PT. United Tractors, Tbk (UNTR)
August 12
th
2015
-35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0%JCI JKSE UNTR
Analysts:
Robertus Yanuar Hardy
[email protected]
021 – 5790 5455 ext 204
1H 2015 Financial Performance
Revenue fell 9.4% to Rp25.95 trillion in the 1
stsemester of 2015 from
Rp27.53 trillion in the same period last year. However, several
efficiency measures that the company already applied since the
beginning of this year has led to declining costs and improving gross
profit margin. With the addition of significant contribution from
foreign exchange gains, net income managed to grew 3.6%
year-on-year to Rp3.4 trillion from Rp3.28 trillion.
Latest corporate action
In order to diversify from coal related business, the company has
acquired 75.5% shares of PT Sumbawa Jutaraya, a gold mining
company with 10 hectares of concession area. UNTR has also increase
its ownership in PT Acset Indonusa Tbk (ACST) to 50.1%, that is
expected to increase the contribution from construction service
business in the future.
Rating and valuation
We are maintaining a Hold rating with lower target price at Rp21,000
per share, implying 11.4x of 2016E P/E Ratio. Currently UNTR’s share
price is trading at 10.6x of 2016E P/E Ratio. Stronger US Dollar
exchange rate is a benefit for the company, however its high exposure
to coal related business could be a negative sentiment considering the
ongoing decline of the commodity’s price.
Opportunities, challenges, risks to our estimates
Declining Rupiah exchange rate has benefited the company,
considering most of its cash-in-flows and financial assets are in US
Dollars. According to the company’s financial report, for every 10% of
change in USDIDR exchange rate will affect Rp442.5 bn of change in
profit after tax. This could directly translated as Rp44.25 bn of change
in profit after tax for every 1% of change in USDIDR exchange rate.
However, we see the ongoing volatility in Coal price as the primary
threat for the company to increase sales value in the future. We expect
UNTR still have more rooms for further efficiency measures, in order
to increase profit margins.
(bn Rp)
2014
2015E
2016E
1H 2014
1H 2015
Revenue
53,142
48,401
48,523
27,533
24,949
Revenue growt h
4.2%
-8.9%
0.3%
-9.4%
Gross Profit
12,070
11,098
11,490
5,736
5,658
Gross Profit m argin
22.7%
22.9%
23.7%
20.8%
22.7%
Net Profit
5,370
6,550
6,858
3,288
3,406
Net profit m argin
10.1%
13.5%
14.1%
11.9%
13.7%
Net profit growt h
11.1%
22.0%
4.7%
3.6%
Tot al Debt
1,624
1,260
1,145
1,290
Tot al Cash
10,060
11,228
12,594
11,015
Tot al Asset s
60,292
66,872
72,273
63,820
Ret urn on Asset
8.9%
9.8%
9.5%
Current Price (Rp)
19,500
2016E P/E
10.6
Target Price (Rp)
21,000
2016E P/E
11.4
Current JCI JKSE
4,770
Trade, Heavy Equipment , Mining
Bloomberg tic ker
UNTR IJ
Reuters tic ker
UNTR JK
Market Cap
(tn Rp)
78.3
Market Cap
(bn $)
5.8
USDIDR
13,600
Free float (%)
40
52 week High
(Rp)
24,400
52 week Low
(Rp)
16,425
Daily Av erage Vol
('000 shares)
35,721
Major Shareholders (%):
PT Astra International Tbk
59.5
Others and public
40.5
Relat ive performance vs JCI JKSE:
Other Stories
Construction Machinery sales
UNTR is targeting approximately 3,000 units
of construction machinery sales this year, or a
13.5% decrease from last year’s achievement
of 3,470 units.
The construction machinery market has
decreased 40% for the company in the last 2
years, where UNTR managed to sell 5,013
units in 2013.
However we expect there will be a significant
increase from the sales of Scania busses to the
city government of Jakarta, to be used as
Transjakarta’s fleet.
Possible foreign exchange gain
The company is using Rp13,332 as an
assumption of USDIDR exchange rate in the 1H
2015 financial report. This could directly
translated to a possible significant increase in
profit after tax if we expect USDIDR to close
higher at the end of this year. Currently Rupiah
is in the range of 13,600 – 13,800 per US$1,
or approximately 2% - 3.5% higher.
Segment Contribution
Mining Contracting business segment with PT.
Pamapersada Nusantara as its operator is
currently the largest contributor to the
company’s total revenue with 59% of
contribution,
followed
by
Construction
Machinery 29%, Mining 9%, and Construction
Contractor 2%.
All business segment, except the newly
acquired
Construction
Contractor,
has
recorded a declining revenue in the 1
stsemester of 2015, compare to the same period
last year. However, the 11% increase of USDIDR
exchange rate has led to improving profit
margins, so net profit managed to grew 4%
(rounded from 3.6%) year-on-year.
