by Kresna Securities
FY10 result was inline with our forecast deviated only by 0.4%-4.5%. This year, we expect revenue to grow by 10.7% due to tariff adjustment this September as well as the operation of 2 new toll roads, before accelerating by 13.5% YoY in 2012 due to full impact from both issues. The delay on subsidized fuel limitation and the completion of land clearing act in this year will provide positive catalyst going forward. Maintain BUY with TP of Rp4,200.
• No surprise in FY10 result. The result in 2010 was inline with our expectation,revenue deviated by 0.4%, operating profit by 3.1% while net income by 4.5%. We believe the result has missed our forecast by 4.5% due to higher than expected interest expense of Rp763.0bn vs our estimate of Rp717.8bn.
• We maintain our forecast in 2011 as FY10 result met our forecast. We expect revenue to increase by 10.7% YoY to Rp4.8tr this year on some issues: 1) 4.2% traffic volume growth to 997.0m vehicles, 2) Tariff adjustment in 11 toll roads on September (by 13% in our estimation), and 3) The operation of 2 new toll roads namely Semarang-Ungaran and Waru-Sepanjang. However, we believe the impact on both tariff adjustment as well as the operation of new toll roads will be fully reflected on FY12 performance, which we expect revenue to rise by 13.5% YoY to Rp5.5tr.
• Margin continues to expand. Operating margin would improve by 2.1% to 48.8% this year in respect to efficiency programs, such as the implementation of e-toll cards. Hence, operating profit is expected to jump by 15.6% YoY to Rp1.4tr. At bottom line, net margin is expected to expand by 2% to 29.3% while net income rising by 18.9% YoY to Rp1.4tr.
• Our view on recent situation. The subsidized fuel limitation delay will provide upside risk to our valuation along with the completion of land clearing act. Subsidized fuel limitation was initially planned to be enacted in March while the land clearing act is in the process of reviewing in order to complete in 2Q11.