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Wintermar Offshore Marine (WINS) remains attractive although we have seen the recent negative sentiment from the BP Migas which will be taken over by the Ministry of Energy & Mineral Resources (ESDM). WINS is currently trading at 7x and 6x 2012 -13 PER. Our take regarding the BP Migas takeover WINS contracts are signed with.

Wintermar Offshore Marine (WINS) remains attractive although we have seen the recent negative sentiment from the BP Migas which will be taken over by the Ministry of Energy & Mineral Resources (ESDM). WINS is currently trading at 8x and 7x 2012 -13 PER. Our take regarding the BP Migas takeover WINS contracts are signed with.

We attended United Tractors’  (UNTR IJ, SELL, TP IDR19,700) annual analyst meeting yesterday and witnessed an unusually pessimistic note from the largest player within the Indonesian heavy equipment market. Yet, we are delighted to learn that our new call and target price on UNTR found a firmer foundation as the company confirmed of our FY.

We reiterate our strong BUY on WIKA with a new TP at IDR1,850 TP, providing a 20% upside to the current share price. We are basing our TP on a target PE of 16.5x over its FY14 earnings, which is +1 standard deviation above its historical average forward PER. We have upgraded our target mainly.

Sector Outlook We maintain an OVERWEIGHT call for the Constructions sector upon the following reasons: i) valuations are reasonable compared to regional players, ii) the government’s infrastructure projects are expected to accelerate earnings growth, iii) there are lower risks in executing projects, as laws will be enforced, iv) the property market’s outlook is solid for.

We are re-initiating coverage on the construction sector with an OVERWEIGHT for the following reasons: i) valuations are reasonable compared to regional players, ii) the government’s infrastructure projects are expected to accelerate earnings growth, iii) there are lower risks in executing projects, as laws will be enforced, iv) the property market’s outlook is solid for.

WHAT’S BREWING? UNTR has been reported to submit two proposals to the state power company PLN for a 2x600MW and a 600MW power plant in South Sumatera (dubbed as PLTU Sumsel IX & X). The plants to be developed are the so-called “mine-mode”s, where the power generator itself is located at the coal mining site.

We re-instate coverage on Wijaya Karya (WIKA) with a strong BUY and IDR1,600 TP, reflecting a potential 16% upside from its current price. As we roll over our valuation to FY13, we base this TP on a 14.6x target PER over its FY14 EPS. The company’s long-standing relationship with state oil & gas company Pertamina.

We are re-initiating coverage on the construction sector with an OVERWEIGHT for the following reasons: i) valuations are reasonable compared to regional players, ii) the government’s infrastructure projects are expected to accelerate earnings growth, iii) there are lower risks in executing projects, as laws will be enforced, iv) the property market’s outlook is solid for.

Earlier in our IIMS report, we already stated that we like the Agya and Ayla twins upon seeing it in the International Motor Show. We positively view Astra’s bold move to introduce the cars even though government hasn’t finalizing the LCGC incentive. The exterior is appealing and the interior is spacey with a very affordable.