WIKA
Contact our analyst Revita
Sell
23rd August 2023
Current price Rp380
Target price Rp366
23rd August 2023
Current price Rp380
Target price Rp366
1H23 results disappointing
WIKA continued to report disappointing results in 1H23, with a total net loss of IDR -1.88 trillion. The record loss in 2Q23, of IDR -1.36 trillion follows a loss of IDR -521 billion in 1Q23. This significant loss was attributed to a 17% QoQ increase in funding expenses in 2Q23. Despite this, WIKA's top-line performance showed promise, with revenue increasing by 29% YoY or 13% QoQ. This growth was fuelled by a total order book of IDR 57.29 trillion in 1H23, consisting of carry-over contracts worth IDR 45.82 trillion and new contracts of only IDR 11.47 trillion, marking a 17% YoY decrease (compared to IDR 13.8 trillion in 1H22). With lower expenses from bonds maturing this year and with anticipated reductions in other income expenses in 2H23, we target a lower net loss of IDR -796 billion by the end of 2023.
WIKA’s Debt Standstill usbmission Progress
As of 1H23, approximately 75% of the total loans submitted by the Company for standstill have gained approval. It's worth noting that the standstill submission process applies exclusively to WIKA, as its subscribers operate independently in this regard. This submission is for loans categorized as long-term investments. Concerning bonds, WIKA intends to either pay them off or extend their maturity. Up to May 2023, WIKA has made timely payments of its bonds and Sukuk Mudharabah I Phase 2 from 2021, totaling IDR 69.60 billion. WIKA is confident that this process will enhance the company's financial stability. Notably, IDR 331 billion of WIKA’s bond from the 2020 Series A Phase I, is maturing on December 18th.
Valuation: 4% downside, Recommendation: SELL
Based on the 1H23 results, we have set a new target price of IDR 367 within one year, corresponding to a 26.57x PER and reflecting a 4% downside potential. As a result, we are revising our recommendation to "Sell."
WIKA continued to report disappointing results in 1H23, with a total net loss of IDR -1.88 trillion. The record loss in 2Q23, of IDR -1.36 trillion follows a loss of IDR -521 billion in 1Q23. This significant loss was attributed to a 17% QoQ increase in funding expenses in 2Q23. Despite this, WIKA's top-line performance showed promise, with revenue increasing by 29% YoY or 13% QoQ. This growth was fuelled by a total order book of IDR 57.29 trillion in 1H23, consisting of carry-over contracts worth IDR 45.82 trillion and new contracts of only IDR 11.47 trillion, marking a 17% YoY decrease (compared to IDR 13.8 trillion in 1H22). With lower expenses from bonds maturing this year and with anticipated reductions in other income expenses in 2H23, we target a lower net loss of IDR -796 billion by the end of 2023.
WIKA’s Debt Standstill usbmission Progress
As of 1H23, approximately 75% of the total loans submitted by the Company for standstill have gained approval. It's worth noting that the standstill submission process applies exclusively to WIKA, as its subscribers operate independently in this regard. This submission is for loans categorized as long-term investments. Concerning bonds, WIKA intends to either pay them off or extend their maturity. Up to May 2023, WIKA has made timely payments of its bonds and Sukuk Mudharabah I Phase 2 from 2021, totaling IDR 69.60 billion. WIKA is confident that this process will enhance the company's financial stability. Notably, IDR 331 billion of WIKA’s bond from the 2020 Series A Phase I, is maturing on December 18th.
Valuation: 4% downside, Recommendation: SELL
Based on the 1H23 results, we have set a new target price of IDR 367 within one year, corresponding to a 26.57x PER and reflecting a 4% downside potential. As a result, we are revising our recommendation to "Sell."
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