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INVESTMENT PARAMETER<br />
“Disclaimer statement in the last page<br />
is an integral part of this report”<br />
www.pefindo.com<br />
Target Price Adjustment<br />
<strong>Jaya</strong> <strong>Pari</strong> <strong>Steel</strong>, <strong>Tbk</strong><br />
We have made several adjustments to our previous forecast and adjust our<br />
Target Price upward to the range of IDR380 – IDR590 per share, based<br />
on the following considerations:<br />
Indonesian steel market this year is forecasted to reach IDR71 trillion,<br />
up by 7% YoY compared to IDR66 trillion in 2012, mainly due to solid<br />
economic growth in domestic that could drive to the increasing of<br />
manufacture, automotive and infrastructure activities, further boosting<br />
steel consumption.<br />
Financial performance during 9M12. We view that JPRS’s achievement<br />
up to 9M12 was in line with our revenue projection in the previous<br />
report for 2012 period. Despite a decline performance in 9M12,<br />
however, in line with increasing trend of steel price and augmented with<br />
positive growth of national steel industry, we believe JPRS will be able to<br />
perform better in the years ahead.<br />
Risk free rate, equity premium, and beta assumption are 5.5%, 7.6%,<br />
and 1.0x respectively.<br />
Business Prospects<br />
In line with the positive growth of infrastructure, construction,<br />
infrastructure and automotive sectors, we believe steel industry has<br />
prospective outlook in the years ahead. This year, steel consumption in<br />
domestic is estimated to increase by 9% YoY or about 11 million tons,<br />
compared to 10.4 million tons in 2012. Meanwhile, domestic production<br />
capacity is predicted only 6.3 million tons this year. By considering above<br />
factors and augmented with JPRS product distribution for domestic market,<br />
we foresee that JPRS’s revenue will be able to grow by 5% CAGR during<br />
2011 – 2016 periods.<br />
Table 1: Performance Summary<br />
2009 2010 2011 2012P 2013P<br />
Revenue [IDR bn] 303 428 641 461 533<br />
Pre-tax Profit [IDR bn] 1 39 48 15 29<br />
Net Profit [IDR bn] 1 28 37 11 22<br />
EPS [IDR] 0.7 37.9 49.9 15.1 29.1<br />
EPS Growth [%] (99.0) 5,437.5 31.5 (69.7) 92.2<br />
P/E [x] 103.5 15.3 9.7 23.8* 12.4*<br />
PBV [x] 0.7 1.3 1.0 0.8* 0.7*<br />
Source: <strong>PT</strong> <strong>Jaya</strong> <strong>Pari</strong> <strong>Steel</strong> <strong>Tbk</strong>, Pefindo Equity & Index Valuation Division Estimates<br />
*) Based on share Price as of March 19, 2013 – IDR 360 per share<br />
March 20, 2013 Page 2 of 10
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