ADHI: On The Threshold of Better Expectations, Maintain BUY with TP Rp2,800
14 May 2018
ADHI: On The Threshold of Better Expectations, Maintain BUY with TP Rp2,800
1Q18 result proved to be a good start for ADHI, whichbottom line surprisingly grew by 282.8% YoY to Rp73billion (accounting for 17.6% of our estimates), thanks to LRT Jakarta Cawang – Cibuburprojects, TelukLamong dock project in East Java, and EPC business.This robust earnings growth came on the back of 39.7% YoY net revenue and a higher margin as the result of EPC business has started reap the positive margin after the loss making since 2014. As of 1Q18, the company has secured Rp3 trillion of new contract and accounting for13% of our new contract target in 2018F of Rp23 trillion. We believe this decent 1Q18 overall result and its recovery in EPC business will be the positive catalyst for the counter. Hence, we maintain our BUY call to the stock with target price at Rp2,800/share.
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