ILLUSTRATION. The net profit of the paper issuers of the Sinarmas Group increased to double digits.
Reporter: Kenia Intan | Editor: Wahyu T. Rahmawati
KONTAN.CO.ID – JAKARTA. PT Tjiwi Kimia Tbk Paper Factory (TKIM) and PT Indah Kiat Pulp & Paper Tbk (INKP) able to record net profit growth amid depressed income. Bottom line The paper company belonging to the Sinarmas Group has recorded an increase of up to double digits from January to September 2020.
Quoting the financial statements, INKP experienced an increase in net profit of up to 20.75% on an annual basis year on year (yoy) to US $ 287.46 million. Meanwhile, bottom line TKIM also raised 10.35% yoy to US $ 168.26 million.
In terms of sales, the two issuers are compact under pressure to double digits. INKP’s net sales fell by 11.15% yoy to US $ 2.19 billion. Meanwhile, TKIM’s sales were further depressed by 21.41% yoy to US $ 650.21 million.
Binaartha Sekuritas analyst Muhammad Nafan Aji said it was natural that the sales of the two issuers had decreased. According to him, policy lockdown applied in various countries has indeed reduced demand pulp and paper in the market. This condition is not much different from the decline in demand that has occurred in other business sectors. On the other hand, the ability of INKP and TKIM to mitigate the risk of Covid-19 through efficiency turned out to be helpful bottom line.
Therefore, Nafan sees that the prospects for the two issuers are still good in the future. Moreover, when economic conditions recovered by loosening the implementation lockdown in different regions. “If Covid-19 can be controlled, it means that it can increase economic activity. This can increase demand, “he told Kontan.co.id, Wednesday (18/11).
The still attractive prospects of INKP and TKIM encourage Nafan to recommend buy against INKP shares with a target price of IDR 10,275 and buy TKIM with a target price of IDR 7,425. “PER INKP is still 11.15 times, while PER TKIM is 8.36 times. Meanwhile industrial PER is 36.55 times, so INKP and TKIM are still attractive,” he added.
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