Infrastructure is on Fire..

I believe 2010 would be the year for Infrastructure sector to get back on fire. The FY 2009 results for some infrastructure related stocks that I cover were excellent. JSMR net income has grown about 40% year on year, WIKA has grown its net income about 25%. ADHI net income is more fantastic grew about 100%.

Over the last 6 months, the infrastructure sector has been lagging the overall market. If you look at this chart, obviously the last couple of days, ADHI, WIKA, and JSMR have started to chase the Jakarta Composite Index (JCI). I believe this is just the beginning and there is still more potential upside for those stocks.

(Source: Bloomberg.Com)

From valuation point of view, those stocks are also still very cheap. Based on their FY 2009 EPS, I made some projection for their FY 2010 earnings with either 20% or 30% growth.

	FY 2009	GROWTH
		20%	30%
		2010F	2010F
ADHI	94.2	113.04	122.46
JSMR	146.5	175.8	190.45
WIKA	33.7	40.44	43.81

Based on the data, the ideal price for 2010 would be:

	PE 10x		PE 12x
	20%	30%	20%	30%
ADHI	1130.4	1224.6	1356.48	1469.52
JSMR	1758	1904.5	2109.6	2285.4
WIKA	404.4	438.1	485.28	525.72

Hence, I would recommend you guys to accumulate these infrastructure related stocks.