Pakuwon Jati Bloomberg: PWON.IJ Reuters: PWON.JK

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Company Update

Pakuwon Jati

Bloomberg: PWON.IJ | Reuters: PWON.JK

Samuel Research 08 Agustus 2017

Akhmad Nurcahyadi, CSA

+62 21 2854 8144

[email protected]

Better than its peers

Kami masih menyukai PWON, selain kinerja 1H17 yang masih seseuai dengan ekspektasi, PWON juga masih akan menjadi penerima benefit kontinuitas permintaan ruang sewa. Progress proyek yang inline serta angka marketing sales yang dilaporkan jauh lebih baik dari peersnya menjadi alasan lain SSI masih merekomendasikan PWON. Kami menaikan TP +8.05% menjadi Rp767/saham dengan menaikan asumsi harga per sqm dari aset-aset perusaaan (sesuai dengan update terakhir dari PWON). Tetap BUY untuk PWON dengan TP NAV (Disc 50%) sebesar Rp767/saham (18.6xP/E17E, 3.6xPBV17E).

1H17 yang lebih baik dari peers. Pendapatan dan laba di 2Q17 masing-masing bertumbuh +14.1%QoQ, +31.6%YoY dan +58.9%QoQ, +56.7%YoY, sementara untuk 1H17 naik +20.9%YoY dan +0.5%YoY. Di periode yang sama pendapatan +6.6% lebih tinggi dari 2Q17E SSI dan laba melampaui +7.3% dari angka proyeksi kami. Per 1H17, laba tercatat dibawah ekspektasi hanya mencapai 89.47%, sedangkan top line 5.25% diatas angka 1H17E SSI.

Kemudahan capaian paruh akhir tahun. Di 2H17, PWON akan lebih mudah mencapai proyeksi FY17E SSI atau hanya 47.2% dibandingkan dengan rata-rata paruh akhir tahun selama lima tahun terakhir sebesar 49.82%. Di sisi lain, laba perlu mencapai 54.5% dari FY17E kami vs rata-rata 47.2%. Pengakuan pendapatan dari backlog PWON dan nilai recurring yang kami perkirakan masih akan stabil akan membantu PWON didalam mencapai laba FY17E SSI dan konsensus.

Marketing sales yang inline. Optimisme kami pada PWON juga didukung oleh pencapaian nilai marketing sales yang lebih baik dari peersnya. Ditengah perbaikan sektor yang belum terlihat, pertumbuhan pre sales +5.1%YoY di 1H17 merupakan indikasi daya tahan perusahaan sekaligus cerminan bargaining position PWON terhadap sektor properti.

Maintain BUY. Kami menaikan target harga melalui perubahan asumsi harga per m2 untuk aset-aset PWON (update data 1H17). Perbaikan sektor yang kami perkirakan baru akan terlihat stabil tahun depan, menjadikan PWON lebih menarik dibandingkan dengan peersnya yang sangat bergantung pada nilai pre-sales serta rendahnya porsi recurring income. Resiko terletak pada (1) pencapaian pre sales rendah (2) porsi recuring income turun tajam (3) perbaikan sektor makin tidak pasti dan mendorong pelemahan daya beli (4) tertundanya ekspansi dan eksekusi proyek.

Target Price Rp 767 Last Price Rp 690 Potential Upside 11.2% JCI Index 5,771 Share isued (mn) 48.16 Market Cap. (Rp bn) 33.47 52-Weeks High/Low 765 / 535 Avg Daily Vol (mn) 29.56

Free Float 30.2

Nominal Value Rp 25

Book value/share ‘17 Rp 214 Relative to JCI Chart

Company Background Shareholder Structure PT Pakuwon Arthaniaga 69.7% Vanguard Group 1.8% Others 28.5%

BUY (Maintain)

PT Pakuwon Jati Tbk memiliki, mengembangkan dan mengoperasikan shopping centers, business complexes, real estate, industrial estate dan hotels.

80 90 100 110 120

Aug-16 Nov-16 Feb-17 May-17 Aug-17

JCI PWON

PWON - Forecast and Valuation (at closing price Rp690 per share)

Y/E Dec (Rpbn) 15A 16A 17E 18E

Revenue 4,625 4,841 5,587 6,532 EBITDA 2,535 2,551 2,871 3,244 Net Profit 1,262 1,671 1,980 2,340 EPS (Rp) 26 35 41 49 DPS (Rp) 11 5 7 9 BV per Share (Rp) 150 180 214 254 EV/EBITDA (x) 14.1 14.1 12.8 11.2 P/E Ratio (x) 26.3 19.9 16.8 14.2 P/BV Ratio (x) 4.6 3.8 3.2 2.7

