1. 1 of 6
PT Wijaya Karya Beton, Tbk. (WTON) - Lead The Market With Bright Infra Budget
Muhammad Bima Baykhaqi
bima.baykhaqi@buanacapital.com
(62-21) 515-0203 (Ext 325)
Suria Dharma
suria.dharma@buanacapital.com
(62-21) 515-0203 (Ext 320)
Market Capitalization Rp 11,373,683,913,000
Number of Shares 8,715,466,600
Daily Volatility 2.0 %
BUY
TARGET PRICE : Rp 1,535
EQUITY RESEARCH Thursday, 19 March 2015
LAST PRICE Rp 1,310
VOLUME 12 MONTH 294,758 Lot/Day
VALUE 12 MONTH Rp29.82 Bn/Day
HIGH 12 MONTH Rp 1,420
LOW 12 MONTH Rp 665
Sources: Company, Buana Research
Exhibit 1. Financial Summary
We upgrade WTON to BUY with TP Rp 1,535 (12% upside) based on
33.61x PER 2015F. WTON has the largest precast capacity at 33.3% of
Indonesia’s production. It holds 42.7% market share. Jokowi’s RP JMN
to develope infrastructure in Indonesia is the primary catalyst to im-
prove its order book and revenue. WTON is trading at 28x FY15F PE and
4.5x FY15F PBV.
Largest Capacity, and still expanding. WTON, which has a production
capacity of ~2.2 million tons p.a. in 2014 is the largest precast company
in Indonesia. It is raising capacity to 2.3 million tons in 2015, as opera-
tion of facility in South Lampung factory and Makassar-South Sulawesi
factory due to start. WTON targets 3.3 millions tons capacity in 2018.
RP JMN Annual Budget is 9x Previous MP3EI’s Annual Infrastructure
Investment Budget. 44.5% of then previous President SBY’s MP3EI pro-
gram was allocated to develop infrastructure, equivalent to Rp.1,786 trn
for 15 years, or an average of Rp.119 trn p.a. The implementation has
brought positive growth to the construction sector by Rp.70.1 trn/year in
2013-2014. Jokowi’s RP JMN program will have a estimated budget of
Rp5,452 trn for 2015-19, or equivalent to Rp1,090 trn per year. This an-
nual budget is 9x the MP3EI’s annual infrastructure investment budget.
Positive Financial Outlook. WTON contributed 26% to WIKA’s net profit
and does not rely on the later. WTON markets to both government and
private sector. Its revenue reached Rp 3,277 bn in FY2014, up 24% YoY
from Rp 2,644 bn in 2013. We forecast EPSg of 25% in 2015. WTON,
which has the largest capacity among peers and is supported by premi-
um quality products, booked net profit of Rp326 bn in 2014, or increased
by 34.17% YoY from Rp 243 bn in 2013.
Shareholders
PT Wijaya Karya (Persero) Tbk : 60.00 %
Wijaya Karya Foundation : 0.99 %
Koperasi Karya Mitra Satya (KKMS) : 11.22 %
Treasury Stock : 4.33 %
Public : 23.47 %

2. 2 of 6
Two New Factories Will Increase The Capacity
WTON, which has a production capacity of approximately 2.2 million tons per
year in 2014, is now raising its capacity to 2.3 million tons in 2015 and is tar-
geting 3.3 millions tons capacity in 2018, as operation of its South Lampung fac-
tory and Makassar-South Sulawesi factory start to produce. On top of that, ac-
cording to the management, WTON can also increase its capacity by 40% if it
adds working days and time shifts. WTON has the largest production capacity
(33%) of the total Indonesia capacity, or equivalent to 2 million per year based
on its sales. Backed by 11 factories and 6 sales areas throughout Indonesia,
WTON holds approximately 42.7% market share. Each sales area is supported by
the adjacent factories in order to minimize transport cost of the products. WTON
believes a transportation distance of larger than 250km from the factory I not
sufficiently economical for the company.
Sources: BCI Asia, Company
Exhibit 2. Market Share of WTON Based on Sales (2013)
Thursday, 19 March 2015
Exhibit 4. WTON’s Production Facilities and Sales Areas
Sources: Company
Exhibit 3. WTON’S Production Capacity
Sources: Company