Sales & Product ion Figures
6M 2014 6M 2015 Chg (%)
Const ruct ion Machinery:
Komatsu
2,207
1,375
-37.7%
UD Truc ks
94
53
-43.6%
Sc ania
242
188
-22.3%
Total sales
(units)
2,543
1,616
-36.5%
Mining Cont ract ing:
Coal Produc tion
(mn tons)
56.4
51.6
-8.5%
Ov erburden Remov al
(mn bcm)
403.9
372.3
-7.8%
Mining:
Coal Sales
(mntons)
3.43
2.81
-18.1%
Past financial performance and future estimates
Income St at ement 2013 2014 2015E 2016E 2017E Balance Sheet
(bn Rp) (bn Rp)
Revenue 51,012 53,142 48,401 48,523 48,765 Asset s 2013 2014 2015E 2016E 2017E
Gross Profit 9,517 12,070 11,098 11,490 11,791 Cash and equivalents 7,936 10,060 11,228 12,533 14,182 EBT 6,587 6,622 8,936 9,337 9,641 Trade rec eivables 11,815 13,113 12,810 13,450 14,123 Net Inc ome 4,834 5,370 6,550 6,858 7,081 Non-trade / other rec eivables 326 474 913 959 1,006 EPS (Rp full amount) 1,296 1,440 1,756 1,839 1,898 Inventories 6,176 7,770 7,839 8,231 8,642 Prepaid taxes 982 1,361 1,342 1,409 1,479
Current Pric e 19,500 Advanc es & prepaids 279 252 488 513 538
P/E 10.6 Other investments 300 550 1,584 1,663 1,746 Target Pric e 21,000 Tot al current asset s 27,814 33,580 36,203 38,757 41,718 P/E 11.4 Restric ted c ash 70 233 250 262 275
Advanc es 32 18 25 27 28
Rat ios & Margins: 2013 2014 2015E 2016E 2017E Investment in assc % joints 433 447 453 476 499
Revenue growth -8.8% 4.2% -8.9% 0.3% 0.5% Other investments 656 1,108 1,597 1,677 1,761 Gross Profit margin 18.7% 22.7% 22.9% 23.7% 24.2% Fixed assets 14,574 13,625 15,435 17,520 19,379 Net Profit margin 9.5% 10.1% 13.5% 14.1% 14.5% Mining properties 12,027 9,149 9,848 10,340 10,857 Net Profit growth -16.4% 11.1% 22.0% 4.7% 3.3% Investment property 51 51 52 55 58
ROA 8.4% 8.9% 9.8% 9.5% 9.1% Dfrd explrtn&devlpmnt expndtrs 228 364 504 529 556
ROE 13.6% 13.9% 15.0% 14.2% 13.4% Deferred c harges 227 209 279 293 308
Total Debt 2,677 1,624 1,260 1,145 1,043 Deferred tax assets 763 1,015 1,177 1,236 1,298 Cash 7,936 10,060 11,228 12,533 14,182 Non trade rec eivables 81 102 114 120 126
DPS (as paid) 585 535 591 716 745 Tot al non-current asset s29,548 26,712 30,669 33,516 36,175 DPR (as paid) 37.8% 41.3% 41.0% 40.8% 40.5% Tot al Asset s 57,362 60,292 66,872 72,273 77,893 Cash Flow s 2013 2014 2015E 2016E 2017E Liabilit ies 2013 2014 2015E 2016E 2017E Changes in working c apital 1,713 451 76 (872) (905) Trade payables 10,582 11,965 12,370 12,679 12,996 Net Inc ome 4,834 5,370 6,550 6,858 7,081 Non-trade payables 306 659 790 849 913
Deprec iation 3,377 2,685 3,095 3,064 3,034 Taxes payable 323 758 772 838 909
Cash flow from operat ion 9,923 8,506 9,722 9,051 9,210 Ac c ruals 1,132 1,008 1,531 1,645 1,769 Dividend (2,182) (1,996) (2,203) (2,672) (2,780) Customer deposits 199 125 422 460 502
Loans (1,073) (986) (243) (114) (102) Defered revenue 216 279 287 310 334
Leases 52 (439) (154) (86) (77) Short-term employee benefit 152 181 496 536 578
Otther Borrowings (120) (67) (122) - - Short-term bank loan 33 23 66 71 76
Other LT Liabilities 159 (9) 66 64 69 Current portion of LT Debts 1,608 1,297 1,130 1,017 915
Changes in equity 669 (430) 645 418 440 Tot al current liabilit ies 14,561 16,298 17,865 18,406 18,994 Cash flow from financing (2,483) (3,943) (2,012) (2,390) (2,450) Deferred tax liabilities 2,619 1,945 2,059 2,213 2,379 Investments & other assets (339) (716) (1,529) (182) (191) Provision 56 74 102 111 119
Capex (2,754) (1,736) (4,905) (5,150) (4,892) Long-term employee benefit 1,189 1,290 1,497 1,617 1,747 Cash flow from invest ing (3,499) (2,440) (6,541) (5,357) (5,109) Long-term debt 2,490 1,319 924 832 749
Other LT financ ial liabs 799 790 856 920 989
Equit y 2013 2014 2015E 2016E 2017E Total non-c urrent liabilities 7,153 5,417 5,439 5,693 5,983 Share Capital 933 933 933 933 933 Tot al Liabilit ies 21,713 21,715 23,304 24,100 24,978
Additional paid in c apital 9,704 9,704 9,704 9,704 9,704
Retained earnings 21,062 24,420 28,767 32,954 37,255 1Q 2015 Performance (Rp bn) 1H 2014 1H 2015 Change
Appropriated 187 187 187 187 187 Revenue 27,533 24,949 -9.4%
Unappropriated 20,876 24,234 28,581 32,767 37,068 Gross Profit 5,736 5,658 -1.4%
Investment fair value reserve 152 173 140 152 166 EBT 4,336 4,542 4.7% Exc hange differenc e 1,723 1,780 2,210 2,387 2,578 Net Inc ome 3,288 3,406 3.6% Differenc e due to ac quisition (348) (348) (348) (348) (348) EPS (Rp full amount) 881 913 3.6%
Sub Tot al Equit y 33,220 36,660 41,404 45,780 50,286
Non c ontrolling interest 2,429 1,917 2,165 2,393 2,629
