Maybank (ZP) 12 January 2016
Wijaya Karya (WIKA, HOLD, PT Rp2,800): 2016 Capex and Target Contracts
WIKA is seeking Rp6.0 tn external funding for 2016 capex of Rp10 tn. In 2016, WIKA is targeting ~Rp86 tn of contracts, which consist of: 1) Rp52 tn (+107% YoY) new contracts; and 2) Rp34 tn carry over from 2015. Meanwhile, WIKA is targeting the ground breaking for the High Speed Railway project, with Rp17 tn contract value, on 21st January.
Sales commentary: We remain cautious on WIKA due to the uncertainties surrounding its right issue proposal, which will be decided by the government and the parliament in February 2016. Our top picks in the Indonesian contruction sector are: Waskita Karya (WKST, BUY, PT Rp2,200) and Pembangunan Perumahan (PTPP, BUY, PT Rp4,300).
CLSA (KZ) Upgrade Target Price for Construction Sector
CONSTRUCTION: analyst taking a positive spin on accelerated Govt project dis-bursements and has slightly tweaked target prices upward:
WSKT: now BUY 2150 (from 2000)
PTPP: now OUTPERFORM 4600 (4550)
WIKA: now OUTPERFORM 3350 (3225)