PTPP
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26% upside. BUY
22nd March 2021
Price Rp1610
Target price Rp2025
22nd March 2021
Price Rp1610
Target price Rp2025
Targetting 36% new contracts growth
In 2020, PTPP booked total new contracts of IDR 22,261 trillion which is 687% of their revised target of IDR.25,5 trillion. New contracts’ based on business are: Construction 53%, EPC 32%, and subsidiaries 15%. The top 5 Major new contracts in 2020 are Smelter Kolaka line 2,5,6 IDR 3,23 trillion, Data Centre Building IDR 2,4 trillion, RDMP Balikpapan (add) IDR 1,8 trillion, Bogor Apartment IDR 1,17 trillion, and SEZ Mandalika Infrastructure IDR 818 billion. In 2021F, PTPP is targeting new contracts of IDR 30,2 trillion or 35,7% YoY growth. Based on ownership, new contracts come from SOEs 59,56%, Government 36,30%, and private 4,14%. In 2021, PT PP has budgeted Capex of Rp 6.2 trillion or double 2020. Most of the capital expenditure will be used to finance toll road development projects, 37%, property and residential development projects, 9%, regional and airport development, 12%, and investment developments through subsidiaries, 33%. With most projects coming from secure and strong funding, we believe PTPP will see a revenue increase compared to last year. We are optimistic PTPP’s 2020 contract target is achievable since the company has historically been able to deliver on targets. We estimate revenue CAGR during 2021-2022 of 19%.
Targeting completion of two National strategic project by this year
PT PP (Persero) Tbk, targets the completion of the construction of 2 dams included in the National Strategic Project ("PSN") by this year. The two dam projects are: The “Way Sekampung” dam development project Package I & III located in Lampung and The” Pidekso” Dam in Central Java. The Way Sekampung Dam Development Project Package I has a contract value of IDR 923 billion. The 1st package has reached 100% progress as of March 2021. In addition to being trusted to work on Package I, PTPP continues to work on Package III. The project has achieved development progress of 54.64%. Meanwhile, “Pidekso” dam construction has a contract value of IDR 739 billion consisting of Phase I, IDR 436.9 billion and Advanced Contract, IDR 302.7 billion. For Pidekso Dam, the overall progress of the construction of the dam has reached 60.32%.
Valuation: 26% upside
We have upgraded our target price within one year to IDR.2025/share or trading at 16,42x PER. With 26% upside, we maintain our recommendation, BUY.
In 2020, PTPP booked total new contracts of IDR 22,261 trillion which is 687% of their revised target of IDR.25,5 trillion. New contracts’ based on business are: Construction 53%, EPC 32%, and subsidiaries 15%. The top 5 Major new contracts in 2020 are Smelter Kolaka line 2,5,6 IDR 3,23 trillion, Data Centre Building IDR 2,4 trillion, RDMP Balikpapan (add) IDR 1,8 trillion, Bogor Apartment IDR 1,17 trillion, and SEZ Mandalika Infrastructure IDR 818 billion. In 2021F, PTPP is targeting new contracts of IDR 30,2 trillion or 35,7% YoY growth. Based on ownership, new contracts come from SOEs 59,56%, Government 36,30%, and private 4,14%. In 2021, PT PP has budgeted Capex of Rp 6.2 trillion or double 2020. Most of the capital expenditure will be used to finance toll road development projects, 37%, property and residential development projects, 9%, regional and airport development, 12%, and investment developments through subsidiaries, 33%. With most projects coming from secure and strong funding, we believe PTPP will see a revenue increase compared to last year. We are optimistic PTPP’s 2020 contract target is achievable since the company has historically been able to deliver on targets. We estimate revenue CAGR during 2021-2022 of 19%.
Targeting completion of two National strategic project by this year
PT PP (Persero) Tbk, targets the completion of the construction of 2 dams included in the National Strategic Project ("PSN") by this year. The two dam projects are: The “Way Sekampung” dam development project Package I & III located in Lampung and The” Pidekso” Dam in Central Java. The Way Sekampung Dam Development Project Package I has a contract value of IDR 923 billion. The 1st package has reached 100% progress as of March 2021. In addition to being trusted to work on Package I, PTPP continues to work on Package III. The project has achieved development progress of 54.64%. Meanwhile, “Pidekso” dam construction has a contract value of IDR 739 billion consisting of Phase I, IDR 436.9 billion and Advanced Contract, IDR 302.7 billion. For Pidekso Dam, the overall progress of the construction of the dam has reached 60.32%.
Valuation: 26% upside
We have upgraded our target price within one year to IDR.2025/share or trading at 16,42x PER. With 26% upside, we maintain our recommendation, BUY.
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