Wijaya Karya Beton(WTON IJ)

Transcription

1 Equity Research Results Note Wednesday,02 May 2018 BUY Maintain Last price (IDR) 476 Target Price (IDR) 730 Upside/Downside +53.4% Previous Target Price (IDR) 730 Stock Statistics Sector Bloomberg Ticker Construction WTON IJ No of Shrs (mn) 8,338 Mkt. Cap (IDRbn/USDmn) 3,969/285 Avg. daily T/O (IDRbn/USDmn) 11.9/0.9 Major shareholders (%) Wijaya Karya 78.4 Public 21.6 Estimated free float 40.0 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (13.2) WTON relative to JCI Index Source : Bloomberg x Maria Renata (62-21) ext.3513 maria.renata@danareksa.com Wijaya Karya Beton(WTON IJ) Margins compression dragged down the earnings WTON booked 1Q18 earnings of IDR58bn, up 13%yoy despite margins compression. The earnings are 13.6% of our full year forecast and consensus estimates, slightly lower than the past two-year s rate of 16.8%. The 1Q18 performance was dragged down by margins compression since revenues soared 63.6%yoy. The strong revenues growth was supported by a solid order book. In 1Q18 new contracts booked reached IDR1.5tn or 19.8% of the management s full year target. Maintain BUY. Net income in 1Q18 grew by 13%yoy to IDR58bn (1Q17: IDR51bn). The result accounted for 13.6% of our targets and consensus. Compared to the historical realization rate of 16.8%, the 1Q18 earnings is slightly lower. The moderate growth caused by contraction in GPM. Revenues in 1Q18 soared 63.6%yoy. to IDR1.2bn (1Q17: IDR729bn). The result is in-line with ours and consensus target. It accounted for 18.5% and 20.1% of our and consensus target while in the past-two yeas the 1Q revenues representing 17.3% of the full year figure. WIKA group contributed around 33% of the revenues, followed by PLN of 11.4%. The strong revenues growth supported by solid order book. Solid carry over contracts to support order book. Order book in 1Q18 reached IDR6.9tn, including IDR5.4tn of carry over contracts. In 3M18 new contracts booked reached IDR1.5tn, similar with new contracts booked in same period the previous year. The new contracts accounted for 19.8% of managements full year target. The 2018 new contract target is set at IDR7.6tn (+4.6%yoy: FY17: IDR7.2tn). Margins, debt, and cash flow. GPM contracted to 11.5% in 1Q18 vs. 13.9% in 1Q17. Consequently, NPM in 1Q18 stood at 4.8% compared to 7.0% in previous year. Balance sheet remains healthy even though WTON s booked higher debts. Total interest bearings debts reached IDR1.6tn, slightly higher than IDR1.4tn as of Dec17. Hence, DER stood at 0.58x as of Mar18 (Dec17: 0.53x). Meanwhile, operating cash flow (OCF) was booked negative IDR367bn in 1Q18 (1Q17: negative IDR185bn). Historically, OCF in 1Q always booked negatively due to the business cycle. Maintain BUY. We maintain our forecast and recommendation on WTON since we expect better financial performance in the Q2 forwards. WTON is traded at 2018 PE of 9.4x, lower than its historical -1SD of 13.6x. Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 3,482 5,362 6,466 7,545 8,732 EBITDA (IDRbn) EBITDA Growth (%) Net profit (IDRbn) EPS (IDR) EPS growth (%) BVPS (IDR) DPS (IDR) PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) Source : WTON, Danareksa Estimates See important disclosure at the back of this report 1

2 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-18 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-18 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level Exhibit 5. PE Band Chart Exhibit 6. Share Price Chart 70 2, SD: 56.5x +1SD: 42.2x Avg.: 27.9x -1SD: 13.6x -2SD: -0.7x 2,000 1,500 1, x 32.0x 24.0x 16.0x 8.0x Source: Bloomberg, Danareksa Sekuritas estimates Source: Bloomberg, Danareksa Sekuritas estimates See important disclosure at the back of this report 2

3 Dec-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Exhibit 7. 1Q18 Result Summary QoQ YoY Cons. 1Q18/ IDR Bn 1Q17 4Q17 Chg 1Q18 Chg FY18F A/F (%) FY18F Cons. % % Revenue 729 1,937 (38.4) 1, , , Gross profit (41.3) Op. profit (41.3) Net profit (50.6) GPM (%) (0.6) 11.5 (2.4) OPM (%) (0.4) 9.0 (2.2) NPM (%) (1.2) 4.8 (2.2) Source: Company, Bloomberg, Danareksa Sekuritas estimates Exhibit 8. Operating Cash Flow (IDR Tn) (0.2) (0.4) (0.2) (0.3) (0.3) (0.1) (0.2) (0.2) (0.4) (0.6) Source: Company See important disclosure at the back of this report 3

4 Exhibit 9. Income Statement Revenue 3,482 5,362 6,466 7,545 8,732 COGS (2,977) (4,696) (5,657) (6,602) (7,641) Gross profit ,092 EBITDA Oper. profit Interest income Interest expense (57) (89) (125) (147) (171) Forex Gain/(Loss) 0 (1) Income From Assoc. Co s Other Income (Expenses) (16) (10) Pre-tax profit Income tax (71) (95) (106) (123) (143) Minority interest (9) (3) Net profit Core Net Profit Exhibit 10. Balance Sheet Cash & cash equivalent Receivables 663 1,228 1,143 1,332 1,540 Inventory 694 1,034 1,131 1,320 1,528 Other Curr. Asset 740 1,451 1,185 1,327 1,487 Fixed assets - Net 2,219 2,679 3,173 3,631 4,150 Other non-curr.asset Total asset 4,662 7,068 7,446 8,513 9,677 ST Debt 470 1,445 1,293 1,768 1,790 Payables 674 1,298 1,237 1,431 1,644 Other Curr. Liabilities 720 1,473 1,483 1,731 1,975 Long Term Debt Other LT. Liabilities Total Liabilities 2,172 4,320 4,376 5,077 5,819 Shareholder'sFunds 2,422 2,676 2,998 3,364 3,786 Minority interests Total Equity & Liabilities 4,662 7,068 7,446 8,513 9,677 See important disclosure at the back of this report 4

5 Exhibit 11. Cash Flow Net income Depreciation and Amort Change in Working Capital (653) (239) 204 (78) (119) OtherOper. Cash Flow Operating Cash Flow (165) Capex (359) (639) (700) (700) (800) Others Inv. Cash Flow Investing Cash Flow (342) (636) (687) (685) (783) Net change in debt New Capital Dividend payment (52) (82) (101) (127) (148) Other Fin. Cash Flow (68) (94) (125) (147) (171) Financing Cash Flow (120) (15) (34) Net Change in Cash (491) Cash - begin of the year Cash - end of the year Exhibit 12. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales EBITDA Operating profit Net profit Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) Interest Coverage (x) Source : WTON, Danareksa Estimates See important disclosure at the back of this report 5