
2634
34
5
2
2134
1634
May-14
Sep-14
Jan-15
May-15
Not e : Share price and Target price are adjusted for corporate actions.
Page 31
1:
2:
Cl o s i n g Ta rg e t
Pri c e
Pri c e
25 Jun 14 1795
2250
31 Jul 14
2260
2250
3:
13 Aug 14
2435
2250
4:
19 Aug 14
2435
2250
Hold
5:
06 Nov 14
2655
2250
Hold
6:
7:
20 Nov 14
02 Jan 15
2955
3590
3300
3300
Hold
Buy
8:
26 Jan 15
3750
4650
Buy
9:
03 Mar 15
3980
4650
Buy
10:
04 May 15
3890
4650
Buy
S.No .
2015F
4134
2014A
Da te
R a ti n g
Buy
Buy
Hold
2016F
Waskita Karya
Refer to important disclosures at the end of this report
25 May 2015
Analyst
CHONG Tjen San, CFA +603 2604 3972
tjensan@alliancedbs.com
Deidy WIJAYA +6221 3003 4931
Deidy.Wijaya@id.dbsvickers.com
Price Relative
Rp
Relative Index
1,942.0
389
1,742.0
1,542.0
339
1,342.0
289
1,142.0
239
942.0
189
742.0
139
542.0
342.0
Dec-12
89
Jun-13
Dec-13
Jun-14
Dec-14
2013A
9,687
734
611
368
368
38
38
0
0
38
11
247
46.2
46.2
nm
23.8
0.6
7.1
0.2
16.8
2014A
10,287
952
756
502
502
52
52
36
36
52
16
294
34.0
34.0
nm
19.4
0.9
6.0
0.5
19.2
2015F
12,927
1,113
892
594
594
61
61
18
18
61
18
338
28.9
28.9
141.6
17.3
1.0
5.2
0.6
19.4
2016F
16,203
1,321
1,009
642
642
66
66
8
8
66
20
386
26.7
26.7
nm
15.4
1.1
4.6
0.8
18.2
B: 12
0
63
S: 3
0
84
H: 2
www.dbsvickers.com
ed: SGC / sa: MA
9,728
17,169 / 1,306
68.0
32.0
30,468
Company Focus
Waskita Karya
INVESTMENT THESIS
Profile
Rationale
Valuation
Risks
Unsustainable margins
We are cautious of the sustainability of its precast
margins (18%) as Wika Beton (market leader in precast) is
only registering 13-15% GPM.
Policy risk
New government is unable to speed up infrastructure
development in Indonesia.
Funds outflow
Derating of Indonesia's stocks as foreign investors shift
funds elsewhere.
Page 33
Company Focus
Waskita Karya
Key Assumptions
FY Dec
New contract wins
Construction GPM (%)
Segmental Breakdown
FY Dec
Revenues (Rp bn)
Construction
Building rentals/Property
Precast
Energy
Total
Gross Profit (Rp bn)
Construction
Building rentals/Property
Precast
Energy
Total
Gross Profit Margins (%)
Construction
Building rentals/Property
Precast
Energy
Total
Income Statement (Rp bn)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
2012A
2013A
2014A
2015F
2016F
12,264
8.9
13,318
9.4
22,700
10.1
22,000
9.7
25,800
9.5
2012A
2013A
2014A
2015F
2016F
8,808
1
0
0
8,808
9,559
0
127
0
9,687
9,484
0
803
0
10,287
11,723
0
1,204
0
12,927
14,397
0
1,806
0
16,203
781
1
(50)
0
732
899
0
12
0
911
963
0
146
0
1,109
1,137
0
169
0
1,306
1,368
0
199
0
1,567
8.9
100.0
N/A
N/A
8.3
9.4
100.0
9.3
N/A
9.4
10.1
100.0
18.2
N/A
10.8
9.7
100.0
14.0
N/A
10.1
9.5
100.0
11.0
N/A
9.7
2012A
2013A
2014A
2015F
2016F
8,808
(8,076)
732
(285)
448
57
94
(138)
0
460
(206)
0
0
254
254
632
9,687
(8,776)
911
(340)
571
8
103
(70)
0
611
(243)
0
0
368
368
734
10,287
(9,178)
1,109
(431)
678
20
197
(140)
0
756
(254)
0
0
502
502
952
12,927
(11,621)
1,306
(450)
856
0
186
(150)
0
892
(299)
0
0
594
594
1,113
16,203
(14,636)
1,567
(564)
1,003
0
228
(223)
0
1,009
(367)
0
0
642
643
1,321
21.1
31.6
5.3
47.7
10.0
16.2
27.5
44.9
6.2
29.7
18.9
36.3
25.7
16.9
26.2
18.4
