New foray to spur growth
What’s New
Astra Graphia booked 1H11 net profit of Rp53b and revenue of Rp648b, representing growth of 21% y/y and 13% y/y, respectively.
Through its subsidiary, AGIT, the company recently signed an agreement with Monitise Asia Pacific Ltd to set up a joint venture to support mobile commerce solutions (eg, mobile money, banking and payment) in Indonesia. The JV, named AGIT Monitise Indonesia, will have an initial capital outlay of US$2m and AGIT will hold a 51% stake.
Our View
Astra’s 1H11 net profit and revenue met our expectation. Revenue growth was bolstered by a 15% y/y increase in document solution revenue to Rp428b, as well as 9% y/y rise in IT solution revenue to Rp221b. Traditionally, revenue in the second half of the year exceeds that in the first half and represents 40‐46% of full‐year revenue. This is because most government projects tend to come in during 4Q.
Monitise Asia Pacific is a JV between UK‐listed Monitise Plc (MONI.LN) and Hong Kong‐based First Eastern Mobile Investments Ltd. Monitise Plc is well‐known for its mobile banking and payment services in the UK, the US, India and Hong Kong since 2006
We are confident that the new mobile solutions business will further spur Astra’s revenue growth. Bank Permata (BNLI.IJ) is the first client and has entered into a memorandum of understanding to use the JV’s mobile solution technology. We have yet to factor the new business into our estimates.
Action & Recommendation
We maintain our revenue growth target of 15% CAGR over the next two years vis‐à‐vis management’s expectation of 25% CAGR. We also roll forward our base valuation to 2012 and our TP thus increases from Rp1,540 to Rp1,700 (based on 12.3x FY12F PER).Reiterate BUY.
source: KIMENG dated 3 August 2011
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