Andrey WIJAYA, Fauzan DJAMAL, Ryan SANTOSO - RHB Sekuritas
Link to report: https://bit.ly/3cFUYme
BUY, new IDR810 TP from IDR2,100, 38% upside with c.6% yield – implying 6.5x-4.9x FY20-21F P/Es.
We cut FY20-21F earnings on estimated slower construction activity in 2Q20. Large-scale social distancing should drag the progress of infrastructure projects. However, construction should pick up significantly once COVID-19 contained.
Adhi Karya indicated that land clearance – the LRT project’s main hurdle – should be done in 2Q20.
We increase our cost of capital estimate (WACC: 12.1%, from 10.6%), no thanks to the higher equity risk premium.
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