25.3
18.7
17.1
8.1
8.3
5.1
2.9
19.3
3.8
8.0
8.0
3.3
9.4
5.9
3.8
16.8
4.3
8.1
30.0
8.2
10.8
6.6
4.9
19.2
4.7
8.2
30.0
4.8
10.1
6.6
4.6
19.4
4.4
7.6
30.0
5.7
9.7
6.2
4.0
18.2
4.0
7.2
30.0
4.5
Page 34
Surge in precast
contribution because WSKT
supply to affiliated toll
roads
Margins Trend
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
2012A
2013A
Operating Margin %
2014A
2015F
2016F
Company Focus
Waskita Karya
Revenue Trend
3Q2014
4Q2014
1Q2015
6,000
150%
5,000
(72.0)
(81.3)
(76.2)
(96.8)
10.7
6.1
0.7
9.4
3.8
2.5
9.0
4.3
3.3
12.2
9.0
7.4
11.2
7.6
0.8
2012A
2013A
2014A
2015F
2016F
240
124
212
2,208
393
4,731
458
8,366
415
343
249
1,144
281
5,654
702
8,788
622
735
661
1,700
327
7,261
1,236
12,542
1,151
735
661
2,070
385
8,115
1,520
14,638
1,763
735
661
1,980
485
10,172
1,845
17,639
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
1,172
3,568
552
747
320
2,007
0
8,366
875
4,086
466
748
230
2,382
1
8,788
1,917
5,272
539
1,246
719
2,843
6
12,542
1,917
5,925
539
2,246
719
3,286
6
14,638
1,917
7,463
539
3,246
719
3,750
6
17,639
1,462
289
165.8
141.9
16.9
1.3
1.5
1.3
CASH
CASH
4.3
NA
2,085
(479)
195.7
160.1
14.1
1.1
1.4
1.3
0.2
0.2
14.1
NA
3,014
(1,463)
229.1
187.2
12.2
1.0
1.4
1.2
0.5
0.5
10.4
NA
3,557
(2,092)
217.1
176.9
11.3
1.0
1.4
1.2
0.6
0.6
14.4
NA
4,500
(3,183)
206.0
167.9
10.9
1.0
1.5
1.2
0.8
0.8
13.6
NA
Page 35
-100%
Revenue
1Q2015
138.5
242.5
394.9
445.6
-50%
1,000
4Q2014
(2.2)
9.9
12.1
26.1
0%
2,000
3Q2014
107.5
130.9
28.6
701.2
50%
3,000
2Q2014
(77.2)
(83.6)
(80.8)
(97.3)
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Margins (%)
Net Profit Margins (%)
100%
4,000
1Q2014
1,403
(1,246)
157
(50)
107
(18)
11
(50)
0
50
(38)
0
12
12
100
4Q2013
5,006
(4,397)
609
(158)
451
(4)
89
(55)
0
480
(108)
0
372
372
536
3Q2013
2,099
(1,911)
188
(97)
91
2
63
(31)
0
125
(57)
0
68
68
156
2Q2013
2,147
(1,945)
202
(120)
81
30
31
(36)
0
107
(53)
0
54
54
142
1Q2013
1,035
(924)
111
(47)
63
(15)
14
(18)
0
44
(37)
0
7
7
62
4Q2012
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
Debtors 68.4%
Inventory 3.1%
Bank, Cash
and Liquid
Assets 15.8%
Company Focus
Waskita Karya
Capital Expenditure
2012A
2013A
2014A
2015F
2016F
460
34
(206)
0
(678)
203
(188)
(82)
(42)
(115)
0
212
(28)
0
795
204
815
1,815
0
1,599
74
(40)
611
53
(243)
0
(623)
(183)
(385)
(229)
(17)
(135)
1
2
(379)
(20)
(297)
0
0
(317)
0
(1,081)
25
(64)
756
56
(254)
0
(753)
107
(89)
(329)
0
(755)
1
0
(1,082)
(110)
1,782
59
(3)
1,728
0
557
69
(43)
892
71
(299)
0
(543)
0
121
(600)
0
0
0
0
(600)
(150)
1,000
0
0
850
0
371
68
(49)
1,008
89
(367)
0
(944)
0
(213)
(700)
0
0
0
0
(700)
(178)
1,000
0
0
822
0
(91)
75
(94)
800
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
700
600
500
400
300
200
100
0
2012A
2013A
2014A
Rp
1617
1417
10
1217
6
1017
4
3
2
817
617
May-14
Sep-14
Jan-15
May-15
Not e : Share price and Target price are adjusted for corporate actions.
Page 36
1:
2:
Cl o s i n g Ta rg e t
Pri c e
Pri c e
25 Jun 14
670
850
31 Jul 14
810
850
3:
13 Aug 14
875
850
4:
19 Aug 14
925
850
Buy
5:
06 Nov 14
960
850
Hold
6:
7:
20 Nov 14
02 Jan 15
1025
1465
965
965
Hold
Hold
S.No .
