Good Performance on May 2008
On May 2008, WIKA had reached income successfully in amount IDR 2, 13 trillion (90, 4 %), compared on May 2007 in amount IDR 1, 12 trillion.
The operating profits also increased significantly in amount 92, 5% become IDR 77 billion. Even though, gross profit had little reduction, but company operating profit is still stable in amount 3, 6%, until at the end of 2008, we estimate, WIKA will reach the revenue IDR 5, 72 trillion and operating profit IDR 336 billion. WIKA’s performance until May 2008 is suitable with our estimation.
In Our estimation, revenue improvement comes from construction service in amount 73 % of revenue total. WIKA is integrated construction company whose business is supported by its subsidiaries, such as WIKA Beton is being market leaded in concrete industry in Indonesia.
We estimate the contribution of WIKA Beton’s revenue in 2008 will reach 19 % of revenue total. The other subsidiaries-WIKA In trade is also giving contribution by producing gas tube 3 kg in order to support government conversion program from kerosene to gas. We target WIKA’s stock price for the next 12 months will be decrease a little become IDR 765 from IDR 820 because BI rate improvement (8,50 %). The estimated stock price uses DCF Method, WACC in amount 14,16 %,
Recommendation: BUY
Analyst: Maxi Liesyaputra (maxi@bnisecurities.co.id).