Perhatikan WIIM (Wismilak Inti Makmur)

Wismilak Inti Makmur's (WIIM) share price, which has shot up by 25% in just two days since Tuesday, still provides an attractive 30% potential upside to our DCF-based (*) IDR1,050 TP (*) , which is based on assumptions of WACC of 9.3% and 5% long-term rate.

WIIM is currently trading at 12.3x and 7.8x 2013 and 2014 PERs respectively, representing 39% and 57% discounts to industry leader Gudang Garam (GGRM), and 34% and 52% discounts to our consumer sector PE.

We believe the company's strong earnings growth of 91% y-o-y and 58% y-o-y in 2013 and 2014 respectively, together with its very low 2013 PEG of 0.1x, make WIIM a compelling bargain.

However, investors making a beeline for this bargain stock should take into consideration:

i) execution risks, and
ii) the discount factor in view of an expected margin squeeze in 2015 for WIIM's SKM products as it would then be fully exposed to the tier-1 excise tax bracket.

BUY

Source : Listri Valsa
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