2016F
1817
2015F
Da te
R a ti n g
Buy
Buy
Buy
8:
26 Jan 15
1570
1100
Fully Valued
9:
27 Feb 15
1815
1320
Fully Valued
10:
04 May 15
1650
1320
Fully Valued
25 May 2015
Relative Index
1,531.0
229
1,331.0
Price Relative
Rp
209
189
1,131.0
169
931.0
149
129
731.0
109
531.0
Apr-14
89
Sep-14
2013A
2,644
393
329
243
243
36
36
34
34
36
16
101
33.3
33.3
45.1
21.0
1.4
11.9
0.2
39.2
Feb-15
2014A
3,277
499
412
329
329
38
38
4
4
38
13
246
32.0
32.0
54.1
20.2
1.1
4.9
CASH
23.3
2015F
3,921
552
435
328
328
38
38
0
0
38
13
270
32.0
32.0
14.4
18.1
1.1
4.5
CASH
14.6
2016F
5,175
696
556
418
418
48
48
27
27
48
17
302
25.1
25.1
14.7
14.4
1.4
4.0
CASH
16.8
B: 7
(17)
43
S: 2
(17)
56
H: 1
www.dbsvickers.com
ed: SGC / sa: MA
8,715
10,502 / 799
60.0
11.2
28.8
21,803
Company Focus
Wijaya Karya Beton
INVESTMENT THESIS
Profile
Rationale
Valuation
Risks
Page 38
Company Focus
Wijaya Karya Beton
Sensitivity Analysis
Key Assumptions
FY Dec
Gross profit margin
Sales volume
Utilization rate (%)
Segmental Breakdown
FY Dec
Revenues (Rp bn)
Concrete
Service
Head office
Total
Gross Profit (Rp bn)
Concrete
Service
Head office
Total
Gross Profit Margins
Concrete
Service
Head office
Total
Income Statement (Rp bn)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
2012A
2013A
2014A
2015F
2016F
13.1
1,439
77.8
14.7
1,457
72.8
14.9
1,617
73.5
13.0
1,811
78.8
12.8
2,174
86.9
2012A
2013A
2014A
2015F
2016F
2,017
13
0
2,031
2,622
22
0
2,644
3,228
50
0
3,277
3,872
49
0
3,921
5,111
64
0
5,175
262
3
(34)
231
334
3
0
336
403
6
0
409
425
6
0
431
551
8
0
558
13.0
24.7
N/A
11.4
12.7
11.7
N/A
12.7
12.5
12.0
0.0
12.5
11.0
12.0
N/A
11.0
10.8
12.0
N/A
10.8
2012A
2013A
2014A
2015F
2016F
2,031
(1,765)
265
(34)
231
0
0
2
0
234
(54)
0
0
179
179
276
2,644
(2,256)
388
(52)
336
(4)
0
(4)
0
329
(87)
2
0
243
243
393
3,277
(2,790)
487
(78)
409
(3)
0
6
0
412
(89)
6
0
329
329
499
3,921
(3,413)
509
(78)
431
0
0
4
0
435
(109)
3
0
328
328
552
5,175
(4,514)
661
(103)
558
0
0
(3)
0
556
(139)
2
0
418
419
696
24.2
29.0
31.2
23.9
30.2
42.3
45.4
35.7
24.0
27.1
21.6
35.3
19.7
10.4
5.3
0.0
32.0
26.3
29.7
27.4
13.1
11.4
8.8
36.2
8.4
32.4
35.0
NM
14.7
12.7
9.2
39.2
9.1
25.5
45.5
92.9
14.9
12.5
10.0
23.3
9.8
15.4
35.0
NM
13.0
11.0
8.4
14.6
6.8
10.1
35.0
NM
12.8
10.8
8.1
16.8
6.5
11.3
35.0
162.8
Margins Trend
Page 39
2015
14.0%
13.0%
12.0%
11.0%
10.0%
9.0%
8.0%
7.0%
2012A
2013A
Operating Margin %
2014A
2015F
2016F
Company Focus
Wijaya Karya Beton
Revenue Trend
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Margins (%)
Net Profit Margins (%)
Balance Sheet (Rp bn)
FY Dec
Net Fixed Assets
Invts in Associates & JVs
Invt & Devt Properties
Other LT Assets
Cash & ST Invts
Dev Props held for sale
Inventory
Debtors
Other Current Assets
Total Assets
955
(805)
150
(24)
125
2
0
0
0
128
(25)
2
105
105
127
428
(393)
34
(18)
16
(2)
0
3
0
17
(2)
2
17
17
14
35.2
74.6
78.6
64.6
6.2
(4.6)
(5.9)
14.7
(25.5)
(47.1)
(42.3)
(44.7)
48.2
123.4
102.1
106.4
(55.2)
(88.9)
(87.1)
(83.8)
15.7
14.0
9.9
15.0
12.4
10.7
12.4
9.6
7.9
15.7
13.1
11.0
8.0
3.8
4.0
2013A
2014A
2015F
2016F
20%
800,000
0%
600,000
-20%
400,000
-40%
200,000
-60%
-80%
Revenue
1,012
0
N/A
N/A
413
N/A
846,027
421,906
N/A
2,917
1,671
0
N/A
N/A
1,038
N/A
457,603
