Equity Research

Company Update

Wednesday,02 November 2022

BUY Ciputra Development (CTRA IJ)

Maintain Decent quarterly performance despite lower margin
Last price (IDR) 930 CTRA booked core net profits of IDR661bn in 3Q22 (-8% y-o-y, -8% q-o-q)
Target Price (IDR) 1,650 resulting in 9M22 core net profits of IDR1.8tn (+33% y-o-y). Despite the inline
Upside/Downside +77.4% pre-tax profits, CTRA`s 9M22 net profits are 87% of our FY22F estimate and
Previous Target Price (IDR) 1,650 the consensus i.e., above, reflecting lower minority interests. We maintain
our BUY call on CTRA given its cheap valuation.
Stock Statistics
Sector Property Higher landed residential sales, offset by lower office sales. CTRA reported 3Q22
Bloomberg Ticker CTRA IJ revenues of IDR2.6tn (-3% y-o-y, +5% q-o-q). The decline in y-o-y revenues reflects
No of Shrs (mn) 15,425
lower office sales (-75%) and lower hospital revenues (-15%) due to the high base
amid the large number of covid-19 cases last year. Overall recurring revenues
Mkt. Cap (IDRbn/USDmn) 14,346/918
improved 29% y-o-y and 10% q-o-q due to the recovery of the shopping mall and
Avg. daily T/O (IDRbn/USDmn) 22.9/1.5
hotel business which, we believe, owed to higher occupancy rates. Revenues from
Major shareholders (%)
landed residential (including shophouses) remained robust in 3Q22 (+2% y-o-y and
+8% q-o-q).
PT Sang Pelopor 30.6
Credit Suisse AG, Singapore 7.9
Lower margins during the quarter. The gross profit margin from office sales
Estimated free float 46.5 dropped to 39% in 3Q22 (3Q21: 67%, 2Q22: 58%) while landed residential saw a
EPS Consensus (IDR) slight margin decline to 51% in 3Q22 (3Q21: 52%, 2Q22: 55%) which resulted in a
2022F 2023F 2024F
lower development property margin. Supported by a steady q-o-q recurring
revenues GPM at 45% (higher than 3Q21’s 41%), the overall operating margin
Danareksa 106.1 88.4 103.6
declined to 31.0% in 3Q22 from 35.0% in 3Q21 and 34.7% in 2Q22.
Consensus 90.6 96.2 105.4
Danareksa/Cons 17.2 (8.2) (1.8) In line from the top line to pre-tax, missing our bottom line estimate due to higher
CTRA relative to JCI Index minority interests. CTRA’s 9M22 top line reached IDR7.2tn (+9% y-o-y) or 72% of
our estimate and 80% of the consensus. CTRA reported 9M22 pretax profits of
IDR1.9tn (+28% y-o-y) reaching 75% of our FY22F estimate and 83% of the
consensus. Net profits, however, came in at 87% of our FY22 estimate due to lower-
than-expected minority interests. We tweak our minority interests number and
arrive at estimated net profits of IDR2tn and core net profits of IDR2.5tn from
IDR1.8tn and IDR2.3tn, respectively.

Maintain BUY with a TP of IDR 1,650. We maintain our BUY call on the stock
with an unchanged TP of IDR1,650 as we maintain our valuation at a 5-year
average at a 49% discount to RNAV, which is at its mean 5-year average. We
like CTRA given its strong marketing sales from its flagship projects in Jakarta,
Surabaya, and Medan.
Source : Bloomberg
Key Financials
Year to 31 Dec 2020A 2021A 2022F 2023F 2024F
Revenue (IDRbn) 8,071 9,730 10,102 9,220 10,109
EBITDA (IDRbn) 2,868 3,438 3,500 3,146 3,519
EBITDA Growth (%) 17.4 19.9 1.8 (10.1) 11.8
Net profit (IDRbn) 1,321 1,735 1,970 1,640 1,922
EPS (IDR) 71.2 93.5 106.1 88.4 103.6
EPS growth (%) 14.1 31.4 13.5 (16.7) 17.2
BVPS (IDR) 826.1 914.3 1,006.5 1,078.9 1,169.3
DPS (IDR) 8.0 8.0 14.0 15.9 13.2
x Victor Stefano PER (x) 13.1 9.9 8.8 10.5 9.0
(62-21) 5091 4100 ext. PBV (x) 1.1 1.0 0.9 0.9 0.8
victor.stefano@brids.co.id Dividend yield (%) 0.9 0.9 1.5 1.7 1.4
EV/EBITDA (x) 7.7 5.7 4.9 5.5 4.2
Source : CTRA, Danareksa Estimates

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 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth

Source: Company, BRI Danareksa Sekuritas estimates Source: Company, BRI Danareksa Sekuritas estimates

Exhibit 3. Margins Exhibit 4. Gearing Level

Source: Company, BRI Danareksa Sekuritas estimates Source: Company, BRI Danareksa Sekuritas estimates

