NISP Sekuritas Daily 10 Jan 2011 (KLBF, MPPA, ELTY, RALS, WIKA, NIKL)

Matahari prefers to retain Hypermart (MPPA, Rp1,670)

·          Matahari Putra Prima said it will retain and further intensify its Hypermart Food Retail business as wholly owned business division of the company. The company’s advisor recommends Matahari to bring a strategic partner to expand Hypermart and divest of non-core, non-food retailing assets. This means that the plan is different with Matahari’s action on MDS.

·          The company has not shared any further details on this news despite underlining the scheme is conducted by selling MPP’s share to strategic partner.

·          Currently, MPPA is trading at 2011F consensus PER of 16.5x.

Bakrieland aims 50% YoY growth in sales (ELTY, Rp156)

·          Bakrieland sets 50% YoY growth in property sales value this year which translates into Rp1.95tn compared to Rp1.3tn last year. The company sees large potential in residential sales given strong government support and availability for mortgage financing.

·          To support such target, the company will spend Rp2.5tn of capex, or 100% higher than 2010 but did not share the financing source.

·          ELTY is trading at 2011F consensus PER of 29.2x and EV/EBITDA of 15.0x.

Ramayana Lestari to open 8 new outlets in 2011 (RALS, Rp860)

·          Ramayana Lestari will open 8 new outlets this year.  Each outlet costs around Rp20-25bn depending on its land area, making with total investment cost to reach Rp160-200bn.

·          The company has a slightly negative outlook for this year, citing that inflationary pressures will carry an impact to sales. In addition, overhead cost is expected to increase from increasing minimum wage in several regions.

·          Therefore this year, revenue is only expected to increase to 5% YoY to Rp6.7tn  from 2010E figure of Rp6.4tn. 

·          RALS is trading at 2011F consensus PER of 13.2x and EV/EBITDA of 7.0x.

Wika targets Rp25.68tn in order book (WIKA, Rp650)

·          Wika is targeting to record Rp25.68tn in its order book this year or up by 23.34% from 2010 achievement of Rp20.82tn. AS much as Rp13.38tn is carried over from last year making Rp12.30tn new contracts targeted to be won this year, up from Rp10.09tn won in 2010. 

·          The new contracts are expected to be mostly sourced from construction sector, including public construction, building construction, power plant construction, and energy construction. New contracts from this sector are expected to reach Rp8.11tn. While Rp4.19tn will be from non-construction sectors including, ready-mix concrete, property, and industry and trading.

·          With the performance target, gross profit is targeted to reach Rp924.13bn this year, up from 17.4% YoY from 2010E. While operating profit will increase 27.5% YoY to Rp546.6bn and net income to increase 38.4% YoY to Rp350.9bn. The company’s 2011F projection for operating income and net income deviates by 10%-20% from market expectations.

·          WIKA is trading at 2011F consensus PER of 11.8x and EV/EBITDA of 5.1x.

Latinusa prepares Rp100bn for capex this year (NIKL, Rp435)

·          Latinusa is budgeting US$11mn or around Rp100bn for capex this year. Most of the funds will be used for revamping its machines. The company will use its IPO proceeds from 2009 for this purpose.

·          The revamping projects are expected to absorb as much as US$16mn, where in 2009 US$3mn has already been spent by the company. It expects to complete the project and its financing next year.

·          The project is targeted to be completed next year so annual production can be increased from 130 th tons per year to 160 th tons per year. Total domestic demand actually reaches Rp200 th ton per year.

·          NIKL is trading at 2011F consensus PER of 11.6x and EV/EBITDA of 6.8x.