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PGAS

Contact our analyst Eka
BUY
9th June 2021
Price Rp 1125
Target price Rp 1465
Expecting higher volumes
  • In 1Q2021, PGAS revenue declined by -16% YoY to US$ 733 million, driven primarily by a lower contribution from distribution as well as the impact of Covid-19 on lower energy demand.
  • Gas distribution increased +4% YoY to 916 BBTUD, as domestic demand recovered further in 1Q2021 and the number of costumers increased with industries and commercial remaining the biggest gas consumers.
  • In April 2021, distribution volume decreased -7.56% MoM to 843 BBTUD with the start of the fasting month in Indonesia.
  • Gas transmission in 1Q2021 declined -10% on weaker consumption, while gas transmission volume in April increased +2.67% MoM to 1,235 MMSCFD.
  • The trend of industrial consumption has been on an upward trend starting in the  3Q2020 and we are expecting more growth in the coming quarters.

1Q2021 Results: Double digit growth
  • Despite lower revenue in 1Q2021, PGAS net profit increased by a double-digit +29% YoY to US$ 62 million. Higher net profit was driven by higher profits from joint ventures, lower operating expenses, and a forex gain.
  • PGAS recorded lower cost of revenue -9.4% YoY to US$ 532 million, lower gross profit -30% to US$ 201 million and a lower GPM of 27.5% from 32.8% in 1Q2021.
  • Operating expenses decreased -8.1% to US$ 105 million, so operating income declined -44% YoY to US$ 96 million. The operating profit margin also declined from 19.7% to 13.1%.
  • PGAS recorded a forex gain of US$ 8.9 from a loss in 1Q2020. Finance income and joint venture income significantly increased +129% to US$ 30.3 million.
  • We are expecting a positive net profit in 2021F of US$ 78.4 million after a loss in 2020.

Valuation:  BUY, with TP 1,465
  • We upgrading our recommendation to buy as we expect the upward trend to continue and as we are expecting a positive net profit in 2021F.
  • Our DCF valuation with WACC at 8.9%, gives a target price of IDR 1,465 or 30% upside which is a 26x PE valuation within one year.  
Read the full report

Previously

​PGAS Apr2021
​PGAS Dec2020
​PGAS Sep2020
​PGAS Apr2020
​PGAS Feb2020
​PGAS Oct2019
PGAS, Feb2019
​PGAS, JUL2018
​PGAS, Mar2018
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