CTRA - Maintaining the positive momentum in 2024

KBVS Update
Wednesday, 8 November 2023

CTRA: Maintaining the positive momentum in 2024
(Maintain BUY; TP: IDR1,410)

•9M23 declined 22.5% yoy; fall below estimate. CTRA booked IDR402 bn of net profit in 3Q23 (+22.7% yoy/+9.9% qoq). This resulted in 9M23 net profit came at IDR1.18 tn (-22.5% yoy). 9M23 gross margin dropped by 279bps, partly impacting the decline in net profit. 2021-22 was a high base for CTRA, thus the company guided for slower growth in 2023. We anticipate CTRA's net income could rebound in 4Q23, as the company expects to recognize more revenue in the 2H23.

•Strong 9M23 marketing sales achievement. CTRA’s booked IDR2.7 tn of marketing sales in 3Q23 (+5.8% yoy/+64.8% qoq). This resulted 9M23 marketing sales at IDR7.8 tn which reaching 79.7% of the upgraded FY23 target of IDR9.8 tn. Looking ahead to FY23F, we anticipate that CTRA could surpass their FY23 marketing sales target driven by the successful launch of the new project in Citra City Sentul, which contributed to strong marketing sales of IDR685 bn and 3 new products scheduled for 4Q23 with IDR1.15 tn marketing sales target for this year.

•Expect marketing sales to reach IDR10.5 tn in 2024. In 2024 we forecast marketing sales to reach IDR10.5 tn (+8.4% yoy) primarily driven by several new projects in the pipeline that are still under negotiation process. They are located in big cities such as greater Jakarta, greater Surabaya, Medan, and Makassar. Furthermore, CTRA is poised to benefit from VAT incentives,

•Reiterate our BUY call with higher target price of IDR1,410. We reinitiate BUY on CTRA with DCF-based target price of IDR1,410 (WACC: 11.1%; LTG: 3%), which implied to 1.1x ‘24F PBV and 72.5% discount to ‘24F RNAV.

Regards, 
Benyamin Mikael – KBVS Research Team