WEGE
Contact our analyst Eka
Unrated
27 December 2024
Current price Rp63
Current price Rp63
New contracts in 11M24, 100% from external projects
3Q2024 Result: Triple-digit Bottom-Line Growth
Site Visit: ITB Innovation Park Project
Three Million Houses Project
- As of November 2024, WEGE secured IDR 2.1 trillion in new contracts, an additional IDR 230 billion compared to 9M2024’s IDR 1.87 trillion. This represents 42% of its 2024 target of IDR 5 trillion.
- The majority of the new contracts are government-related, accounting for 58.6% of the total. Notably, 100% of these contracts are external projects, emphasizing WEGE’s independence from the WIKA Group.
- In terms of project types, office projects lead with a 40.42% share, driven by contracts such as the BMKG building and banking offices. Public facilities contribute 31.40%, while residential projects account for 28.18%.
- While achieving the 2024 new contract target may be challenging due to shifts in project timelines, WEGE remains optimistic about securing an additional IDR 977 billion in December 2024. For 2025, WEGE is targeting new contracts worth IDR 3.5 trillion.
3Q2024 Result: Triple-digit Bottom-Line Growth
- As of 9M2024, WEGE’s revenue declined by 12.3% YoY to IDR 2.26 trillion, with a 7.55% YoY decrease in 3Q2024. Despite the revenue decline, WEGE recorded significant bottom-line growth of +119% YoY to IDR 47.1 billion in 9M2024. For 3Q2024, the net profit surged +101% YoY and +631% QoQ, reaching IDR 28.5 billion.
- This growth was primarily driven by a reduction in COGS (-7.58% YoY and -3.95% QoQ in 3Q2024), leading to a higher gross profit margin (GPM) of 8.39%. The improved GPM reflects the adoption of cost-efficient technologies.
Site Visit: ITB Innovation Park Project
- In November we visited WEGE’s completed ITB Innovation Park Project in Gedebage, Bandung. This IDR 426.8 billion project, commissioned by the Ministry of Education, Culture, Research, and Technology in collaboration with the Bandung Institute of Technology (ITB), positions WEGE as the main contractor.
- WEGE’s responsibilities included structural, architectural, landscape, and MEP (mechanical, electrical, plumbing) work for two high-rise buildings.
Three Million Houses Project
- As Indonesia launches its Three Million Houses per Year initiative in 2025, WEGE is proposing the use of modular construction—a method it specializes in. This project aims to develop vertical housing (flats) and landed houses, with 1,000 units in urban areas and 2,000 in rural regions.
- Modular construction can reduce project execution time by up to 50%. Although initially more expensive than traditional methods, mass production of modular units is expected to lower costs while ensuring superior quality. This initiative is anticipated to revive Indonesia’s property and construction sectors.
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