REMINDER !
CITI (CG)
SRIL BUY TP 580
Initiate at Buy/1H – SE Asia’s Largest Integrated Textile Company
Key beneficiary of positive outlook for apparel & footwear market – We initiate
at Buy / High Risk (1H) and target price of Rp580 on Sri Rejeki Isman (Sritex),
Southeast Asia’s largest vertically integrated textile manufacturer.
Our positive view is based on
1) a favorable outlook for the Asia-Pacific (including Indonesia) apparel
& footwear market;
2) accelerating growth for Sritex after capacity expansion; and
3) expected margin enhancements. We forecast 18% earnings CAGR over FY16-
18E, a spike from 8% in FY14-16, which we believe is not captured in current stock
valuations (5.8x FY18E P/E)
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