Mandiri Sekuritas Wijaya Karya: Has secured new contracts worth Rp1.4 tn (WIKA, Rp385, Buy, TP Rp540)

In our yesterday’s meeting with the company, they mentioned that they have secured new contract worth Rp1.4tn up to March 2010. This reflects 13.8% from its FY10F target of Rp10.1tn. This lifted WIKA’s order book to Rp12.1tn. They also believe that they could maintain their gross margin at 12% level throughout the year. Aside from that, the company indicated that they may book bad debt allowances reversal this year, which will act as an upside potential to the company. Currently WIKA is trading at PER10F and PBV of 8.3x and 1.3x, respectively.