Equity Research

Company Update

Monday,08 May 2023

BUY Pakuwon Jati (PWON IJ)

Maintain Investment property as the backbone
Last price (IDR) 474 PWON booked core net profits of IDR439bn in 1Q23 (+8% y-o-y, -4% q-o-q), or
Target Price (IDR) 610 in-line with its revenues growth. PWON`s 1Q23 earnings are in-line with our
Upside/Downside +28.7% estimate but above the consensus. We maintain our BUY call on PWON with
Previous Target Price (IDR) 610 an unchanged TP of IDR610.

Stock Statistics Robust revenues in investment property. As the developer with the largest
Sector Property proportion of investment property, PWON booked robust revenues of
Bloomberg Ticker PWON IJ IDR1.1tn, or flat compared to the seasonally high 4Q22 figure and 29% higher
No of Shrs (mn) 48,160 compared to 1Q22’s figure. The gross profits margin exhibited a similar trend,
Mkt. Cap (IDRbn/USDmn) 22,828/1,556
as it was relatively flat q-o-q at c. 52% but up from 1Q22’s 46.8%. Rental
Avg. daily T/O (IDRbn/USDmn) 11.4/0.8
revenues and revenues from service charges were higher q-o-q and y-o-y. Only
the hotel business reported lower revenues q-o-q (from the seasonally high
Major shareholders (%) quarter near year-end) which led to flat q-o-q recurring revenues.
Pakuwon Arthaniaga 68.7 Slowdown in development property from high-rise property. PWON`s
Alexander Tedja 0.0 development property revenues were reportedly lower by 35% y-o-y and 27%
Estimated free float 31.3 q-o-q. This mainly reflects the impact from revenues recognition from high-rise
EPS Consensus (IDR)
property (apartments and offices) which declined 58% y-o-y and 44% q-o-q as
the marketing sales of high-rise property were relatively muted in the past few
2023F 2024F 2025F
years. Fortunately, the revenues recognition from landed residential property
Danareksa 44.6 45.2 53.0
was able to slightly offset the decline in high-rise property with increases of
Consensus 39.1 41.4 48.2 72% y-o-y and 14% q-o-q.
Danareksa/Cons 14.0 9.1 10.1
The balance sheet remains strong. PWON remained in a net cash position in
PWON relative to JCI Index 1Q23 thanks to the robust recovery of its investment property business and
also partly driven by the shifting market demand from high-rise property to
landed residential property.
Relatively weak 1Q23 marketing sales. PWON booked marketing sales of
IDR300bn in 1Q23 (-22% y-o-y, -10% q-o-q) forming 19% and 21% of the
company’s FY23 target and our estimate. Albeit higher q-o-q and y-o-y, condo
sales remained weak at c. IDR150bn, forming half of the total sales of the
quarter.
Maintain BUY with an unchanged TP of IDR610. We maintain our forecast,
RNAV, and valuation which stands at the 5-year average discount to RNAV of
56%. We still like PWON as the main beneficiary of the recovery in the
investment property business and because it is less impacted by the slowdown
Source : Bloomberg
in property sales as it has the highest portion of investment property in its
portfolio.
Key Financials
Year to 31 Dec 2021A 2022A 2023F 2024F 2025F
Revenue (IDRbn) 5,713 5,987 6,556 6,671 7,518
EBITDA (IDRbn) 2,851 3,266 3,711 3,761 4,235
EBITDA Growth (%) 39.0 14.5 13.6 1.3 12.6
Net profit (IDRbn) 1,396 1,543 2,148 2,177 2,554
EPS (IDR) 29.0 32.0 44.6 45.2 53.0
x Victor Stefano EPS growth (%) 37.5 10.5 39.2 1.4 17.3
(62-21) 5091 4100 ext. 3503 BVPS (IDR) 333.2 359.4 399.5 438.5 485.3
DPS (IDR) 0.0 4.0 4.5 6.2 6.3
victor.stefano@brids.co.id
PER (x) 16.4 14.8 10.6 10.5 8.9
PBV (x) 1.4 1.3 1.2 1.1 1.0
Dividend yield (%) 0.0 0.8 0.9 1.3 1.3
EV/EBITDA (x) 7.7 6.6 5.3 4.8 3.7
bridanareksasekuritas.co.id See important disclosure at the back of this report 1
Source : PWON, Danareksa Estimates
 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. PWON 1Q23 Results Summary

PWON (IDR bn) 1Q22 4Q22 1Q23 y-o-y q-o-q 3M22 3M23 y-o-y FY23F FY23C A/F A/C
Revenue 1,307 1,492 1,385 6% -7% 1,307 1,385 6% 6,556 6,075 21% 23%
COGS (629) (637) (637) 1% 0% (629) (637) 1% (2,877) (2,858) 22% 22%
Gros s Profi t 678 855 747 10% -13% 678 747 10% 3,679 3,216 20% 23%
Tota l Opex (112) (196) (145) 29% -26% (112) (145) 29% (656) (589) 22% 25%
Opera ti ng Profi t 566 659 602 6% -9% 566 602 6% 3,023 2,628 20% 23%
Preta x Profi t 487 531 752 54% 42% 487 752 54% 2,957 2,485 25% 30%
Net Profi t 371 347 595 61% 71% 371 595 61% 2,148 1,773 28% 34%
Core profi t 405 458 439 8% -4% 405 439 8% 2,105 21%