3. 3 of 6
RP JMN Annual Budget is 9x than Previous MP3EI’s Annual Infrastructure Investment
Budget. MP3EI, a work program of Former President Susilo Bambang Yudhoyono,
brought a positive outlook for the construction sector. It has total budget of Rp1,786 trn
for the period 2011-2025, or equivalent to Rp119 trn per year; Such program created a
positive growth in the construction sector by Rp.70.1 trn/year in 2012-2014. Under Presi-
dent Jokowi, a similar infrastructure program, called RP JMN, will have a budget of
Rp5,452 trn in the period of 2015 to 2019. The Jokowi program is equivalent to Rp1,090
trn per year. In other words, the average annual budget of RP JMN is 9x larger than MP3EI
program. The RP JMN in expected to be funded 22% from the APBN and will start in
1H2015. We are assuming that the budget will get implemented at least 58.9% (based on
2014 actual vs budget). We also assume BCI Asia construction projection of Rp 446 trn
will take place. All in all, the combined program we expect will result to total construction
of Rp1,088 trn in 2015. Under this scenario, we believe the implementation of RP JMN
will accelerate growth of construction sector by Rp580.5 trn p.a. in 2014-2015, or 8x larg-
er than previous period of Rp70.1 trn/year. WTON will get positive impact from growing
demand of the precast concrete. In fact, BCI Asia estimates demand for precast concrete
will grow 16.3% CAGR between 2014-2018.
Exhibit 4. Estimated Annual Budget Of MP3EI vs RP JMN
Thursday, 19 March 2015
Sources: BCI Asia. Statistics Indonesia, Buana Research
Exhibit 6. Growth Of Construction Sector
Sources: Bappenas, Buana Research Sources: BCI Asia
Exhibit 5. Forecasted Demand Of Precast Concrete

4. 4 of 6
Positive Financial Outlook.
WTON contributes 26% to WIKA’s net profit but does not rely on the later. In
2014 WTON, which has customers from both government and private sector,
was able to reach revenue of Rp 3,277 bn, up 24% YoY from Rp 2,644 bn in 2013.
on the back of continuous revenue growth, we forecast EPSg to reach 25% in
2015. WTON, which has the largest capacity among competitors and is support-
ed by premium quality products, booked net profit of Rp326 bn in 2014, or in-
creased 34.17% YoY from Rp243 bn in 2013.
WTON’s revenue has a CAGR of 18.2%, while net profit has a higher CAGR of
31.7% between 2009-2014.
Thursday, 19 March 2015
Exhibit 8. WTON’s Revenue
Sources: Company, Buana Research
Exhibit 9. WTON’s Net Profit
Sources: Company, Buana Research
Exhibit 7. WTON’s Top 10 Buyers
Sources: Company, Buana Research

5. 5 of 6
WTON’s Competitors
WTON which holds ~33.1% production capacity in Indonesia precast concrete is arguably
ahead of its competitors. Its main competitors, Adhimix precast (once belonged to ADHI)
and Waskita Beton Precast, belonged to WSKT, operate with far smaller capacity, of ~40%
of WTON’s. As for competition in the ASEAN region, WTON have competitors from two
Malaysian companies, namely ICP and CEPCO. Their capacity, each, is also smaller, at 50-
70% WTON’s. WTON also has competitive advantage compared to its competitors be-
cause WTON is able to produce special designed items. Its largest revenue contribution,
though, is derived from pc pile. We expect competition from Waskita Beton Precast in
the future will emerge, as Waskita Beton plans to increase capacity up to 2 million and
plans to IPO in 2016. Until then, however, we think WTON will still dominate the market.
Forecast Changes
We change our forecast for 2015 and lower our projected revenue by –14.48%,
to Rp 3,651 bn. On the other hand, we lower our projected 2015’s gross profit
by –8.31% to Rp 585 bn. On the bottom line, we change our 2015F net profit
forecast by –7.44% to Rp 398 bn. However, we now based on a higher PER of
33.61x and upgrade WTON to BUY with TP Rp 1,535 (12% upside). Currently
WTON is trading at 28x FY15F PE and 4.5x FY15F PBV.
Thursday, 19 March 2015
Exhibit 10. Production Capacity of Indonesian Precast Concrete Industry
Sources: MARS, Buana Research
Exhibit 11. Forecast Changes
Sources: Company, Buana Research

6. 6 of 6
Exhibit 12. Financial Summary
Sources: Company, Buana Research
Thursday, 19 March 2015

7. 7 of 6
PT. BUANA CAPITAL
INDONESIA STOCK EXCHANGE BUILDING
TOWER II, 26th
FLOOR
JL. JEND. SUDIRMAN KAV.52-53
JAKARTA 12190, INDONESIA
ANALYSIS AND REPORTS OF THIS WRITTEN, PRODUCED AND DISTRIBUTED BY PT BUANA CAPITAL RESEARCH
DEPARTMENT. ALL CONTENTS ARE BASED ON INFORMATION OBTAINED FROM THE DATAS AVAILABLE FOR THE PUBLIC AND
VARIOUS SOURCES BELIEVED TO BE RELIABLE BUT PT BUANA CAPITAL RESEARCH DEPARTMENT MAKES NO
REPRESENTATION AND ACCEPTS NO RESPONSBILITY OR LIABILITY AS TO ITS COMPLETENESS OR ACCURACY. OPINION OR
INFORMATION IS NEITHER AN OFFER NOR THE SOLICITATION OF AN OFFER TO SELL OR PURCHASE ANY INVESTMENT.
Exhibit 13. Financial Summary
Sources: Company, Buana Research
Thursday, 19 March 2015