Company Report | Oct 5, 2018
Ciputra Development Tbk | Summary (IDR bn)
2017 2018E 2019F 2020F
Revenues 6,443 7,536 6,592 6,919
Revenues growth -4.4% 17.0% -12.5% 5.0%
EBITDA 1,725 2,550 2,146 2,303 revenue are 3 projects whose constructions are virtually at the final stages and revenue of past-few-year projects recognized in 2H18.
We estimate that the positive sentiments successfully cushioned 2Q18 lackluster financial performance. Its revenue and net profit declined by 7.0% y-y to IDR1.45 trillion and 58.6% y-y to IDR51 billion, respectively. The hike in COGS and financial cost weighed bottom line margin.
Another to lackluster financial performance, ahead of the political year, property consumers seem to be more prudent to spend large amounts of funds, but CTRA’s consumers mostly end-user make it resilient to bear the risk.
1H18 RosierMarketing Sales
CTRA is still capable of posting the hike of 12.5% y-y to IDR3.3 trillion in marketing sales amid stagnant backdrop of the property sector. The hike was backed by the launch of 11 new projects during 1H18, with Java’s projects contributing 74% to marketing sales. The accomplishment was equal to 43% of the target. Overseeing the trend of CTRA’s second half marketing sales constantly higher within the last 4 years, we project that CTRA is capable of outpacing its 2018 target.
Target Price of IDR1,525
We use an estimated discount to RNAV of 72.3x (1SD higher than the last 3-year average) as the basis for the valuation method. Now, CTRA’s stocks are traded at a 2018F discount to RNAV of 80%.
Source: Company, NHKS Research
CTRA 1H Marketing Sales (IDR bn) | 1H15-1H18
Source: Company, NHKS Research
CTRA Quarterly Revenue (IDR bn) | 1Q16 - 2Q18
Revenue by Segment | 1Q16 - 2Q18
Source: Company, NHKS Research
CTRA Quarterly Net Profit (IDR bn) | 1Q16 - 2Q18
Source: Company, NHKS Research
Performance Highlights
Margin Ratios | 1Q17 - 2Q18
Source: Company, NHKS Research
CTRA Revenue Breakdown | 2Q18
2Q18 review (IDR bn)
Source: Bloomberg, NHKS research
2Q17 3Q17 4Q17 1Q18 Actual Estimate 2Q18 y 3Q18E
ASEAN Property Developer
CTRA is one of Indonesian-based real–estate developers with the most diversified project portfolios such as residences, apartments, shopping malls, golf courses, hotels, hospitals, and offices. It embarked on its business in 1981 by developing CitraGarden City Jakarta. Now, it has successfully developed 75 projects situated in 33 cities across Indonesia.
Despite its projects mostly targeted for middle–income individuals, two of its projects, namely Citra Maja Raya and Ciputra World respectively are targeted for low–income individuals and high–income individuals. Of note, it has direct–ownership land banks of 1,500 hectares and joint–operation–scheme land banks of 5,063 hectares.
Indonesia Real Estate Development Sector in ASEAN
Indonesia —a country with the largest area of land banks and the most populous nation in ASEAN —proves a boon to the real
estate development business. Indonesian real estate developers have larger amount of land banks than its ASEAN’s peers land
banks. For instance, BKSL and BSDE have the land banks of 14,666 hectares and 3,966 hectares, respectively.
Indonesia and Philippines’ real estate sectors are the most competitive amongst their peers in ASEAN. The property developers in those two countries post better gross margins yet lower total asset than their peers do.
Multiple Valuation
Forward P/E band | Last 3 yearsSource: NHKS research
Discount to NAV band | Last 3 years
Source: NHKS research
Rating and Target Price Update
Target Price RevisionDate Rating Target Price Last Price Consensus vs Last Price vs Consensus
04/25/2018 Buy 1,370 (Dec 2018) 1,155 1,449 +18.6% +5.4%
07/05/2018 Buy 1,130 (Dec 2018) 945 1,423 +19.6% -20.6%
10/04/2018 Buy 1,050 (Dec 2019) 785 1,339 +33.8% -21.6%
Source: NHKS research, Bloomberg
Closing and Target Price
Source: NHKS research Analyst Coverage Rating
Source: Bloomberg
NH Korindo Sekuritas Indonesia (NHKS) stock ratings
1. Period: End of year target price
2. Rating system based on a stock’s absolute return from the date of publication
Summary of Financials
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