Gros s ma rgi n 51.9% 57.3% 54.0% 2.1% -3.3% 51.9% 54.0% 2.1% 56.1% 52.9%
Opera ti ng ma rgi n 43.3% 44.2% 43.5% 0.2% -0.7% 43.3% 43.5% 0.2% 46.1% 43.3%
Net ma rgi n 28.4% 23.3% 43.0% 14.7% 19.7% 28.4% 43.0% 14.7% 32.8% 29.2%
Source: Company, Bloomberg, Danareksa Sekuritas estimates

bridanareksasekuritas.co.id See important disclosure at the back of this report 2

 Exhibit 6. Discount to RNAV Band Chart Exhibit 7. P/E Band Chart

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

bridanareksasekuritas.co.id See important disclosure at the back of this report 3

 Exhibit 8. Income Statement
Year to 31 Dec (IDRbn) 2021A 2022A 2023F 2024F 2025F
Revenue 5,713 5,987 6,556 6,671 7,518
COGS (2,949) (2,769) (2,877) (2,939) (3,302)
Gross profit 2,764 3,219 3,679 3,732 4,216
EBITDA 2,851 3,266 3,711 3,761 4,235
Oper. profit 2,270 2,602 3,023 3,041 3,483
Interest income 137 187 246 305 372
Interest expense (339) (335) (354) (365) (376)
Forex Gain/(Loss) (38) (395) (84) (86) (96)
Income From Assoc. Co’s 8 0 0 0 0
Other Income (Expenses) (171) 123 127 130 134
Pre-tax profit 1,866 2,183 2,957 3,026 3,517
Income tax (303) (347) (470) (505) (558)
Minority interest (168) (292) (339) (343) (405)
Net profit 1,396 1,543 2,148 2,177 2,554
Core Net Profit 1,434 1,938 2,232 2,263 2,651

Exhibit 9. Balance Sheet

Year to 31 Dec (IDRbn) 2021A 2022A 2023F 2024F 2025F
Cash & cash equivalent 6,444 7,444 9,521 11,507 14,166
Receivables 252 229 250 255 287
Inventory 3,981 3,779 3,779 3,779 3,779
Other Curr. Asset 373 392 435 444 499
Fixed assets - Net 2,381 2,327 2,497 2,649 2,783
Other non-curr.asset 15,032 16,022 16,051 16,066 16,069
Total asset 28,866 30,602 33,024 35,289 38,291

ST Debt 50 4 4 4 4
Payables 346 342 356 363 408
Other Curr. Liabilities 1,018 1,303 1,375 1,409 1,579
Long Term Debt 5,657 6,273 6,448 6,641 6,839
Other LT. Liabilities 2,617 1,961 2,189 2,342 2,680
Total Liabilities 9,688 9,884 10,372 10,759 11,510
Shareholder'sFunds 16,047 17,308 19,241 21,119 23,370
Minority interests 3,132 3,411 3,411 3,411 3,411
Total Equity & Liabilities 28,866 30,602 33,024 35,289 38,291

bridanareksasekuritas.co.id See important disclosure at the back of this report 4

 Exhibit 10. Cash Flow
Year to 31 Dec (IDRbn) 2021A 2022A 2023F 2024F 2025F
Net income 1,396 1,543 2,148 2,177 2,554
Depreciation and Amort. 640 649 688 720 752
Change in Working Capital 448 474 21 28 127
OtherOper. Cash Flow (427) (529) 312 187 312
Operating Cash Flow 2,057 2,137 3,169 3,112 3,745

Capex (259) (534) (886) (887) (888)

Others Inv. Cash Flow 259 (919) 163 206 253
Investing Cash Flow 0 (1,452) (722) (681) (635)

Net change in debt 1,763 542 175 193 198

New Capital 0 0 0 0 0
Dividend payment 0 (193) (214) (299) (303)
Other Fin. Cash Flow (187) (92) (331) (339) (347)
Financing Cash Flow 1,576 257 (370) (445) (452)

Net Change in Cash 3,633 942 2,077 1,985 2,659

Cash - begin of the year 2,887 6,444 7,444 9,521 11,507
Cash - end of the year 6,444 7,444 9,521 11,507 14,166

Exhibit 11. Key Ratios

Year to 31 Dec 2021A 2022A 2023F 2024F 2025F
Growth (%)
Sales 43.7 4.8 9.5 1.8 12.7
EBITDA 39.0 14.5 13.6 1.3 12.6
Operating profit 51.3 14.6 16.2 0.6 14.5
Net profit 37.5 10.5 39.2 1.4 17.3
Profitability (%)
Gross margin 48.4 53.8 56.1 55.9 56.1
EBITDA margin 49.9 54.5 56.6 56.4 56.3
Operating margin 39.7 43.5 46.1 45.6 46.3
Net margin 24.4 25.8 32.8 32.6 34.0
ROAA 5.0 5.2 6.8 6.4 6.9
ROAE 9.1 9.3 11.8 10.8 11.5
Leverage
Net Gearing (x) 0.0 (0.1) (0.1) (0.2) (0.3)
Interest Coverage (x) 6.7 7.8 8.5 8.3 9.3

Source : PWON, Danareksa Estimates

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bridanareksasekuritas.co.id See important disclosure at the back of this report 6