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PGAS

Contact our analyst Eka
BUY
6th October 2021
Price Rp 1480
Target price Rp 1960
Expecting higher volume
  • In 2Q2021, PGAS revenue increased +23% YoY to US$ 731.4 million, driven primarily by a higher contribution from gas distribution which increased +15.7% YoY to US$ 569.5 million and higher net oil and gas sales.
  • For 1H2021 revenue was slightly lower -0.30% YoY at US$ 1.46 billion.
  • Commercial sales increased +21.3% MoM in June to 916 BBTUD, as domestic demand recovered further in 2Q2021 and the number of costumers increased.
  • 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.

Unexpected Income
  • PGAS booked net profit of US$ 135 million in 2Q2021 after a loss in 2Q2020 of US$ 41.2 million. Higher net profit was driven by higher profit from joint ventures of US$ 50.5 million up 121% YoY and unexpected other income from a reversal of provisions for tax disputes of US$ 48.3 million.
  • For 1H2021, PGAS net profit soared 2,883% YoY to US$ 197 million. As of 1H2021, PGAS has won a total of four cases against the tax office with a value of US$ 65.2 million. PGAS had allocated US$ 278 million of provisions for 24 tax cases in 2020.

2Q2021 Margin Increased
  • Because of a higher net profit in 2Q2021, the net profit margin jumped to 18.4% from negative in 2Q2020 and 8.40% in 1Q2021.
  • PGAS recorded higher cost of revenue +15% YoY to US$ 482.6 million, which resulted in a higher gross profit by 34% to US$ 201 million and a higher GPM of 34% in 2Q2021 from 27.5% in 1Q2021.
  • Operating expenses decreased -13% to US$ 134 million, so operating income increased +453% YoY to US$ 115 million. The operating profit margin also increased  from 3.5% to 15.7%.
  • We are expecting a positive net profit in 2021F of US$ 375.4 million after a loss in 2020 as we are expecting more reversals of provisions for tax disputes in 2021.

Valuation:  BUY, with TP 1,960
  • We maintain 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 14.4%, gives a target price of IDR 1,960 or 31% upside which is a 9x PE valuation within one year.
Read the full report

Previously

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