475,688
N/A
3,802
2,050
0
N/A
N/A
1,600
N/A
1,262,585
537,009
N/A
5,808
2,513
0
N/A
N/A
1,666
N/A
1,678,790
708,717
N/A
7,014
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
19
421
1,338
0
19
558
46
2,401
173
325
1,297
369
24
680
50
2,917
565
420
524
1
89
2,144
59
3,802
565
455
1,833
452
89
2,357
57
5,808
565
605
2,519
552
89
2,629
55
7,014
(305)
321
55.4
80.0
168.1
1.0
1.0
0.4
CASH
CASH
894.0
NA
(139)
(128)
50.5
62.0
143.6
1.0
1.1
0.5
0.2
0.2
84.0
3.6
144
472
50.0
50.4
88.2
1.0
1.4
1.0
CASH
CASH
123.6
5.3
(135)
583
47.1
48.5
95.4
0.8
1.3
0.7
CASH
CASH
49.1
3.1
(293)
549
43.9
44.2
122.6
0.8
1.2
0.6
CASH
CASH
53.7
2.7
Page 40
40%
1Q2015
644
(564)
80
(18)
62
(5)
0
5
0
62
(13)
1
51
51
57
4Q2014
864
(735)
129
(22)
107
0
0
8
0
116
(26)
2
92
92
108
60%
1,000,000
3Q2014
814
(686)
128
(14)
114
(1)
0
(8)
0
105
(26)
1
80
80
113
1,200,000
2Q2014
1Q2015
1Q2014
4Q2014
4Q2013
3Q2014
3Q2013
2Q2014
2Q2013
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
1Q2014
1Q2013
FY Dec
4Q2012
Debtors 13.1%
Inventory 12.6%
Net Fixed
Assets 45.9%
Assocs'/JVs 0.0%
Bank, Cash
and Liquid
Assets 28.5%
Company Focus
Wijaya Karya Beton
Capital Expenditure
2013A
2014A
2015F
2016F
329
62
(184)
0
(166)
140
180
(454)
0
0
0
0
(454)
(63)
519
(53)
0
403
0
128
51
(41)
412
96
(89)
0
(283)
59
194
(700)
0
0
0
0
(700)
(115)
392
1,193
0
1,470
0
965
55
(58)
435
123
(109)
0
279
0
728
(500)
0
0
0
0
(500)
(115)
451
0
0
336
0
564
52
26
555
140
(139)
0
158
0
714
(600)
0
0
0
0
(600)
(146)
100
0
0
(46)
0
68
64
13
800000
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
234
44
(113)
0
84
45
294
(174)
0
0
0
0
(174)
(51)
0
46
0
(5)
0
115
32
18
700000
600000
500000
400000
300000
200000
100000
0
2012A
2013A
2014A
Rp
1388
1288
1188
1
1088
2
3
988
888
788
688
May-14
Sep-14
Jan-15
Not e : Share price and Target price are adjusted for corporate actions.
Page 41
1:
2:
Cl o s i n g Ta rg e t
Pri c e
Pri c e
19 Sep 14 1200
1200
13 Oct 14 1050
1200
3:
06 Nov 14
1120
1200
4:
20 Nov 14
1200
1200
Buy
5:
26 Jan 15
1330
1600
Buy
6:
7:
10 Mar 15
04 May 15
1360
975
1600
1200
Buy
Buy
S.No .
2015F
Da te
R a ti n g
Hold
Buy
Buy
2016F
Semen Indonesia
Refer to important disclosures at the end of this report
25 May 2015
Analyst
Deidy WIJAYA +6221 3003 4931
Deidy.Wijaya@id.dbsvickers.com
CHONG Tjen San, CFA +603 2604 3972
tjensan@alliancedbs.com
Price Relative
Rp
Relative Index
219
18,930.0
199
16,930.0
179
14,930.0
159
12,930.0
139
10,930.0
119
8,930.0
99
6,930.0
May-11
May-12
May-13
May-14
79
May-15
2013A
24,501
8,099
6,920
5,370
5,370
905
905
11
11
905
407
3,521
14.5
14.5
12.9
9.6
3.1
3.7
CASH
28.1
2014F
26,987
8,195
7,091
5,566
5,566
938
938
4
4
938
422
4,052
14.0
14.0
12.2
9.5
3.2
3.2
CASH
24.8
2015F
28,990
8,443
7,200
5,565
5,565
938
938
0
0
938
422
4,568
14.0
14.0
11.6
9.2
3.2
2.9
CASH
21.8
2016F
32,134
9,093
7,679
5,941
5,941
1,002
1,002
7
7
1,002
451
5,147
13.1
13.1
10.8
8.4
3.4
2.6
CASH
20.6
B: 19
953
S: 7
1,070
H: 8
www.dbsvickers.com
ed: SGC / sa: MA
5,932
77,851 / 5,922
60.0
40.0
5,955
Company Focus
Semen Indonesia
INVESTMENT THESIS
Profile
Rationale
Valuation
Risks
Our target price of Rp12,000 is pegged to 12x FY16 EPS (1SD of 5-year mean). Maintain FULLY VALUED call.
