Nov 25, 2010

Look at 4Q Astra Graphia performance!

Document solution and IT solution provider PT Astra Graphia Tbk (ASGR) might post revenue of Rp650 billion in the fourt quarter (4Q) of this year.
As of September 2010, Astra Graphia posted Rp848.84 billion revenue and Rp75.54 billion net profit respectively.
In a company research report published by Kim Eng Securities currently, management of Astra Graphia raised its full year 2010 net profit target by 15% to Rp115 billion (yoy growth of 72%).
Astra Graphia also revised up its 2010 revenue target by 7% to Rp1.5 trillion (yoy growth of 12%).
"Astra Graphia performance in 4Q 2010 is the highest," said the company's President Director Lukito Dewandaya yesterday.
According to him, the company in July estimated that 2010 targets of net profit and revenue might reach Rp100 billion and Rp1.4 trillion respectively. "But, we have revised up the targets."
Kim Eng research said Astra Graphia also expects its FY2011 to grow by 10%-20% to Rp1.6 trillion-Rp1.8 trillion.
"The management's FY10 profit and revenue targets were above our expectations," Kim Eng said.
It expects to obtain an additional sum of Rp650 billion in revenue. The additional revenue will come from increased sales volume (and rental income) document solution division and IT contract projects, especially from the government, which will be disbursed during this period.
The revenue from the government is expected to be around 30%-40% of the total revenue of 4Q10.
Document solution products with colour printing, which command a higher margin than those with B&W printing, will still be a primary catalyst of revenue growth for the next year.
Astra Graphia's management expects colour printing to grow by 30% y/y. Currently, the colour printing product contributes to 25% of the total sales volume of its document solution products.
"We raise our FY10 net profit and revenue estimates by 28% to Rp115 billion and 7% to Rp1,48 trillion, respectively. Meanwhile, we maintain our revenue growth forecast of 10% for next year. We also raise our target price based on the Gordon Growth Model to IDR1,355 [representing 13.7x 2011 PER) from IDR1,050 and reirate buy," the report said.

Disclosure: No position at the stock mentioned above. 
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