Date of Report

21 October 2024

Broker

UOB Kay Hian Private Limited

Company Overview

Ciputra Development (CTRA) is one of the leading property developers in Indonesia, focusing primarily on residential and commercial products. The company has a well-diversified land bank spread across Greater Jakarta, Surabaya, and other cities. CTRA’s reputable brand allows it to expand into new cities through partnerships with local landowners.

Stock Data

• GICS Sector: Real Estate
• Bloomberg Ticker: CTRA IJ
• Shares Issued: 18,535.7 million
• Market Cap: Rp25,950.0 billion (US$1,676.2 million)
• 3-Month Average Daily Turnover: US$2.8 million
• 52-Week High/Low: Rp1,430/Rp975

Price Performance

• 1 Month: +7.7%
• 3 Months: +12.9%
• 6 Months: +23.3%
• 1 Year: +35.9%
• Year-to-Date: +19.7%

Recent Performance

Ciputra Development reported a strong performance in the first nine months of 2024 (9M24), with marketing sales reaching Rp8.7 trillion, reflecting an 11% year-over-year increase. This achievement equates to 78% of its Rp11.2 trillion sales target for 2024. Notable growth areas included Sumatera and Kalimantan.

Key Launches

To meet the remaining sales target of Rp2.4 trillion for 2024, CTRA plans significant product launches in the fourth quarter (4Q24) projected to contribute approximately Rp1.9 trillion in marketing sales. Key upcoming projects include:

• Lake Villa Cluster and Elaia Cluster Phase 2 in CitraGarden Serpong (Rp885 billion combined)
• Emerald Stone and Stone Gate Park in CitraLand Surabaya (Rp381 billion)
• Sentosa Cove Phase 2 in CitraLand Gama City Medan (Rp239 billion)
• Additional launches across various locations with significant projected sales.

Industry Landscape

There are indications of potential structural changes in the industry landscape due to a new government initiative to eliminate certain property and housing taxes. This includes the proposed reduction of the value-added tax (VAT) from 11% and a 5% land and building acquisition duty (BPHTB), expected to take effect within the first 1-3 years of the new administration.

Earnings Outlook

Despite a solid sales performance, the earnings estimates for 2024-25 have been revised down by 11.8-18.6%. The projected net profit for 2024 is Rp1.94 trillion, representing a 5% year-over-year increase. Factors that could weigh on earnings growth include lower interest income due to decreased cash reserves and potential forex losses.

Valuation and Recommendation

The report maintains a BUY recommendation with a revised target price of Rp1,570, reflecting an increase based on strong marketing sales and expected structural changes in the industry. CTRA’s valuation suggests an above-average potential, with a fair value increase of approximately 38.7% compared to 2017 assessments.