Duta Graha – Macmahon targets three mining projects

PT Duta Graha Indah Tbk, cooperated with Macmahon Holdings Ltd, targets three mining coal projects in Sumatera, Kalimantan and Sulawesi. “The tenders have been on qualification phase and the company hopes to win it this year”, said Djohan Halim, Duta Graha’s corporate secretary.

Beside coal mining contracts, the company is also seeking gold mining projects. The company targets at least one project in this year. Beside mining projects, the company also will expand its business to power plant sector. Duta Graha and Shandong Machinery I & E Group Corporation (SDMIEC), a China contractor, aim for the development of PLTU projects owned by PT Perusahaan Listrik Negara in Timika and Maluku.

Based on Pefindo research, Duta Graha is benefited from the implementation of regional autonomy since 2003 due to huge infrastructure projects. Duta Graha’s margins are higher than industry. Its gross profit margin, operating margin and net margin on September 2009 were 12.1%, 8.8% and 4.7%, higher than industry ; 10.3%, 6.3% and 3.3%. Pefindo expects Duta Graha revenue to grow by 15,3% to IDR 1.73 trillion from 2009 expected revenue (IDR 1.5 trillion). Net income is expected to grow 27.2% from IDR 66 billion to IDR 84 billion.

The price of Duta Graha’s stock is still attractive. On September 30, its market price was Rp 97, reflecting a PER of 8.9X, below industry PER (11.3X) and PBV of 0.6X, below the industry PBV (1.4X). By using discounted cash flow and guideline company method valuation, Duta Graha’s stock price target for the next twelve months is ranging between IDR 147 and IDR 193.

Source : Investor Daily, January 18, 2010