ADHI
Contact our analyst Revita
67% upside, Buy
21st July 2022
Current price Rp 735
Target price Rp1230
21st July 2022
Current price Rp 735
Target price Rp1230
1H22 new contract jumped 82% YoY
As of 1H22, ADHI has new contracts of IDR 12.2 trillion, up significantly compared to 1H21’s IDR 6.7 trillion, and 67% of our 2022F forecast IDR 18.2 trillion. ADHI's new contracts come from construction & energy (85%), property (6%), and other businesses (9%). The project owners are, Government 15%, SOE 5%, and private, including investment, 80%. We maintain our estimation that this year will see moderate growth just like 2021. Some of the new contracts acquired in June 2022 include Tangerang-Merak Toll Road, Jenelata Dam in Gowa, The Precision Building (Technology, Information, and Communications Division –Polri) in Jakarta, and Piping Works and Steel Structure of the Manyar Smelter Project (MSP) in Gresik. We estimate the total order book for 2022 will reach IDR 52.3 trillion or up 8% yoy.
As of 1H22, ADHI has new contracts of IDR 12.2 trillion, up significantly compared to 1H21’s IDR 6.7 trillion, and 67% of our 2022F forecast IDR 18.2 trillion. ADHI's new contracts come from construction & energy (85%), property (6%), and other businesses (9%). The project owners are, Government 15%, SOE 5%, and private, including investment, 80%. We maintain our estimation that this year will see moderate growth just like 2021. Some of the new contracts acquired in June 2022 include Tangerang-Merak Toll Road, Jenelata Dam in Gowa, The Precision Building (Technology, Information, and Communications Division –Polri) in Jakarta, and Piping Works and Steel Structure of the Manyar Smelter Project (MSP) in Gresik. We estimate the total order book for 2022 will reach IDR 52.3 trillion or up 8% yoy.
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Maturing bonds repaid
PT Adhi Karya (Persero) Tbk has repaid the bonds maturing in June 2022. ADHI made repayments of two bond issues raised in 2017 and 2019. The 2017 issue has a principal value of IDR 2.997 trillion and 2019 has a principal value of IDR 556 billion. The repayment sources are partly from the bond issuance carried out in April 2022, while the rest comes from the company's internal cash. The new bond issuance in April 2022 was IDR 3.75 trillion with IDR 2.8 trillion used to repay the maturing bonds. The remaining amount of this bond will be used for working capital. We believe despite this addional debt, ADHI will be able to maintain a debt to equity ratio below 3.5x. We maintain our calculation that the debt to equity ratio during 2022-2023F will average 1.92X
Valuation: 67%upside
We maintain our target price of IDR 1,230/share which is equal to a PER of 29x. With 67% upside potential, our recommendation is maintained as BUY.
PT Adhi Karya (Persero) Tbk has repaid the bonds maturing in June 2022. ADHI made repayments of two bond issues raised in 2017 and 2019. The 2017 issue has a principal value of IDR 2.997 trillion and 2019 has a principal value of IDR 556 billion. The repayment sources are partly from the bond issuance carried out in April 2022, while the rest comes from the company's internal cash. The new bond issuance in April 2022 was IDR 3.75 trillion with IDR 2.8 trillion used to repay the maturing bonds. The remaining amount of this bond will be used for working capital. We believe despite this addional debt, ADHI will be able to maintain a debt to equity ratio below 3.5x. We maintain our calculation that the debt to equity ratio during 2022-2023F will average 1.92X
Valuation: 67%upside
We maintain our target price of IDR 1,230/share which is equal to a PER of 29x. With 67% upside potential, our recommendation is maintained as BUY.
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