Page 43
Company Focus
Semen Indonesia
Key Assumptions
FY Dec
Sensitivity Analysis
2012A
2013A
2014F
2015F
2016F
22,478
25,450
26,485
27,350
29,100
850,692
35.0
904,542
33.1
954,291
30.4
978,149
29.1
1,017,275
28.3
Segmental Breakdown
FY Dec
2012A
2013A
2014F
2015F
2016F
19,195
404
19,598
24,152
370
24,522
26,335
652
26,987
28,393
596
28,990
31,449
686
32,134
5,947
162
6,109
6,998
(26)
6,972
7,078
(124)
6,954
7,019
119
7,139
7,446
137
7,583
31.0
40.0
31.2
29.0
(7.0)
28.4
26.9
(19.0)
25.8
24.7
20.0
24.6
23.7
20.0
23.6
2012A
2013A
2014F
2015F
2016F
19,598
(10,301)
9,298
(3,189)
6,109
73
28
78
0
6,287
(1,361)
(79)
0
4,847
4,847
6,869
24,501
(13,557)
10,944
(3,972)
6,972
91
35
(177)
0
6,920
(1,566)
16
0
5,370
5,370
8,099
26,987
(15,388)
11,599
(4,645)
6,954
202
32
(97)
0
7,091
(1,517)
(8)
0
5,566
5,566
8,195
28,990
(16,903)
12,086
(4,948)
7,139
80
43
(62)
0
7,200
(1,629)
(5)
0
5,565
5,565
8,443
32,134
(19,077)
13,057
(5,475)
7,583
80
48
(32)
0
7,679
(1,738)
0
0
5,941
5,941
9,093
19.7
27.2
26.3
23.5
25.0
17.9
14.1
10.8
10.1
1.2
(0.3)
3.6
7.4
3.0
2.7
0.0
10.8
7.7
6.2
6.7
47.4
31.2
24.7
30.5
21.0
24.6
45.0
NM
44.7
28.5
21.9
28.1
18.7
22.5
45.0
39.4
43.0
25.8
20.6
24.8
17.1
20.1
45.0
71.8
41.7
24.6
19.2
21.8
15.6
18.4
45.0
115.5
40.6
23.6
18.5
20.6
15.1
17.7
45.0
235.7
Page 44
2015
Domestic sales
volume +/- 5%
EBITDA margin +/50bps
Margins Trend
33.0%
31.0%
29.0%
27.0%
25.0%
23.0%
21.0%
19.0%
17.0%
2012A
2013A
Operating Margin %
2014F
2015F
2016F
Company Focus
Semen Indonesia
4Q2014
1Q2015
9,000
25%
8,000
20%
7,000
15%
6,000
10%
5,000
5%
18.2
16.5
19.2
17.1
(17.0)
(16.1)
(19.6)
(19.5)
43.3
26.5
21.1
46.0
28.7
22.7
41.6
23.9
19.5
41.2
24.1
19.3
40.4
23.4
18.8
2012A
2013A
2014F
2015F
2016F
16,794
0
1,554
3,317
2,285
2,523
106
26,579
18,863
0
1,958
4,213
2,646
2,916
197
30,793
21,622
0
1,958
3,837
3,302
3,212
222
34,153
23,817
0
1,958
4,211
3,627
3,450
242
37,306
25,807
0
1,958
5,575
4,093
3,825
272
41,530
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
350
2,691
1,784
3,222
367
17,347
818
26,579
321
2,822
2,155
3,242
449
20,883
921
30,793
321
3,224
2,296
2,902
449
24,032
929
34,153
321
3,529
2,419
2,562
449
27,093
934
37,306
321
3,973
2,601
2,722
449
30,529
934
41,530
439
(255)
40.8
86.4
82.1
0.8
1.7
1.2
0.0
0.0
95.4
10.3
782
650
40.5
80.9
72.4
0.9
1.9
1.3
CASH
CASH
71.4
19.2
1,216
614
41.4
78.0
76.7
0.8
1.8
1.2
CASH
CASH
124.1
18.0
1,372
1,329
41.9
79.0
81.1
0.8
1.8
1.2
CASH
CASH
121.4
17.4
1,615
2,532
41.3
77.9
80.2
0.8
2.0
1.4
CASH
CASH
115.0
NA
Page 45
2,000
-10%
1,000
-15%
-20%
Revenue
1Q2015
(3.6)
(15.7)
(19.6)
(17.1)
-5%
4Q2014
8.6
15.0
17.4
16.9
0%
3,000
3Q2014
(13.1)
(13.6)
(14.9)
(11.0)
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Margins (%)
Net Profit Margins (%)
4,000
2Q2014
6,340
(3,781)
2,560
(1,078)
1,481
8
7
5
0
1,501
(307)
(4)
1,190
1,190
1,850
1Q2014
7,638
(4,490)
3,148
(1,304)
1,844
103
10
(59)
0
1,897
(417)
(3)
