Riset Gajah Tunggal oleh DBS

Gajah Tunggal: Not Rated; Rp 1,720; GJTL IJ 

FY10 revenue growth target of 25%. GJTL targets 25% y-o-y revenue growth in FY10 to Rp 9.92 trillion on the back of 20% growth in expected sales volume to 30m tires. In 1H10, GJTL has booked 186.74% y-o-y growth in net profit of Rp 415bn from Rp 144.73bn. This robust growth is mainly driven by this year global automotive industry growth due to the economic recovery. Their export sales, which account for 40% of its revenues have also improved due to increase in demand from USA and Middle East. As for FY11, GJTL has set a more conservative target of 10-20% revenue growth.

This year, GJTL has set aside US$ 30-40m for capex on top of its yearly maintenance expenses of around US$20-25m. With this capex, GJTL will increase its production capacity from 40,000 radial tires per day to 45,000 in FY11. As for motorbike tires, GJTL expects the capacity to increase from 75,000 motorbike tires per day to 90,000 in FY11 and reach 105,000 in FY12.