PTPP
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82% upside. Buy
14th June 2022
Price Rp905
Target price Rp1645
14th June 2022
Price Rp905
Target price Rp1645
4M22 new contracts IDR 5 trillion
In 4M22, PTPP has booked total new contracts of IDR 5 trillion which is up 29.4% from 4M21 new contracts of IDR 3.87 trillion. New contracts in 4M22 based on business category are: Construction 39%, EPC 21%, overseas 0% and subsidiaries 40%. Based on ownership, 4M22 new contracts come from SOEs 52%, Government 47%, and private 1%. To maximize the acquisition of new contracts in 2022, PTPP will focus on strategic projects owned by SOEs and Government. PTPP is targeting the share of new contracts from SOEs at 49% and Government 44%. In 2022, PT PP has budgeted Capex of IDR 4.375 trillion, an increase of 37.19% from 2021. During 4M22, PTPP has already spent IDR 1.39 trillion, mostly for subsidiaries, inline with their plan to use most of this year’s capital expenditure for subsidiaries’ projects. We maintain our more conservative target for PTPP’s 2022 new contracts but believe that revenue will be higher than last year supported by carry over contracts as well as the increase in new contracts. We maintain our CAGR revenue growth during 2021A – 2023F at 17.9%.
Maintaining debt to equity at 1.45x
In 2021, PTPP debt / equity ratio was 1.20X Most of the new debt came from short term and long term bank loans and credit facilities for PTPP and its subsidiaries. We estimate PTPP interest bearing debt / equity for 2022-2023 will be maintained at an average of 1.45x
Valuation: significant upside
We maintain our target price within one year at IDR 1645/share or trading at 23x PER. With 82% upside, we maintain our recommendation, BUY.
In 4M22, PTPP has booked total new contracts of IDR 5 trillion which is up 29.4% from 4M21 new contracts of IDR 3.87 trillion. New contracts in 4M22 based on business category are: Construction 39%, EPC 21%, overseas 0% and subsidiaries 40%. Based on ownership, 4M22 new contracts come from SOEs 52%, Government 47%, and private 1%. To maximize the acquisition of new contracts in 2022, PTPP will focus on strategic projects owned by SOEs and Government. PTPP is targeting the share of new contracts from SOEs at 49% and Government 44%. In 2022, PT PP has budgeted Capex of IDR 4.375 trillion, an increase of 37.19% from 2021. During 4M22, PTPP has already spent IDR 1.39 trillion, mostly for subsidiaries, inline with their plan to use most of this year’s capital expenditure for subsidiaries’ projects. We maintain our more conservative target for PTPP’s 2022 new contracts but believe that revenue will be higher than last year supported by carry over contracts as well as the increase in new contracts. We maintain our CAGR revenue growth during 2021A – 2023F at 17.9%.
Maintaining debt to equity at 1.45x
In 2021, PTPP debt / equity ratio was 1.20X Most of the new debt came from short term and long term bank loans and credit facilities for PTPP and its subsidiaries. We estimate PTPP interest bearing debt / equity for 2022-2023 will be maintained at an average of 1.45x
Valuation: significant upside
We maintain our target price within one year at IDR 1645/share or trading at 23x PER. With 82% upside, we maintain our recommendation, BUY.
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