Christoper

I. Objective
BambangSupriyatno is an investor with a moderate risk profile and has to be sure whether he is
investing on the right stocks. Currently Bambang has been considering in investing a big amount of
money on Krakatau Steels stock, which is known as the largest steel manufacturer in Southeast Asia. To
make sure that he is investing on the right place, he intends to do a background check on the PT
Krakatau Steel Tbk.
PT Krakatau Steel Tbk, which has been building a loyal relationship with its customers for more than 20
years, took a big step in November 2010 by officially listed in BEI (Bursa Efek Indonesia) with a stock
code KRAS. But there has been conflicts going on during IPO that the sharing price was claimed too
low. People were outraged by the fact that the price was only Rp 850,- per share. Mustafa Abubakar, the
Ministry of State Owned Enterprise, and the underwriter denotes the price of its initial public offering of
shares of PT Krakatau Steel is already optimal. Harry M Supoyo as the President Director of PT
MandiriSekuritas said that the stock pricing Krakatau Steel cannot only be seen from the absolute value,
and that the stock prices of Steel producers should also be compared with similar companies.
Because of that, Bambang decides to compare it to the financial performance of PT GunawanDianjaya
Steel and PT Jaya Pari Steel as the steel companies which were already settled in BEI before PT Krakatau
Steel.
II. Analysis
Bambang use several methods to assess the financial performance of each company. There are
Trend Analysis, BUMN Financial Scoring, and DuPont Formula.
CAGR
..

DuPont System
Based on the DuPont system, the highest ROE is PT Gunawan Dianjaya and the lowest is PT Jaya Pari
Steel.
- PT Gunawan Dianjaya has the highest ROE and PT Jaya Pari Steel has the lowest.
- Krakatau Steel has the highest equity multiplier and Jaya Pari Steel has the lowest. This does not
mean that Krakatau is the best choice because it may have high liability or it takes on more debt.
- PT Gunawan Dianjaya has the highest total asset turnover. This means that it can make use of its
assets effectively.
- PT Gunawan Dianjaya also has the highest profit margin ratio. This means that it can get profit
the most out of its revenues.
Christoper
Based on those facts, PT Gunawan Dianjaya could be the best choice for Moodys, but he needs to
analyze deeper by using five-step calculation of DuPont system because of different accounting practice
that used by each company.

BUMN Financial Scoring
Based on BUMN Financial Scoring, PT Gunawan Dianjaya and PT Krakatau Steel both get AA rating. But if
we look on the scoring, we can conclude that PT Gunawan Dianjaya (score: 60.5) is better than PT
Krakatau Steel (score: 58).