JAKARTA, [IFN] - In the index of the property there are two sub-sectors, namely developers (ASRI, BSDE, SMRA, etc.) and builders (PTPP, WIKA, WSKT, etc.).
Among them, Daewoo Securities saw the value in the constructor versus the developer is clear earnings visibility of infrastructure development, led by the government.
According to the latest revised budget, infrastructure spending increased to Rp290,3 trillion or 63% higher than last year.
Then, the rise in property prices that exceed GDP growth would cause the level of demand and property sales were disappointing.
"Collectively, we believe the property has entered a cycle of the sunset while we expect to see the persistence of the values that can be found in the construction sector," said the research team.
Adhi Karya (ADHI), one of the service providers civil and building construction. Revenue mainly from construction (89.4%) and mechanical and electrical services (10.6%). The market capitalization at Rp5.4 trillion (0.1% of JCI).
In 2014, all contractors SOEs have reported strong earnings growth except ADHI. Revenues slowed 11.7% with net profit fell 20.2% as well as a new contract (Rp9.2 trillion versus FY13 FY14 Rp10.8 trillion), which is largely due to the uncertainty related to the election.
In 2015, ADHI is targeting a new contract Rp15,2triliun (construction services 82%, 11% and 7% property EPC / Precast) after the government's approval of a capital injection of Rp 1.4 trillion to the company.
Additionally, ADHI will make the issuance of new shares and raise funds Rp1.3 trillion (30% of outstanding). This will provide additional ADHI power to absorb more contracts despite the risk of dilution of earnings in the near future.
"However, investors should note that there is no further clarity from the government about the plan will be executed when the projected infrastructure, there is a possibility in the process this year will not be as expected," he said.
KDB recommends ADHI to 'hold' and 12-month price target Rp2.935 (target P / E 13,9x).
"Although our preference towards builders, we prefer pure builder vs. diverse. Our price target containing 3.5% decrease for ADHI," he said.
Among them, Daewoo Securities saw the value in the constructor versus the developer is clear earnings visibility of infrastructure development, led by the government.
According to the latest revised budget, infrastructure spending increased to Rp290,3 trillion or 63% higher than last year.
Then, the rise in property prices that exceed GDP growth would cause the level of demand and property sales were disappointing.
"Collectively, we believe the property has entered a cycle of the sunset while we expect to see the persistence of the values that can be found in the construction sector," said the research team.
Adhi Karya (ADHI), one of the service providers civil and building construction. Revenue mainly from construction (89.4%) and mechanical and electrical services (10.6%). The market capitalization at Rp5.4 trillion (0.1% of JCI).
In 2014, all contractors SOEs have reported strong earnings growth except ADHI. Revenues slowed 11.7% with net profit fell 20.2% as well as a new contract (Rp9.2 trillion versus FY13 FY14 Rp10.8 trillion), which is largely due to the uncertainty related to the election.
In 2015, ADHI is targeting a new contract Rp15,2triliun (construction services 82%, 11% and 7% property EPC / Precast) after the government's approval of a capital injection of Rp 1.4 trillion to the company.
Additionally, ADHI will make the issuance of new shares and raise funds Rp1.3 trillion (30% of outstanding). This will provide additional ADHI power to absorb more contracts despite the risk of dilution of earnings in the near future.
"However, investors should note that there is no further clarity from the government about the plan will be executed when the projected infrastructure, there is a possibility in the process this year will not be as expected," he said.
KDB recommends ADHI to 'hold' and 12-month price target Rp2.935 (target P / E 13,9x).
"Although our preference towards builders, we prefer pure builder vs. diverse. Our price target containing 3.5% decrease for ADHI," he said.
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