Mandiri Sekuritas Wijaya Karya: FY09 net profit grew 21.3% yoy, within consensus expectation (WIKA, Rp355, Buy, Rp460)

􀂄 FY09 revenue was relatively flat compare with FY08 (+0.5% yoy), yet gain from joint operation was up to Rp22bn from Rp3bn loss in FY08. This is lower than our and consensus estimates. We noticed that gross margin improved (to 9.8% from 6.8% in 2008). We believe it was due to cost transfer to customer, given higher tax rate (around 2.1% from sales in 2009 vs 1.2% in 2008), and better quality of projects they obtained in 2009. Thus down to bottom line, the figure was inline with consensus estimates, and slightly above ours.

􀂄 WIKA has Rp1.2tn cash position (+15.2% yoy) and total debt of Rp156bn (-75.3% yoy) as per FY09. It translates to cash/share of Rp180, or 50.8% from its current share price. We currently still have a Buy recommendation for WIKA, with our FY10F revenue and net profit growth forecast of around 12.4% yoy and 48.9% yoy. WIKA is currently trading at PER10F of 7.7x.