Acset Indonusa ACST IJ / ACST.JK

Transcription

1 Vol (mn) Equity Research Acset Indonusa ACST IJ / ACST.JK NOT RATED Company Update BCAS NR Construction Sector Small but mighty Highest exposure to infra among private contractors Acset Indonusa, 50.1% owned by United Tractors through PT Karya Supra Perkasa, is currently one of the largest private contractors, and one with the highest exposure to infrastructure projects. A strong breakthrough into infrastructure was enabled when ACST won a IDR6.6tn project to build the JakartaCikampek elevated toll road from Jasa Marga. ACSET subsequently managed to secure several more infrastructure projects, such as toll roads (KunciranSerpong, BakeheuniSidomulyo), soil improvement at Batang power generation facility, and subcon on Greater Jakarta LRT. Higher exposure to infrastructure projects brought ACST 2017 new contracts to a record high of IDR8.4tn (+123% YoY), with 2018 new order flow target of IDR10tn (+19%). Sufficient capital, while capital strengthening is plausible Given a substantial backlog of projects in the pipeline, ACST has been fully supported by both shareholders and Japanese banks, particularly for working capital requirements on JakartaCikampek toll road turnkey project. Capability to secure funding has been mostly backed by strong shareholder profile of United Tractors and Astra International. Most bank loans are shortterm to support working capital requirement for the project. That said, current net gearing (9M17) of above 3x should not raise a concern. But over the longer term, if ACST were to strengthen its muscles, we do not rule out the possibility of its raising equity capital. Undaunted by soft highrise property market Apart from its infrastructure projects, ACST also has a strong foothold in the highrise building and foundation segment. Foundation projects are customarily small in value, but carry a much higher gross margin of 2530%. In the highrise segment, ACST is currently the general contractor for Indonesia 1 tower, Thamrin 9 and SCBD Lot 28. Contribution from buildings has however declined, in line with sluggish growth in the property market. Unlike other private contractors, soft highrise market has been compensated for by ACST s rising exposure to infrastructure projects. Promising longterm proposition While ACST s order book is much smaller compared to SOE companies, it is still the highest among private contractors. Valuation is the most undemanding in the sector, trading at 2018F PER of 8.4x vs. 11.9x average SOEs. Longterm positive spillover may stem from potential relocation of ASII s 40ha manufacturing facility in Sunter, North Jakarta, which could potentially be transformed into a highrise property development. Exhibit 1. Financial summary YE to Dec 31 IDRbn F* 2018F* Revenue 1,351 1,357 1,794 2,686 4,304 EBITDA EV/EBITDA (x) Net profit EPS (IDR) EPS growth (%) 5.4 (60.0) DPS (IDR) PE (x) Dividend yield (%) BVPS (IDR) 1,284 1,330 2,002 1,761 1,929 P/B (x) ROE (%) Net Gearing (%) n.a Source: Company, BCA Sekuritas *Bloomberg consesus 2 February 2018 Pandu Anugrah pandu.anugrah@bcasekuritas.co.id ext 168 Michael Ramba michael.ramba@bcasekuritas.co.id ext 184 Current Price: IDR2,800 12M PRICE PERFORMANCE (IDR) (%) 3, ,000 (15.0) 2,500 (30.0) 2,000 (45.0) ACST IJ (LHS) Rel. to JCI performance (RHS) 6 3 Feb17 May17 Aug17 Nov17 Feb18 STOCK PERFORMANCE YTD 1M 3M 12M Absolute 13.8% 13.8% 4.8% 4.1% JCI Return 3.8% 3.8% 9.3% 23.9% Relative 10.0% 10.0% 14.0% 19.8% MARKET DATA 12M price range (IDR) : 2,450 3,300 12M PE range (x) : Outstanding shares (mn) : 700 Market cap (IDRbn)/(USDmn) : 1,960 / 146 Avg daily turn. (IDRbn/USDmn) : 31.0 / 2.3 SHAREHOLDERS Karya Supra Perkasa : 50.1% Cross Plus Indonesia : 12.3% Loka Cipta Kreasi : 5.8% Others (less than 5%) : 31.8%

