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Danareksa Equity Snapshot - WSKT 8 Juni 2018
June 08, 2018 09:44

Waskita Karya(WSKT IJ)

Trying to remain healthy


WSKT plans to issue IDR3.5tn of bonds in 2H18 for debt restructuring. This issuance will be the second stage of the shelf-registered bonds issuance, with the coupon rate in the range of 8%-9%. As of Mar 18, around 71% of WSKT’s debts were bank loans bearing an interest rate ranging from 7.9% to 10.0%. We believe that the company’s strategy to issue bonds is appropriate in view of the upward trend in domestic interest rates. BUY maintained on WSKT as we expect to see gains from the issuance of RDPT in Apr 18 to be booked in the 1H18 financial result.


Plans to undertake debt restructuring by replacing short-term debts (which carry high interest rates) with long-term debts (which carry lower interest rates). With this goal in mind, WSKT plans to issue IDR3.5tn of bonds in 2H18. This will be the second stage of the shelf-registered bonds issuance with targeted proceeds of IDR10.0tn, of which IDR3.0tn were issued in the first stage in 2017. The shelf-registered bonds to be issued in the second stage will have a coupon rate in the range of 8%-9%.


Debt profile. WSKT’s total interest bearing debts as of Mar 18 reached IDR49.4tn, resulting in a DER of 2.02x. The leverage is still below the level stipulated in its internal policy at a maximum level of 2.5x to 3.0x. Around 71% of the debts are bank loans (with 83.8% of them channelled by top-10 creditors). BNI is the largest creditor with loans extended to WSKT reaching IDR10.1tn (including loans channelled to subsidiaries). This amount is 29% of WSKT’s total bank loans (the details can be seen in exhibits 7 and 8).


WSKT currently owns 18 toll roads through its subsidiary, Waskita Toll Road (WTR). The total investment needed for these toll roads is IDR130tn (only 5 of them have started to be operated). As such, WSKT has no plans to acquire new toll road concessions this year and will instead focus on the development of its toll roads. This is reflected in the new contracts obtained in 4M18 of IDR4.2tn or only 6% of the full year target of IDR70.0tn.


More toll roads being operated. WSKT seeks to operate 437.5km of toll roads by end-2018 and then 889km by 2020. At the same time, WSKT is also trying to reduce its ownership in several toll roads so it becomes a minority shareholder. The capex needed this year is approximately IDR28.0tn funded by: 1) ~IDR10.5tn from the repayment of turnkey projects, 2) ~IDR6.7tn from the receipt of land acquisition bailout funds, 3) payment for the Palembang LRT project amounting to IDR9.0tn, and 4) the remaining IDR1.8tn from debt raising.


Key Financials
Year to 31 Dec	2016A	2017A	2018F	2019F	2020F
Revenue (IDRbn)	23,788	45,213	51,046	58,471	64,309
EBITDA (IDRbn)	2,974	7,034	8,324	9,541	10,431
EBITDA Growth (%)	133.8	136.5	18.3	14.6	9.3
Net profit (IDRbn)	1,713	3,882	4,369	5,038	5,934
EPS (IDR)	147.5	334.1	321.9	371.1	437.2
EPS growth (%)	63.5	126.5	(3.7)	15.3	17.8
BVPS (IDR)	952.9	1,205.6	1,298.4	1,607.1	1,972.1
DPS (IDR)	15.4	37.9	57.2	64.4	74.2
PER (x)	16.3	7.2	7.5	6.5	5.5
PBV (x)	2.5	2.0	1.9	1.5	1.2
Dividend yield (%)	0.6	1.6	2.4	2.7	3.1
EV/EBITDA (x)	15.9	10.0	9.3	8.1	7.3
Source : WSKT, Danareksa Estimates

Maintain BUY. We maintain our forecast and BUY call on WSKT. In Apr 18, WSKT launched a financial instrument called RDPT which generated proceeds of IDR5.0tn through the sale of 70% ownership in three toll roads. We expect WSKT to book gains from the transaction of around IDR1.7tn (based on our calculations) in the 1H18 unaudited financial result.


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