1,478
1,478
2,204
4Q2013
6,463
(3,776)
2,688
(1,141)
1,547
58
7
(27)
0
1,584
(326)
4
1,262
1,262
1,892
3Q2013
6,708
(3,620)
3,088
(1,163)
1,924
26
8
(8)
0
1,951
(420)
(7)
1,523
1,523
2,245
2Q2013
6,178
(3,503)
2,675
(1,036)
1,639
16
7
(3)
0
1,658
(354)
(2)
1,303
1,303
1,953
1Q2013
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
Revenue Trend
3Q2014
4Q2012
Net Fixed
Assets 67.9%
Assocs'/JVs 0.0%
Inventory 10.4%
Bank, Cash
and Liquid
Assets 11.6%
Company Focus
Semen Indonesia
2012A
2013A
2014F
2015F
2016F
Capital Expenditure
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
6,287
760
0
0
436
(531)
5,592
(3,408)
(1,374)
0
0
7
(4,774)
(1,976)
831
0
(26)
(1,171)
0
(354)
869
368
6,920
1,127
0
0
(585)
151
6,047
(2,544)
0
0
0
(131)
(2,675)
(2,211)
(112)
0
0
(2,324)
0
1,048
1,118
591
7,091
1,241
0
0
(433)
0
6,381
(4,000)
0
0
0
0
(4,000)
(2,417)
(340)
0
0
(2,757)
0
(376)
1,149
401
7,200
1,305
0
0
(156)
0
6,719
(3,500)
0
0
0
0
(3,500)
(2,505)
(340)
0
0
(2,845)
0
374
1,159
543
7,679
1,510
0
0
(243)
0
7,208
(3,500)
0
0
0
0
(3,500)
(2,504)
160
0
0
(2,345)
0
1,363
1,256
625
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2012A
2013A
2014F
CAPEX to fund
expansion projects
Rp
15875
2
14875
1
13875
12875
3
11875
May-14
Sep-14
Jan-15
Not e : Share price and Target price are adjusted for corporate actions.
Page 46
1:
2:
Cl o s i n g Ta rg e t
R a ti n g
Pri c e
Pri c e
18 Feb 15 14775 12200 Fully Valued
03 Mar 15 14825 12200 Fully Valued
3:
14 Apr 15
S.No .
16875
2015F
Da te
12850
2016F
Indocement Tunggal P.
Refer to important disclosures at the end of this report
25 May 2015
JCI : 5,315.15
Price Target : 12-Month Rp 20,000
Reason for Report : Sector update
Potential Catalyst: Strong rebound in domestic sales volume
Where we differ: FY16 EPS is 7% below consensus
Analyst
Deidy WIJAYA +6221 3003 4931
Deidy.Wijaya@id.dbsvickers.com
CHONG Tjen San, CFA +603 2604 3972
tjensan@alliancedbs.com
Price Relative
Rp
Relative Index
28,080.0
207
26,080.0
187
24,080.0
22,080.0
167
20,080.0
147
18,080.0
127
16,080.0
107
14,080.0
87
12,080.0
10,080.0
May-11
May-12
May-13
2013A
18,691
6,785
6,595
5,010
5,010
1,361
1,361
5
5
1,361
900
6,234
16.5
16.5
15.2
10.3
4.0
3.6
CASH
23.7
May-14
67
May-15
2014A
19,996
6,732
6,790
5,271
5,271
1,432
1,432
5
5
1,432
1,350
6,765
15.7
15.7
15.2
10.4
6.0
3.3
CASH
22.0
2015F
21,340
7,189
7,018
5,330
5,330
1,448
1,448
1
1
1,448
1,014
6,864
15.5
15.5
13.3
9.9
4.5
3.3
CASH
21.2
2016F
24,134
7,739
7,388
5,611
5,611
1,524
1,524
5
5
1,524
1,067
7,374
14.7
14.7
12.9
9.2
4.8
3.0
CASH
21.4
B: 19
(2)
1,464
S: 7
(2)
1,641
H: 9
www.dbsvickers.com
ed: SGC / sa: MA
3,681
82,552 / 6,280
64.1
13.0
22.9
3,252
Company Focus
Indocement Tunggal P.
INVESTMENT THESIS
Profile
Rationale
Valuation
Risks
Our target price of Rp20,000 is pegged to 13x FY16 EPS (1SD of 5-year mean). Maintain FULLY VALUED call.
Page 48
Company Focus
Indocement Tunggal P.