2 Exhibit 2. ACST s financial summary Income Statement Year end 31 Dec (IDRbn) M16 9M17 Revenue 1,351 1,357 1,794 1,290 1,945 Cost of revenue 1,102 1,132 1,514 1,088 1,626 EBITDA Opex EBIT Interest income Interest expense (32) (52) (68) (50) (55) FX gain (losses) Other income (expense) (2) 3 (4) 3 6 Pretax profit Taxes (41) (42) (58) (42) (60) Minority interests 1 (0) Net income EPS (IDR) Balance sheet Year end 31 Dec (IDRbn) M16 9M17 Cash and equivalents Account receivables ,198 1,016 2,334 Other receivables LT Invest & receivables Fixed assets Other assets ,281 Total assets 1,474 1,929 2,503 2,799 4,740 ST liabilities Other ST liabilities 594 1, ,229 2,656 LT liabilities 44 Other LT liabilities Total liabilities 832 1,265 1,202 1,522 3,342 Minority interest Equity ,301 1,277 1,398 Total liabilities & equity 1,474 1,929 2,503 2,799 4,740 Cash Flows Statement Year end 31 Dec (IDRbn) M16 9M17 Net Income Depreciation Change in working capital (217) (107) (380) (210) (1,023) Operating cash flow (55) (20) (254) (126) (850) Capital expenditure (78) (114) (118) (87) (99) Others (0) (4) (31) (1) (23) Investing cash flow (79) (118) (149) (87) (122) Dividend paid (25) (18) (28) (17) (20) Net change in debt (58) 96 1,233 Others (55) Financing cash flow ,158 Change in cash Beginning cash flow Ending cash flow Key Ratios M16 9M17 Gross margin (%) EBITDA margin (%) EBIT margin (%) Pretax margin (%) Net margin (%) ROAE (%) ROAA (%) Current ratio (x) Acid ratio (x) Gearing (%) Net gearing (%) AR turnover (days) AP turnover (days) Strong revenue growth of 50% YoY on delivery of Japek toll road project Temporary increase in receivables due to role as turnkey contractor Strong support from shareholder to bridge funding shortage for working capital Gross margin will likely fall in line with higher exposure to infrastructure projects Key Assumptions M New contract growth (%) (53.8) n.a. 127 Order book growth (%) (63) n.a. 100 Source: Company, BCA Sekuritas 2

3 Exhibit 3: Shareholder structure strong support from the shareholders Exhibit 4: New order book & growth YoY capability to secure infrastructure projects paved the way for record high in order book Exhibit 5: Order book multiples more than enough to cover multiyear revenues IDRb % 12, ,000 8, , , ,000 (66) (63) F2018F x F New order book New order book growth Order book to revenue Carry over to revenue Exhibit 6: Growth accelerated in 3Q17 on the execution of IDR6.6tn Japek elevated project. Japek accounted for 52% of total revenue Exhibit 7: Lower margin profile came as a consequence of higher exposure to infra, but should not raise a concern given lukewarm property market % (50.0) Revenue growth YoY (LHS) (200.0) (400.0) Operating profit growth YoY (RHS) % (5.0) Net profit growth YoY (RHS) Gross margin Operating margin Net margin 3

4 Exhibit 8: Gross margin comparison higher margin compared to other private contractors Exhibit 9: Net margin comparison may not be the highest net margin, but partly due to higher exposure in turnkey proejct Exhibit 10: New order book comparison far from SOEs capability, but the highest among the private contractors Exhibit 11: 2018F PE comparison valuation is undemanding, the cheapest in the sector Sources: Companies, BCA Sekuritas Exhibit 12: Total order book and growth YoY another record high, but sustainability needs to be guarded Exhibit 13: Revenue contribution infrastructure has taken a more significant role for ACST Sources: Companies, BCA Sekuritas 4

5 Exhibit 14: Peers comparison Ticker Rating CP TP NP (IDR bn) EPSG (%) PE (x) PBV (x) ROE (%) Div Yield (%) (IDR) (IDR) 2017F 2018F 2017F 2018F 2017F 2018F 2017F 2018F 2017F 2018F 2017F 2018F SOE ADHI BUY 2,230 2, PTPP BUY 3,130 4,400 1,699 2, WIKA BUY 2,080 2,800 1,279 1, WSKT BUY 2,830 2,600 3,018 2, (2.3) WTON BUY Private TOTL NR 740 NR NRCA NR 420 NR n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a ACST NR 2,760 NR TOPS NR 4,060 NR n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a Exhibit 15: Ongoing projects Sources: Companies, BCA Sekuritas 5

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