Waskita Beton

Precast
WSBP.IJ

Prepared by: Marcella Regina

*for educational purpose only
Company Profile
Subsidiary of

Listed Market Cap (IDRbn)

September 20, 2016 10,280

Sector Shareholders
Basic Industry & Chemicals 60% Waskita Karya 40% Public
Line Of Business
1 2

Precast Concrete Ready Mix

Construction Services
 Operational Area
73 Batching Plants

5 Quarries Capacity: 3.5 mn tons

11 Plants
Cibitung Sadang
(350,000 ton) (375,000 ton)
Palembang Sidoarjo Klaten
(200,000 ton) (400,000 ton) (150,000 ton)
Karawang Kalijati Gasing
(450,000 ton) (250,000 ton) (350,000 ton)
Subang Bojonegara Legundi
(350,000 ton) (350,000 ton) (,000 ton)
 Macroeconomics

Source: Ministry of Finance

Industry Outlook

2019
Government is targeting a 30% of
precast concrete uptake in
national infrastructure projects

40 mn tons
Highlight

BUY “Solid Performance

and Favorable Cash Flows”
RECOMMENDATION
Expect Higher New Contract Achievement

Recovery in Operating Cash Flow

34%
Better Margin & Faster Order Book Burn Rate
CURRENT PRICE: IDR 390
TARGET PRICE: IDR 521
Higher New Contract
New Projects Expected to be Secured
Additional works on:
New Order Book Krian - Legundi - Bunder - Manyar Toll Road
Cibitung - Cilincing Toll Road
Value
Bogor - Ciawi - Suka Bumi Toll Road
IDR2 tn
Several Major Project Tenders
Probolinggo - Banyuwangi Toll Road
Penajam Balikpapan Railway
Singosari-Batu Toll Road

Company’s Target: IDR10.4 tn (+58%yoy)

Higher New Contract

Total Order Book Order Book grows slightly 4% yoy

Lower Carry Over Contract from 2018
New Contract 2018 (-40% yoy)

Revenue 4% yoy
Positive OCF Ahead

Turnkey Payment Due in 2019:

IDR2.6 tn

Lower Turnkey Projects’ Handling

Healthier Cash Flow

 Better Margin
WSBP’s Operating Margin
3
3Q18: 26% Synergy with Waskita Group
3Q17: 24.5%
2
Supply Chain Optimization

1
Operational Efficiency

Acquiring more quarries

Better Margin

4 5
Strategic Plant Locations Gradual Increase in Production Capacity
Faster Order Book Burn Rate
Order Book Burn Rate
i.e. Revenue to Order Book Ratio

Q3 2018:36%
Q3 2017:23%

Quicker Project Execution

Better Earning Performance
Peer Comparison

Market Cap.
PER (x) PBV (x) ROE (%) Yield (%)
(IDRbn)

WSBP.IJ 10,280 10.09 1.4 16 8.95

WTON.IJ 3,486 8.8 1.2 14.65 3.37

INDUSTRY - 23.87 - 10.84 -

Valuation
Discounted Cash Flow Method
Risk Free Rate: 8.1%

Unlevered Beta: 0.81

Market Risk Premium: 7.6%

Cost of Equity: 14.3%

Terminal Growth: 4.75%

Conclusion

BUY
RECOMMENDATION RECOMMENDATION RISKS
1. Lower New Order Book
Achievement
2. Delayed Term Payment
34% 3. Significant Increase in Gearing
Ratio
4. WSKT’s conservative decision to
CURRENT PRICE: IDR 390 hold back some projects
TARGET PRICE: IDR 521
THANK YOU.