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Danareksa Equity Snapshot - WIKA 20 September 2017
September 20, 2017 11:06 WIB

Wijaya Karya: 1H17 earnings up 70%yoy

(WIKA IJ. IDR1,910. BUY. TP IDR2,800)

  • WIKA’s 1H17 net earnings soared 69.9%yoy to IDR436bn from IDR257bn in 1H16. The 1H17 result is 35.6% of our full year target and 35.8% of the consensus – yet above the average historical rate of 28.7%.
  • The solid 1H17 earnings were supported by strong growth in revenues and interest income.
  • Revenues in 1H17 jumped by 57.2%yoy to IDR9.5tn from IDR6.0tn in 1H16. This was underpinned by a solid order book. As of June 17, WIKA’s order book stood at IDR83.5tn (+105.8%yoy, 1H16: IDR40.6tn) including IDR20.9tn of new contracts.
  • Interest income rose more than fivefold to IDR129bn from IDR23.5bn in the previous year due to proceeds from rights issue conducted in 4Q16.
  • Interest expenses jumped 68.9%yoy to IDR289.8bn from IDR171.5bn in the previous year. Total debt as of Jun 17 reached IDR8.8tn, higher than IDR6.7tn in Dec 16. Meanwhile, cash as of June stood at IDR7.8tn, lower than IDR9.3tn in Dec 16. Hence, the DER in 6M17 reached 0.68x compared to 0.59x in Dec 16, while the net debt to equity ratio in Jun 17 reached 0.07x compared to a net cash position in Dec 16.
  • We maintain our forecast on WIKA

… read more 20170920 WIKA

Danareksa Equity Snapshot - 20 September 2017
September 20, 2017 10:58 WIB



  • Wijaya Karya: 1H17 earnings up 70%yoy (WIKA IJ. IDR1,910. BUY. TP IDR2,800)

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Market Maker

  • JCI Index. 5,872. POSITIVE. Target 5,885

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Danareksa Equity Snapshot - WSKT 19 September 2017
September 19, 2017 10:56 WIB

Waskita Karya: Further options for toll roads divestment

(WSKT IJ. Rp1,905. BUY. TP Rp2,800)

WSKT conducted an analyst meeting yesterday, with the highlights as follows:

  • According to the management, the company’s difficulties in divesting 10 toll roads was mainly due to disagreement on the pricing.  WSKT had tendered the 10 toll roads in three packages:

a) a bundle of toll roads in which 100% stakes are owned by WSKT, namely: Kanci – Pejagan, Pejagan – Pemalang, and Pasuruan – Probolinggo,

b) a bundle of toll roads in which WSKT had formed partnerships with JSMR, namely: Batang – Semarang, Solo – Ngawi, and Ngawi – Kertosono, and

c) stand-alone toll roads offered to investors, namely: Pemalag – Batang, Kayuangung – Palembang – Betung, Becakayu, and Medan – Kualanamu – Tebing tinggi.

  • As a result, the company has changed its divestment scheme to “one-on-one” for the assets and investors. However, if this scheme fails to meet its target the company is also looking at other ways to raise funds. In its backup plan, WSKT plans to bundle 7 toll roads which are part of the Trans Java toll road under a new subsidiary, Waskita Trans Java Toll Road (WTJTR), and conduct an IPO of the new company. WSKT would expect the IPO to take place by the end of 1H18.
  • The management claims that the company still has sufficient funds to continue the development of 18 toll roads which are still in the pipeline. WSKT has an IDR8.0tn bank loans facility - excluding another IDR5.0tn bank loans facility from Sumitomo Mitsui for which the agreement was signed recently. Furthermore, WSKT is in the process of issuing IDR3.0tn of bonds.
  • Total equity as of Aug 17 stood at IDR21.8tn, or higher than IDR20.8tn in Jun 17. Meanwhile, total debt as of Aug reached IDR34.0tn (Jun17: IDR30.8tn). Hence, the debt-to-equity ratio as of 8M reached 1.56x (Jun17: 1.48x). However, including the IDR3.0tn of additional debts from the bonds issuance, the ratio would rise to 1.70x, yet still below the management’s internal covenant policy of 2.0x.
  • WSKT expects to receive around IDR30.0tn of receivables payments in 2018 for several turnkey projects carried out by the company. This amount includes around IDR10.0tn of payments for the Palembang LRT project, around IDR6.0tn from PLN for transmission development, and around IDR14.0tn from JSMR.
  • WSKT booked new contracts in 8M17 of IDR43.0tn or 71.7% of the target of IDR60.0tn. WSKT admits that it has delayed the acquisition of new contracts, especially under the turnkey scheme, due to the delays in its toll roads divestment. 2017 carry over contracts stand at IDR86.7tn.
  • The management indicates that the 2017 net income will reach IDR3.6tn, or higher than the management’s initial target of IDR2.8tn. The new target is double the FY16 net income of IDR1.7tn, and 51.1% higher than our 2017 target of IDR2.4tn.  
  • We have a BUY recommendation on WSKT with a TP of IDR2,800.

… read more 2170919 WSKT