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Pakuwon Jati

PWON:IJ |PWON.JK

Figure 1. PWON 1H17 Result

Source: Company, SSI research

Figure 2. PWON and Peers

Source: Bloomberg, Respective Companies, SSI research

Figure 3. PWON P/E Band

Source: Bloomberg, SSI research

Rpbn 2Q16 1Q17 2Q17 QoQ YoY 6M16 6M17 YoY

Sales 1,195 1,378 1,573 14.1 31.6 2,441 2,951 20.9 Cost Of Sales (579) (591) (689) 16.6 19.1 (1,075) (1,280) 19.1 Gross Profit 617 787 884 12.3 43.3 1,366 1,671 22.3 Operating Expense (115) (120) (119) (1.4) 3.3 (212) (239) 12.8 Operating Profit 502 666 765 14.8 52.5 1,154 1,432 24.1 Net Interest expense (51) (67) (29) (56.9) (43.3) (114) (96) (15.2) Interest Income 26 (99) 162 (264.2) 512.9 51 63 23.5 Interest expense (78) 31 (191) (712.1) 145.9 (165) (160) (3.2) Forex loss 14 20 (0) (101.1) (101.6) 99 20 (80.3) Pre-tax Income 371 380 605 59.0 62.8 980 985 0.5 Tax (15) (6) (5) (21.5) (66.0) (18) (11) (37.1) NI owners company 353 348 553 58.9 56.7 896 901 0.5 EPS 7.3 7.2 11.5 58.9 56.7 19 19 0.5 Margin Gross margin 51.59 57.11 56.20 (0.91) 4.60 55.96 56.62 0.67 Operating margin 41.97 48.37 48.64 0.28 6.68 47.27 48.52 1.25 Net margin 29.51 25.25 35.14 9.89 5.62 39.41 33.00 (6.41)

Mkt Cap Last price YTD ChgTP Cons TP SSI Upside PE PE PBV PBV ROE ROE (Rp bn) (Rp) (% ) (Rp) (Rp) (% ) 17E 18E 17E 18E 17E 18E

BSDE BUY 34,259 1,780 1.4 2,287 2,350 32.0 15.9 13.7 1.4 1.2 8.7% 8.5% PWON BUY 33,230 690 22.1 716 710 2.9 16.8 14.1 3.2 2.7 19.2% 19.3% ASRI HOLD 6,877 350 (0.6) 432 390 11.4 10.3 9.7 0.9 0.8 8.8% 8.7% SMRA HOLD 14,499 1,005 (24.2) 1,380 1,307 30.0 43.7 33.5 1.7 1.6 4.0% 4.8% SSIA BUY 3,200 680 56.7 874 750 10.3 15.1 12.6 1.0 0.9 6.6% 7.5% CTRA BUY 19,581 1,055 (21.0) 1,584 1,580 49.8 12.3 10.2 1.3 1.1 10.3% 11.1% DMAS BUY 9,832 204 (11.3) 294 300 47.1 11.5 9.3 1.1 1.0 9.7% 10.8% KIJA BUY 6,539 314 8.4 413 450 43.3 13.7 12.1 1.1 1.0 7.8% 8.1% Average 17.4 14.4 1.5 1.3 9.4% 9.8% Stock Rec 0 5 10 15 20 25 30

Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17

Averag e ST d ev +1 ST d ev -1 PE - Fo rward ST d ev +2 ST d ev -2

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Pakuwon Jati

Figure 4. PWON NAV Valuation

Source: Bloomberg, SSI research

ASSETS

Area

(ha)

Price/sqm

(Rp '000)

Market Value

( Rp bn)

NAV

(Rp bn)

NAV/Share

Landbanks

Kota Kasablanka

7 38,000

2,698

56 Gandaria City

3 18,000

522

11 Central Surabaya - Tunjungan City

3 22,000

704

15 East SBY - Pakuwon City Township

232 15,500

35,976

747 East SBY - Outside Pakuwon City

22 15,500

3,333

69 West SBY - Grand Pakuwon Township 155

11,000

17,028

354 West SBY - Pakuwon Mall

6.0 11,000

660

14 West SBY - Outside Grand Pakuwon

6.9 11,000

759

16 TB Simatupang

4.5 24,000

1,080

22 Daan Mogot

11.0 10,000

1,100

23 Bekasi

2.7 2,000

54

1 Total land

453 63,913

1,327

Discount to NAV

50%

31,957

664 NAV after tax 5%

30,359

630 Development

4,920

102 Recurring

5,109

106 Subtotal

40,388

839 Total Shares (in mn)

48,160

Net cash

(3,443)

(71)

Net asset value

36,946

767 Target price

767 Closing 08/07/17

700

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Pakuwon Jati

Key financial figures

Yr-end Dec (Rp bn) 15A 16A 17E 18E Yr-end Dec (Rp bn) 15A 16A 17E 18E Revenue 4,625 4,841 5,587 6,532 Net income 1,262 1,671 1,980 2,340