Key Assumptions
Sensitivity Analysis
FY Dec
2012A
17,611
911,182
38.3
2014A
2015F
2016F
17,642
18,189
18,495
19,843
958,265 1,001,387 1,031,428 1,077,843
36.3
33.7
33.7
32.1
2012A
2013A
2014A
2015F
2016F
16,115
1,934
81
(839)
17,290
17,046
2,739
116
(1,209)
18,691
18,293
2,819
135
(1,251)
19,996
19,194
3,486
160
(1,501)
21,340
21,612
4,065
184
(1,727)
24,134
5,799
76
2
0
5,877
6,139
(86)
11
0
6,064
5,930
43
2
0
5,975
6,049
70
24
0
6,143
6,325
203
28
0
6,556
36.0
3.9
2.5
0.0
34.0
36.0
(3.1)
9.2
0.0
32.4
32.4
1.5
1.6
0.0
29.9
31.5
2.0
15.0
0.0
28.8
29.3
5.0
15.0
0.0
27.2
2012A
2013A
2014A
2015F
2016F
17,290
(9,020)
8,270
(2,425)
5,845
32
9
354
0
6,240
(1,476)
(3)
0
4,760
4,760
6,619
18,691
(10,037)
8,655
(2,680)
5,975
89
18
513
0
6,595
(1,583)
(2)
0
5,010
5,010
6,785
19,996
(10,910)
9,087
(3,233)
5,854
121
24
790
0
6,790
(1,516)
(3)
0
5,271
5,271
6,732
21,340
(11,700)
9,640
(3,497)
6,143
100
25
749
0
7,018
(1,684)
(3)
0
5,330
5,330
7,189
24,134
(13,488)
10,646
(4,089)
6,556
130
26
675
0
7,388
(1,773)
(4)
0
5,611
5,611
7,739
24.5
30.0
32.0
32.3
8.1
2.5
2.2
5.2
7.0
(0.8)
(2.0)
5.2
6.7
6.8
4.9
1.1
13.1
7.7
6.7
5.3
47.8
33.8
27.5
27.1
23.3
24.1
34.8
NM
46.3
32.0
26.8
23.7
20.3
20.5
66.1
NM
45.4
29.3
26.4
22.0
19.1
18.3
94.3
NM
45.2
28.8
25.0
21.2
18.6
17.9
70.0
NM
44.1
27.2
23.2
21.4
18.7
18.4
70.0
NM
Page 49
2013A
2015
Domestic sales
volume +/- 5%
EBITDA margin +/50bps
Margins Trend
36.0%
34.0%
32.0%
30.0%
28.0%
26.0%
24.0%
22.0%
2012A
2013A
Operating Margin %
2014A
2015F
2016F
Company Focus
Indocement Tunggal P.
Revenue Trend
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Margins (%)
Net Profit Margins (%)
5,829
(3,090)
2,739
(944)
1,795
45
7
177
0
2,025
(470)
0
1,555
1,555
2,026
4,328
(2,400)
1,928
(695)
1,233
43
8
183
0
1,466
(320)
0
1,146
1,146
1,465
(15.8)
(21.0)
(23.9)
(19.4)
11.1
16.1
17.9
22.2
(6.6)
(6.7)
(7.0)
(12.6)
24.9
29.0
32.2
28.9
(25.8)
(27.7)
(31.3)
(26.3)
43.8
27.5
25.1
44.7
29.2
27.6
45.9
29.1
25.8
47.0
30.8
26.7
44.5
28.5
26.5
10%
4,000
0%
3,000
-10%
2,000
1,000
-20%
-30%
Revenue
1Q is seasonally weakest
2012A
2013A
2014A
2015F
2016F
7,935
0
N/A
N/A
10,474
N/A
1,470,305
2,454,818
N/A
22,755
9,305
0
N/A
N/A
12,595
N/A
1,473,645
2,518,588
N/A
26,607
10,427
0
N/A
N/A
12,721
N/A
1,772,731
2,793,215
N/A
28,471
11,881
0
N/A
N/A
11,437
N/A
1,901,203
2,980,896
N/A
28,980
13,199
0
N/A
N/A
11,597
N/A
2,191,720
3,371,171
N/A
31,189
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholders Equity
Minority Interests
Total Cap. & Liab.
