PTPP
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+78% upside. Buy
24th July 2023
Price Rp635
Target price Rp1130
24th July 2023
Price Rp635
Target price Rp1130
1H23 new contracts increase +6% YoY
In 1H23, PTPP experienced a positive growth in new contracts, amounting to IDR 11.62 trillion. This is a 6.3% increase compared to the new contracts secured in 1H22, which were valued at IDR 10.93 trillion. These contracts were 45% from government projects, 28% from state-owned (SOE) projects, and 27% from the private sector. Notably, for IKN projects, PTPP obtained contracts worth IDR 4.15 trillion as of June 2023, showing significant growth of +180% compared to the third quarter of 2022 (3Q22). PTPP targets to achieve new contracts of IDR 34.5 trillion this year, representing an 11.4% YoY increase, with a focus on government and SOE projects. Over the next two years, we estimate an average CAGR of +11% in new contracts.
Profit growth of 21%
In 1Q23, PTPP saw a promising +21% growth in its bottom line profit. The operating revenue for 1Q23 reached IDR 4.36 trillion, up +1.86% YoY from IDR 4.28 trillion in 1Q22. Most of the revenue, 60%, was contributed by PTPP as the parent company, while the remaining 40% came from subsidiaries, with PPRE contributing 16% and PPSD contributing 12%. PTPP's net profit during 1Q23 stood at IDR 34.2 trillion, a substantial increase of +21% YoY compared to the IDR 28.2 trillion achieved in 1Q22.
Maintaining debt to equity of 1.18x
As of 1Q23, PTPP obtained new debt facility through short-term and long-term bank loans and credit facilities for the company and its subsidiaries. However , we expect the total interest-bearing debt to equity ratio to remain steady at an average of 1.18x for 2022-2023.
Targeted 1.4 trillion of asset divestment
As part of its financial strategy, PTPP plans to divest assets worth IDR 1.4 trillion in 2023. This includes releasing shares in affiliated companies and subsidiaries, as well as divesting less productive heavy equipment through its subsidiaries with a total IDR 1.4 trillion. In June 2023, PTPP divested 20% of its ownership of PT Sinergi Properti.
Valuation: 78% upside
Considering the company's potential, we maintain our target price of IDR 1,130/share within one year, which means trading at 18x PER, indicating an upside of 78%. As such, we maintain our recommendation to BUY PTPP shares.
In 1H23, PTPP experienced a positive growth in new contracts, amounting to IDR 11.62 trillion. This is a 6.3% increase compared to the new contracts secured in 1H22, which were valued at IDR 10.93 trillion. These contracts were 45% from government projects, 28% from state-owned (SOE) projects, and 27% from the private sector. Notably, for IKN projects, PTPP obtained contracts worth IDR 4.15 trillion as of June 2023, showing significant growth of +180% compared to the third quarter of 2022 (3Q22). PTPP targets to achieve new contracts of IDR 34.5 trillion this year, representing an 11.4% YoY increase, with a focus on government and SOE projects. Over the next two years, we estimate an average CAGR of +11% in new contracts.
Profit growth of 21%
In 1Q23, PTPP saw a promising +21% growth in its bottom line profit. The operating revenue for 1Q23 reached IDR 4.36 trillion, up +1.86% YoY from IDR 4.28 trillion in 1Q22. Most of the revenue, 60%, was contributed by PTPP as the parent company, while the remaining 40% came from subsidiaries, with PPRE contributing 16% and PPSD contributing 12%. PTPP's net profit during 1Q23 stood at IDR 34.2 trillion, a substantial increase of +21% YoY compared to the IDR 28.2 trillion achieved in 1Q22.
Maintaining debt to equity of 1.18x
As of 1Q23, PTPP obtained new debt facility through short-term and long-term bank loans and credit facilities for the company and its subsidiaries. However , we expect the total interest-bearing debt to equity ratio to remain steady at an average of 1.18x for 2022-2023.
Targeted 1.4 trillion of asset divestment
As part of its financial strategy, PTPP plans to divest assets worth IDR 1.4 trillion in 2023. This includes releasing shares in affiliated companies and subsidiaries, as well as divesting less productive heavy equipment through its subsidiaries with a total IDR 1.4 trillion. In June 2023, PTPP divested 20% of its ownership of PT Sinergi Properti.
Valuation: 78% upside
Considering the company's potential, we maintain our target price of IDR 1,130/share within one year, which means trading at 18x PER, indicating an upside of 78%. As such, we maintain our recommendation to BUY PTPP shares.
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