Exhibit 5. CTRA 3Q22 results summary

CTRA (IDR bn) 3Q21 2Q22 3Q22 y-o-y q-o-q 9M21 9M22 y-o-y FY22F FY22C A/F A/C
Revenue 2,628 2,431 2,562 -3% 5% 6,649 7,227 9% 10,102 9,060 72% 80%
COGS (1,291) (1,153) (1,307) 1% 13% (3,351) (3,603) 8% (5,129) (4,542) 70% 79%
Gros s Profi t 1,337 1,278 1,255 -6% -2% 3,298 3,624 10% 4,973 4,518 73% 80%
Tota l Opex (417) (435) (461) 11% 6% (1,147) (1,265) 10% (1,620) (1,661) 78% 76%
Opera ti ng Profi t 920 843 794 -14% -6% 2,151 2,359 10% 3,353 2,857 70% 83%
Preta x Profi t 699 699 631 -10% -10% 1,467 1,872 28% 2,502 2,264 75% 83%
Net Profi t 531 584 520 -2% -11% 1,015 1,525 50% 1,759 1,743 87% 87%
Core Net Profi t 662 665 611 -8% -8% 1,363 1,809 33% 2,260 80%

Gros s ma rgi n 50.9% 52.6% 49.0% -1.9% -3.6% 49.6% 50.1% 0.5% 49.2% 49.9%
Opera ti ng ma rgi n 35.0% 34.7% 31.0% -4.0% -3.7% 32.3% 32.6% 0.3% 33.2% 31.5%
Net ma rgi n 20.2% 24.0% 20.3% 0.1% -3.7% 15.3% 21.1% 5.8% 17.4% 19.2%
Source: Company, BRI Danareksa Sekuritas estimates

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 Exhibit 6. Income Statement
Year to 31 Dec (IDRbn) 2020A 2021A 2022F 2023F 2024F
Revenue 8,071 9,730 10,102 9,220 10,109
COGS (3,949) (4,890) (5,129) (4,603) (5,049)
Gross profit 4,121 4,840 4,973 4,617 5,060
EBITDA 2,868 3,438 3,500 3,146 3,519
Oper. profit 2,599 3,292 3,353 2,996 3,366
Interest income 250 238 223 163 178
Interest expense (778) (773) (649) (605) (589)
Forex Gain/(Loss) 0 0 0 0 0
Income From Assoc. Co’s (4) 41 7 6 7
Other Income (Expenses) 49 67 70 73 77
Pre-tax profit 2,116 2,865 3,003 2,633 3,038
Income tax (288) (309) (321) (293) (321)
Minority interest (50) (352) (211) (178) (207)
Net profit 1,321 1,735 1,970 1,640 1,922
Core Net Profit 1,778 2,204 2,471 2,162 2,511

Exhibit 7. Balance Sheet

Year to 31 Dec (IDRbn) 2020A 2021A 2022F 2023F 2024F
Cash & cash equivalent 5,276 7,162 8,520 8,391 10,676
Receivables 937 867 937 855 937
Inventory 12,240 11,578 10,652 10,252 9,469
Other Curr. Asset 1,830 2,288 2,517 2,769 3,046
Fixed assets - Net 8,118 8,032 8,089 8,154 8,223
Other non-curr.asset 10,854 10,742 11,347 11,983 12,652
Total asset 39,255 40,668 42,061 42,403 45,004

ST Debt 3,152 1,352 522 515 509

Payables 876 939 952 854 937
Other Curr. Liabilities 10,594 10,510 10,992 10,135 10,997
Long Term Debt 6,872 8,203 8,011 7,790 7,570
Other LT. Liabilities 304 270 270 270 270
Total Liabilities 21,798 21,274 20,746 19,565 20,283
Shareholder'sFunds 15,332 16,971 18,680 20,025 21,702
Minority interests 2,125 2,424 2,635 2,813 3,020
Total Equity & Liabilities 39,255 40,668 42,061 42,403 45,004

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 Exhibit 8. Cash Flow
Year to 31 Dec (IDRbn) 2020A 2021A 2022F 2023F 2024F
Net income 1,321 1,735 1,970 1,640 1,922
Depreciation and Amort. 269 146 147 150 153
Change in Working Capital 1,461 254 1,122 (724) 1,368
OtherOper. Cash Flow 190 (127) (105) (29) (117)
Operating Cash Flow 3,241 2,009 3,133 1,037 3,326

Capex (761) (186) (504) (515) (522)

Others Inv. Cash Flow (509) 741 129 5 15
Investing Cash Flow (1,271) 554 (376) (510) (507)

Net change in debt 848 (469) (1,022) (227) (227)

New Capital 0 0 0 0 0
Dividend payment (148) (148) (260) (295) (246)
Other Fin. Cash Flow (788) (712) (649) (605) (589)
Financing Cash Flow (88) (1,329) (1,931) (1,127) (1,061)

Net Change in Cash 1,882 1,234 827 (600) 1,758

Cash - begin of the year 4,238 5,276 7,162 8,520 8,391
Cash - end of the year 5,276 7,162 8,520 8,391 10,676

Exhibit 9. Key Ratios

Year to 31 Dec 2020A 2021A 2022F 2023F 2024F
Growth (%)
Sales 6.1 20.6 3.8 (8.7) 9.6
EBITDA 17.4 19.9 1.8 (10.1) 11.8
Operating profit 20.6 26.7 1.9 (10.6) 12.3
Net profit 14.1 31.4 13.5 (16.7) 17.2
Profitability (%)
Gross margin 51.1 49.7 49.2 50.1 50.1
EBITDA margin 35.5 35.3 34.6 34.1 34.8
Operating margin 32.2 33.8 33.2 32.5 33.3
Net margin 16.4 17.8 19.5 17.8 19.0
ROAA 3.5 4.3 4.8 3.9 4.4
ROAE 8.6 10.7 11.0 8.5 9.2
Leverage
Net Gearing (x) 0.3 0.1 0.0 0.0 (0.1)
Interest Coverage (x) 3.3 4.3 5.2 5.0 5.7

Source : CTRA, Danareksa Estimates

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