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WIKA

Contact our analyst Revita
Significant Upside, Buy
6th January 2023
Current price Rp765
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Target price Rp2130
27.7 trillion new contracts booked
In the first 11 months of 2022 WIKA booked new contracts valued at IDR 27.7 trillion or 69% of the revised annual target of IDR 39 trillion. The 11M22’s new contract total was up 66.9% from new contracts in 11M21 of IDR 16.6 trillion. Based on the scope of work, the largest share of new contracts was contributed by buildings at 35% while toll roads and bridges contributed 17%.  Based on project owner, 11M22’s new contracts came from the Government, 44.8%, private companies 34.2%, SOE 13.6%, and investment 7.4%. We believe that WIKA's new contracts in 2023 will be better than 2022 even though the growth might not be as high as in 2022. WIKA will also participate more in the new capital city IKN project. As of September 2022, WIKA has received 2 IKN projects worth IDR 1.1 trillion from toll roads and flats for IKN infrastructure workers using modular technology. Our new contract growth forecast for  2023 remains conservative but double digits at IDR 47 trillion.

Maintaining DER levels
WIKA's  Debt to Equity (DER) ratio for 9M22 is 1.83x.  WIKA issued bonds and SUKUK worth IDR 2.5 trillion in Feb 2022.  All funds from the bond issuance will be used for the payment of short-term debts. Meanwhile, funds from the issuance of the sukuk will be used to finance infrastructure and building projects. We calculate that with the issuance of the bonds and Sukuk, DER will be maintained at the level of 1.83x in 2022. and 1.81x in 2023.  WIKA is working  to improve cash flow to reduce future dependence on bank loans.

Valuation: significant upside, BUY
We have a target price within one year of IDR 2,130 or trading at 11.1x PER which gives significant potential upside. We maintain our recommendation to BUY.

Read the full report
Previously
​WIKA Apr2022
​WIKA Feb2021
​WIKA Sep2020
​WIKA Aug2019
WIKA, August 2017
WIKA, July 2016
WIKA, September 2015
WIKA, July 2013
WIKA, July 2012
PT. Binaartha Sekuritas

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