Nomura Equity Research raised its target price on cement maker
PT Indocement Tunggal Prakarsa Tbk to 26,900 rupiah
from 23,400 rupiah and kept its 'buy' recommendation on higher
production volume and improved enterprise value/earnings before
interest taxes depreciation and amortization (EV/EBITDA).
"Despite recent outperformance of the cement sector and
INTP's share price, we still favour the sector, as in our view
the cement sector and INTP will continue to benefit from rising
infrastructure spending and a strong property market," Nomura
analyst Andy Lesmana wrote in a note on Monday.
Given high demand and tight supply, Nomura said it expects
cement companies, including INTP, to raise prices, partly to
pass on the impact of potentially higher operating costs.
"We also expect that additional volume from INTP's new
plant, which INTP expects to complete in 4Q13, to be a catalyst
for the share price," it added
Indocement's selling price has rsien 6.4 percent as of
September, the fastest in the past three years due to strong
demand and tight supply, which helped improve the company's
operating margins and mitigate potential rising operating costs,
the note said.
Shares of the cement firm were down 0.45 percent at 22,300
rupiah, while the broader index was up 0.37 percent.
1045 (0345 GMT)
(Reporting by Andjarsari Paramaditha, Editing by Sunil Nair)