0
1,332
1,086
108
809
19,388
31
22,755
0
1,375
1,365
93
797
22,947
30
26,607
0
1,394
1,249
93
797
24,905
34
28,471
0
1,499
1,288
93
797
25,267
37
28,980
0
1,736
1,376
93
797
27,147
41
31,189
1,687
10,366
46.8
48.0
61.9
0.8
6.0
5.3
CASH
CASH
886.6
14.3
1,511
12,502
48.6
53.5
58.2
0.8
6.1
5.5
CASH
CASH
2,161.0
16.8
2,224
12,628
48.5
50.4
59.1
0.7
6.7
5.9
CASH
CASH
2,155.2
15.8
2,419
11,344
49.4
49.6
62.9
0.7
6.0
5.2
CASH
CASH
2,694.1
14.7
2,826
11,504
48.0
48.0
60.7
0.8
5.6
4.8
CASH
CASH
2,694.1
NA
Page 50
20%
5,000
1Q2015
4,668
(2,524)
2,144
(786)
1,358
9
7
180
0
1,554
(348)
0
1,206
1,206
1,571
4Q2014
4,999
(2,764)
2,235
(774)
1,461
91
6
215
0
1,773
(390)
(2)
1,380
1,380
1,684
30%
6,000
3Q2014
4,500
(2,531)
1,969
(729)
1,240
(24)
4
218
0
1,438
(307)
(1)
1,129
1,129
1,451
7,000
2Q2014
1Q2015
1Q2014
4Q2014
4Q2013
3Q2014
3Q2013
2Q2014
2Q2013
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
1Q2014
1Q2013
FY Dec
4Q2012
Debtors 10.1%
Net Fixed
Assets 37.6%
Assocs'/JVs 0.0%
Inventory 6.4%
Bank, Cash
and Liquid
Assets 45.9%
Company Focus
Indocement Tunggal P.
2013A
2014A
2015F
2016F
Capital Expenditure
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (Rp)
Free CFPS (Rp)
6,595
810
0
0
160
(563)
5,419
(2,005)
0
0
0
0
(2,005)
(1,658)
(49)
0
0
(1,707)
414
2,121
1,429
927
6,790
878
0
0
(714)
0
5,439
(2,000)
0
0
0
0
(2,000)
(3,313)
0
0
0
(3,313)
0
126
1,671
934
7,018
1,046
0
0
(195)
0
6,184
(2,500)
0
0
0
0
(2,500)
(4,968)
0
0
0
(4,968)
0
(1,284)
1,733
1,001
7,388
1,183
0
0
(407)
0
6,391
(2,500)
0
0
0
0
(2,500)
(3,731)
0
0
0
(3,731)
0
160
1,846
1,057
3000
6,240
773
0
0
280
(142)
5,675
(961)
0
0
0
2
(959)
(1,078)
(48)
0
0
(1,126)
20
3,610
1,466
1,281
2500
2000
1500
1000
500
0
2012A
2013A
2014A
Rp
26950
25950
24950
23950
22950
2
3
21950
20950
19950
May-14
Sep-14
Jan-15
Not e : Share price and Target price are adjusted for corporate actions.
Page 51
1:
2:
Cl o s i n g Ta rg e t
R a ti n g
Pri c e
Pri c e
18 Feb 15 23700 20200 Fully Valued
14 Apr 15 22650 20200 Fully Valued
3:
04 May 15
S.No .
2015F
Da te
22800
2016F
Industry Focus
Indonesia Infrastructure
AllianceDBS recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may beneficially own a total of 1% of any class of
common equity securities of the company mentioned as of 25 May 2015.
3.
Page 52
Industry Focus
Indonesia Infrastructure
months, and within the next 3 months may receive or intends to seek compensation for investment banking services from the
company mentioned.
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking
transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information,
including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document
should contact DBSVUSA exclusively.
RESTRICTIONS ON DISTRIBUTION
General
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation.
Australia
This report is being distributed in Australia by DBS Bank Ltd. (DBS) or DBS Vickers Securities (Singapore) Pte Ltd (DBSVS),
both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act
2001 (CA) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary
Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended
only for wholesale investors within the meaning of the CA.
Hong Kong
This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the
Hong Kong Securities and Futures Commission.
Indonesia
Malaysia
This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR") (formerly known as HwangDBS Vickers
Research Sdn Bhd). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in
respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found
at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company
Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers,
employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in
the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory
and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation
for broking, investment banking/corporate advisory and other services from the subject companies.
This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the
Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign
entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial
Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert
Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons
only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from,
or in connection with the report.
Thailand
This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only
intended for institutional clients only and no other person may act upon it.
United
Kingdom
This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of
the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is
intended only for institutional clients.
Dubai
This research report is being distributed in The Dubai International Financial Centre (DIFC) by DBS Bank Ltd., (DIFC Branch)
rd
having its office at PO Box 506538, 3 Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC),
Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This
research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon
it.
United States
Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in
compliance with any applicable U.S. laws and regulations. It is being distributed in the United States by DBSVUSA, which
accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any securities
referred to herein should contact DBSVUSA directly and not its affiliate.
Other
jurisdictions
In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
AllianceDBS Research Sdn Bhd (128540 U)
(formerly known as HwangDBS Vickers Research Sdn Bhd)
th
19 Floor, Menara Multi-Purpose, Capital Square,
8 Jalan Munshi Abdullah 50100
Kuala Lumpur, Malaysia.
Tel.: +603 2604 3333 Fax: +603 2604 3921 email : general@alliancedbs.com
Page 53