Trimegah Bangun Persada Earnings: Mixed Performance; Shares Fairly Valued
Trimegah Bangun Persada's first-quarter 2024 results are mixed. While its top line is tracking well to meet our annual overall projection, its net income is significantly below our forecast, largely due to gross margin compression, less-than-expected contribution from its associates, and higher minority interest deduction. As a result, our annual net income attributable to owners of the company is cut to IDR 4.8 trillion from IDR 8.6 trillion. Despite changes in the bottom line, more than half of the changes in 2024 are noncash line items, which has no impact on our discounted cash flow valuation. Hence, our fair value estimate is reduced to IDR 1,000 per share from IDR 1,140 per share. Although we may see some increase in its share price from recent nickel price recoveries, we think investors should wait for a better entry. We view the stock as fairly traded now.