Apr 18, 2017 13:16:18

Key takeaways from meeting with Gajah Tunggal ($GJTL)

  • Gajah Tunggal aims revenue growth of 5% - 10% this year. However, its gross margin will be normalized at 15% - 20%, lower than23.4% in FY16.
  • Gajah Tunggal will do refinancing on its debt this year, which company expects to have better interest rate for the company.
  • Its plants utilization currently stood at 66%-78%. Moreover, the company will expand its TBR tire capacity to 2,200pcs/day this year, from only 1,000pcs/day last year.
  • Domestic market will still be the biggest contributor to revenue with 55% of revenue this year, while the rest will be from exportmarket.
  • Gajah Tunggal has annual contract with raw material suppliers based on volume and its price will use average price from previous month.
  • Currently, the stock is trading at 5.95x FY16 PE. (Dony Gunawan)