AKR Corporindo (AKRA) - Performance as Expected

AKR Corporindo (AKRA) – Maintain BUY
Price: Rp1,470 – Target Price: Rp1,900

Performance as expected

  • AKRA’s FY10 earnings and revenue surged by 13% and 36% YoY respectively.
  • Revenue came in-line with our projection while net income only accounted for 92% of our estimate.
  • Every division contributed positive top line growth due to volume growth.Bottom line increase also helped by lower corporate tax rate as free float is more than 40% due to rights issue in 1Q10.
  • The company’s gross and operating margin declined affected by SOBI’s drop in gross profit.
  • We maintain our recommendation and target price Rp1,900 which offers 29% upside. Our price target implies 13.5x – 13.1x PE’11 – 12.Maintain BUY.