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PGAS

Contact our analyst Eka
BUY
24th March 2022
Price Rp 1425
Target price Rp 2070
Upstream continue to grow
  • With higher crude oil and gas prices and increased demand, PGAS’ upstream business continued to grow in 2021. PGAS booked a revenue increase of +5.16% YoY to US$ 3.03 billion. The revenue achievement is in line with our estimate of US$ 3.04 billion.
  • For 4Q2021, PGAS booked slightly lower revenue -1% QoQ of US$ 782 million.
  • The Oil & gas business increased significantly +62.2% to US$ 331 million with a 10.9% total revenue contribution.
  • Gas trading and distribution had the highest contribution at 77.1% of total sales with 1.8% YoY growth to US$ 2.34 billion. Industrial gas consumption demand was strong. The gas distribution margin or spread in 2021 was higher at US$ 1.92/MMBTU compared to US$ 1.88/ MMBTU in 2020. QoQ the distribution margin also increased from US$ 1.64 / MMBTU in 3Q2021 to 2.21/MMBTU in 4Q2021.
  • As the demand for gas continues to recover with higher crude oil and gas prices, we are expecting a better 2022F with revenue reaching US$ 3.33 billion or 10% growth.

​Triple-digit Profit growth
  • PGAS booked triple-digit net profit growth in 2021 of 214.5% YoY to US$ 303.28 million from a net loss in 2020 of US$ 264.7 million. The growth came mainly  from higher revenue, a gain in forex, plus the reversal of provisions from tax disputes of US$ 27.4 million as well as a higher profit from joint ventures of more than US$ 90.3 million. The net profit margin increased to 10% from -9% in 2020.
  • PGAS also booked higher operating profit +38.4% YoY to US$ 420 million from a higher gross profit of US$586.9 million up +24.8% YoY with a higher GPM of 19% in 2021 from 16% in 2020.
  • We expect PGAS’s net profit in 2022F will reach US$ 349 million or +15% growth as we are expecting more reversals of tax provisions plus we expect the upstream segment to continue to grow.

Valuation:  BUY, with TP 2,070
  • We maintain our recommendation to buy as we expect the upward trend will continue. Our DCF valuation with WACC at 15.9%, gives a target price of IDR 2,070 or 45% upside which is a 9.2x PE valuation within one year.
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Previously

​PGAS Nov2021
​PGAS Oct2021
​PGAS Jun2021
​PGAS Apr2021
​PGAS Dec2020
​PGAS Sep2020
​PGAS Apr2020
​PGAS Feb2020
​PGAS Oct2019
PGAS, Feb2019
​PGAS, JUL2018
​PGAS, Mar2018
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