COGS 1,957 2,088 2,448 2,928 Depreciation & amort. 271 333 789 437

Gross profit 2,669 2,754 3,139 3,604 Working Capital (480) 1,156 (963) 691

Gross margin (%) 57.7 56.9 56.2 55.2 Operating CF 1,052 3,160 1,806 3,467

Operating profit 2,265 2,260 2,564 2,925 Net - Capital expenditure(2,208) (3,147) (2,225) (2,908)

Operating margin (%) 49.0 46.7 45.9 44.8 Others 5 (127) 63 (32)

EBITDA 2,535 2,551 2,871 3,244 Investing CF (2,203) (3,274) (2,162) (2,940)

EBITDA margin (%) 54.8 52.7 51.4 49.7 Dividend (525) (263) (349) (413)

Other inc (exp) (839) (528) (512) (500) Others 782 527 593 111

Pre-tax profit 1,425 1,732 2,051 2,426 Financing CF 257 264 245 (302)

Income tax - net (25) 48 55 62 Net - Cash flow (894) 149 (111) 225

Net profit - owners 1,262 1,671 1,980 2,340 Cash at beginning 3,176 2,283 2,432 2,321 Net profit margin (%) 27.3 34.5 35.4 35.8 Cash at ending 2,283 2,432 2,321 2,547

Yr-end Dec (Rp bn) 15A 16A 17E 18E Yr-end Dec 15A 16A 17E 18E

Cash & ST Invest 2,283 2,432 2,321 2,547 ROE (%) 13.3 15.2 15.5 15.8

Receivables 302 237 274 320 ROA (%) 6.7 8.1 8.7 9.3

Inventories 2,254 2,860 3,281 3,814 Revenue Growth (%) 19.4 4.7 15.4 16.9

Others 570 597 722 844 EBITDA Growth (%) 2.6 0.6 12.5 13.0

Total current assets 5,409 6,127 6,598 7,524 EPS Growth (%) -49.8 32.4 18.5 18.2 Net fixed assets 1,457 1,700 1,726 1,807 Interest Coverage (x) 7.9 6.8 8.1 10.1 Other assets 11,912 12,848 14,351 15,952 Debt to Equity (%) 51.9 47.6 45.2 38.9

Total assets 18,778 20,674 22,676 25,283 Net gearing (%) 27.8 25.5 27.0 21.7

Payables 198 212 223 275

ST. debt & curr. mat 536 769 846 931

Other cur liab 3,689 3,637 3,403 3,920 Yr-end Dec 15A 16A 17E 18E

LT. debt 4,372 4,471 4,918 4,824 Recurring income 2,317 2,553 2,891 3,380 Other long term liabilities 528 566 531 541 Non recurring 2,308 2,288 2,696 3,152

Total liabilities 9,323 9,654 9,920 10,492 USD/IDR (AvG) 13,500 13,253 13,200 12,800

Total equity 9,455 11,020 12,755 14,791 USD/IDR (EoP) 14,000 13,000 12,900 12,600

Profit and Loss Cash Flow

Balance Sheet Key Ratios

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DISCLAIMERS : Analyst Certification : The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s) principally responsible for the preparation of this research has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia

Research Team

Andy Ferdinand, CFA Head Of Equity Research, Strategy,

Banking, Consumer [email protected] +6221 2854 8148

Rangga Cipta Economist [email protected] +6221 2854 8396

Muhamad Makky Dandytra, CFTe Technical Analyst [email protected] +6221 2854 8382

Akhmad Nurcahyadi, CSA Auto, Aviation, Cigarette, Construction

Healthcare, Heavy Equipment, Property [email protected] +6221 2854 8144 Arandi Ariantara Cement, Telecommunication, Utility [email protected] +6221 2854 8392

Marlene Tanumihardja Poultry, Retail, Small Caps [email protected] +6221 2854 8387

Sharlita Lutfiah Malik Mining, Plantation [email protected] +6221 2854 8339

Nadya Swastika Research Associate [email protected] +6221 2854 8338

Private Wealth Management

Evelyn Satyono Head of PWM / Institutional Sales [email protected] +6221 2854 8380 Muhamad Alfatih CSA, CTA, CFTe Senior Technical Portfolio Advisor [email protected] +6221 2854 8129

Ronny Ardianto Institutional Equity Sales [email protected] +6221 2854 8399

Clarice Wijana Institutional Equity Sales [email protected] +6221 2854 8395

Fachruly Fiater Institutional Equity Sales [email protected] +6221 2854 8325

Equity Sales Team

Kelvin Long Head of Equities [email protected] +6221 2854 8150

Yulianah Institutional Equity Sales [email protected] +6221 2854 8146

Lucia Irawati Retail Equity Sales [email protected] +6221 2854 8173

Online Trading Sales Team

Nugroho Nuswantoro Head of Marketing Online Trading [email protected] +6221 2854 8372

Wahyu Widodo Marketing [email protected] +6221 2854 8371