Dec 16, 2010

Duta Graha, cheap & bulk of contracts

Despite a gloomy market, construction company PT Duta Graha Indah Tbk (DGIK) soared 31% in 16 days to IDR131 per share, propelled by a market rumor that the company becomes take over target.
"Duta Graha is lagging stocks. It is possible when the company becomes take over target because it is still cheap," several sources said today.
Duta Graha is a construction company, controlled by Indonesian businessman Anton Sugiono, with the core business remains as construction and engineering.
Controling shareholders of Duta Graha are PT Lintas Kebayoran  Kota with 33.03% holding and PT Lokasindo Aditama with 22.35% stake.
Duta Graha Corporate Secretary Djohan Halim said there is no information from shareholders regarding to the information.  "We don't have any information about acquisition target. It is authority of shareholders."
Cheap enough?
Based on September's financial report, Duta Graha's earning per share is IDR7.29. Referring to the earning, Duta Graha stocks are traded at 13.48x annualized price to earning ratio (P/E).
Duta Graha's September book value is IDR170.39 per share, above its current market price of IDR131 per share. Its peers such as Adhi Karya, PT Total Bangun Persada Tbk (TOTL), PT Pembangunan Perumahan Tbk (PTPP), and PT Wijaya Karta Tbk (WIKA) are currently traded at the market prices above their book value per share (BV/share).
Adhi Karya stocks were today closed to IDR900, while its September's BV/share is IDR425.28. Adhi's market price represents 2.11x of the BV/share.
Total Persada stocks stood at closing to IDR245 per share, while its BV/share is IDR155.73. The stocks represent 1.57x of the BV/share.
Pembangunan Perumahan was closed to IDR810, reflecting 3.54x of its September's BV/share at IDR228.56.
Wijaya Karya was traded at IDR690 per share, reflecting 2.33x of its BV/share at IDR295.06. In term of the BV/share, Duta Graha remains the cheapest stocks compared to its peers. 
Bulk of contracts
Djohan added Duta Graha just secured more than IDR500 billion new contracts this month, enabling it to reach target of new contract IDR2 trillion this year. "We just secured bulk of new contracts this month from the government," he said.
As of September 2010, Duta Graha has sealed IDR1.2 trillion new contracts in buildings, roads, and others. "We are now at the position of IDR1.95 trillion. Hence, we are optimistic to reach our target this year."
Duta Graha is targeting a 10%-15% revenue growth this year to nearly IDR1.5 trillion from IDR1.3 trillion last year. In addition, the company is eyeing at least IDR70 billion net income end of this year.

Disclosure: No position at the stock mentioned above.  

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