Tuesday, March 8, 2011

PT Astra Graphia Tbk (ASGR)

by Kim Eng Securities

Astra Graphia booked net profit of Rp118b and revenue of Rp1.57t for FY10, representing growth of 77% y/y and 17% y/y, respectively. For FY11, management expects revenue to grow by 10?20% to between Rp1.7t and Rp1.9t. The company said it would maintain dividend payout ratio at 40%. This would translate to an attractive yield of 5.2%.

Our View
Net profit and revenue for FY10 were in line with our expectations. We attribute this to the surge in revenue in 4Q10, which amounted to around Rp717b (approximately 46% of full-year revenue). The huge boost came from the rise in rental and sales of document solution machines, as well as IT contract projects, especially with respect to regional government agencies and state-owned enterprises.

We believe document solution products with colour printing functionality will continue to underpin revenue growth this year. This is because of the higher margins they command. Management said colour printers sales grew by 80% y/y in FY10, accounting for 25% of the total sales volume of its document solution products. It expects colour printer sales to grow by at least 50% this year.

Assuming a 40% dividend payout ratio, we forecast FY10 dividend distribution of Rp47b or Rp35/share, including the Rp10/share payout in November 2010. This would imply a 5.2% yield at the current price.

Action & Recommendation

We reiterate our BUY recommendation and target price of Rp1,355, pegged at 13.7x FY11F PER. Our FY11 revenue growth forecast of 10% is also unchanged.

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