PTPP
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+76% upside. Buy
4 December 2023
Price Rp570
Target price Rp1005
4 December 2023
Price Rp570
Target price Rp1005
10M23 new contracts 85% target
In 10M23, PTPP booked new contracts amounting to IDR 29.31 trillion, reaching 85% of the total initial target of IDR 34.5 trillion. These contracts consisted of 42.47% from government projects, 33% from state-owned (SOE) projects, and 25% from the private sector. Notably, for IKN projects, PTPP obtained contracts worth IDR 5.68 trillion as of 10M23. Achievements in new projects for October 2023 include the Construction of IKN Airport (Airstrip Side) worth IDR 2.28 trillion, the Construction of BNI Building in PIK 2 Area worth IDR 1.29 trillion, Patimban Access Package 1 Toll Road worth IDR 1.01 billion, and the Construction of Bank Indonesia IKN Phase 1 Office Complex worth IDR 942 billion. PTPP targets 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 maintain our estimation of an average CAGR of +11% in new contracts.
Net profit grew 130% QoQ in 3Q23
In 9M23, PTPP posted a net profit of IDR 239 billion, up 70% YoY or 130% QoQ in 3Q23. Operating revenue for 3Q23 reached IDR 4.18 trillion, up +13% QoQ from IDR 3.7 trillion in 2Q23. Most of the revenue, 59%, was contributed by PTPP as the parent company, while the remaining 29% came from subsidiaries, with PPRE contributing 23%, PPUB 7%, PPRO 6%, PPSD contributing 2%, and others 3%. The increase in bottom-line net profit is supported by a lower -6% YoY finance cost and a 49% YoY increase in share in the profit of joint ventures. We estimate a CAGR within 2023-2024 of net profit for PTPP to average 29% compared to 2022A.
Targetting debt to equity of 1.3x
Based on 9M23, PTPP obtained new debt facilities 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 average 1.3x for 2023-2024.
Valuation: 76% upside
Based on 9M23 results, we maintain our target price of IDR 1,005/share within one year, indicating an upside of 76% to trade at 13.7x PER. As such, we maintain our recommendation to BUY PTPP shares.
In 10M23, PTPP booked new contracts amounting to IDR 29.31 trillion, reaching 85% of the total initial target of IDR 34.5 trillion. These contracts consisted of 42.47% from government projects, 33% from state-owned (SOE) projects, and 25% from the private sector. Notably, for IKN projects, PTPP obtained contracts worth IDR 5.68 trillion as of 10M23. Achievements in new projects for October 2023 include the Construction of IKN Airport (Airstrip Side) worth IDR 2.28 trillion, the Construction of BNI Building in PIK 2 Area worth IDR 1.29 trillion, Patimban Access Package 1 Toll Road worth IDR 1.01 billion, and the Construction of Bank Indonesia IKN Phase 1 Office Complex worth IDR 942 billion. PTPP targets 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 maintain our estimation of an average CAGR of +11% in new contracts.
Net profit grew 130% QoQ in 3Q23
In 9M23, PTPP posted a net profit of IDR 239 billion, up 70% YoY or 130% QoQ in 3Q23. Operating revenue for 3Q23 reached IDR 4.18 trillion, up +13% QoQ from IDR 3.7 trillion in 2Q23. Most of the revenue, 59%, was contributed by PTPP as the parent company, while the remaining 29% came from subsidiaries, with PPRE contributing 23%, PPUB 7%, PPRO 6%, PPSD contributing 2%, and others 3%. The increase in bottom-line net profit is supported by a lower -6% YoY finance cost and a 49% YoY increase in share in the profit of joint ventures. We estimate a CAGR within 2023-2024 of net profit for PTPP to average 29% compared to 2022A.
Targetting debt to equity of 1.3x
Based on 9M23, PTPP obtained new debt facilities 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 average 1.3x for 2023-2024.
Valuation: 76% upside
Based on 9M23 results, we maintain our target price of IDR 1,005/share within one year, indicating an upside of 76% to trade at 13.7x PER. As such, we maintain our recommendation to BUY PTPP shares.
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