by Etrading Securities
Integrated Infrastructure Logistics Company AKRA and its subsidiaries business are divided into four segments: Trading and distribution, logistics, Manufacturing, and coal mining. Strong Logistics infrastructures and extensive supply chain capabilities is an integral part of the Company's Trading and Distribution business that enables the company to deliver petroleum and chemical products to its customers across the country.
The main Contributor‐Petroleum Business
Starting petroleum Business since October 2005 after deregulations, AKRA enjoying first mover advantage as the first private company to import and distribute petroleum products in Indonesia. AKRA’s Petroleum business recorded an impressive revenue growth with 55% CAGR in 5 years.
Entering Coal Mining and Coal Logistic Infrastructure Currently, AKRA owns five coal mining concessions at Central Kalimantan with a total concession area of 24,388 hectares of coal mining through its owned subsidiary PT Anugrah Karya Raya that was just acquired in 2009. To support the coal mining operation, AKRA also developing Coal Logistic Infrastructure. The Coal infrastructure Logistic will not only be used by AKRA but also will be charged to the third parties for using its hauling roads and coal terminal.
Strong Cash After SOBI Divestment
After the SOBI divestment which is worth of IDR 1.68 trn, AKRA has a strong cash position. Its enable the company to distribute second dividend interim worth of IDR 764 billion. AKRA also plans to spend $110 million in capex, that 30% of it will be spent this year and 70% in the 2012. However, We do not see any difficulties for the company to finance its capex since they have strong cash position. We expect AKRA still have some IDR 630 Bn in cash by the end of 2011 after the Dividend payment and to finance its capex plan for 2011.
We initiated AKRA with Buy recommendation and 20.7% potential upside. Our Valuation based on DCF calculation with 12.12% of WACC and 3% of terminal growth rate, the company fair value is IDR 3,200 per share which reflect to 18xPE12F.