PTPP
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66% upside. Buy
23rd September 2022
Price Rp990
Target price Rp1645
23rd September 2022
Price Rp990
Target price Rp1645
IDR 15.78 trillion new contracts
In 8M22, PTPP has booked total new contracts of IDR 15.78 trillion which is up 56% from 8M21’s IDR 10.12 trillion. New contracts in 8M22 based on business category are: Construction 65%, EPC 9%, Infra & Civil Work 49%, building 27%, Toll road & bridge 24%, subsidiaries 26%. Based on ownership, 8M22 new contracts come from SOEs 65%, Government 30%, and private 5%. To maximize the acquisition of new contracts in 2022, PTPP will focus on strategic projects owned by SOEs and the Government. PTPP is targeting the share of new contracts from SOEs at 49% and Government 44%. In 2022, PTPP has budgeted Capex of IDR 4.375 trillion, an increase of 37.19% from 2021. Top 3 new contracts up to August include Kalibaru port part 1B, IDR 3,837 billion, Pipe line Semarang Batang IDR 1,060 billion, KKT Kariangau- SP Tempadung toll road IDR 687 billion. During 8M22, PTPP has already spent IDR 1.89 trillion, mostly (64%) for subsidiaries, inline with the 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 of 17.9%.
Maintaining debt to equity at 1.43x
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 1.43x
Valuation: 66% upside
We maintain our target price within one year of IDR 1645/share or trading at 23x PER. With 66% upside, we maintain our recommendation, BUY.
In 8M22, PTPP has booked total new contracts of IDR 15.78 trillion which is up 56% from 8M21’s IDR 10.12 trillion. New contracts in 8M22 based on business category are: Construction 65%, EPC 9%, Infra & Civil Work 49%, building 27%, Toll road & bridge 24%, subsidiaries 26%. Based on ownership, 8M22 new contracts come from SOEs 65%, Government 30%, and private 5%. To maximize the acquisition of new contracts in 2022, PTPP will focus on strategic projects owned by SOEs and the Government. PTPP is targeting the share of new contracts from SOEs at 49% and Government 44%. In 2022, PTPP has budgeted Capex of IDR 4.375 trillion, an increase of 37.19% from 2021. Top 3 new contracts up to August include Kalibaru port part 1B, IDR 3,837 billion, Pipe line Semarang Batang IDR 1,060 billion, KKT Kariangau- SP Tempadung toll road IDR 687 billion. During 8M22, PTPP has already spent IDR 1.89 trillion, mostly (64%) for subsidiaries, inline with the 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 of 17.9%.
Maintaining debt to equity at 1.43x
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 1.43x
Valuation: 66% upside
We maintain our target price within one year of IDR 1645/share or trading at 23x PER. With 66% upside, we maintain our recommendation, BUY.
Previously