WIKA – Books First Net Loss in 3Q20

In 3Q20, WIKA booked an income of IDR3.25 trillion (-53% YoY, +11% QoQ). However, the high financial cost of IDR397 billion pushed the bottom line to record a net loss of IDR200 billion and 9M20 profit to IDR50 billion. New contract acquisitions in 3Q20 which were better than 2Q20 provides a positive cataltyst for WIKA’s performance until the end of the year. Meanwhile, WIKA must control its interest-bearing debt, in order to withstand a jump in leverage ratio.

CTRA – Strategizing to Attract Homebuyers

CTRA’s performance in 2Q20 was supported by revenue from the development segment with an 89% contribution. The Landed house and shophouse segment was the only segments that grew during the PSBB period. 2Q20 income was booked at IDR1.29 trillion (-13.6% YoY), followed by the first net loss recorded by CTRA at IDR8 billion. Currently, there is a discourse on adding mortgages to the PEN program. If realized, this will be a positive sentiment, but CTRA will still have to set a strategy in order to attract homebuyers.

PWON – Hit by PSBB Tightening

The strict PSBB (Large-Scale Social Restrictions) period in 2Q20 caused PWON’s revenue to fall to IDR324 billion (-82.2% YoY). Meanwhile, profit was booked at IDR416 billion (-35.5% YoY). On the other hand, PWON has achieved marketing sales of IDR501 billion or 47% of the 2020 target. We are optimistic that PWON will be able to fully achieve its marketing sales target by the end of the year. Plus, until the first semester, the average occupancy rate of PWON’s malls is still above 90%.

WIKA – New Contract Optimalization

WIKA booked a net profit of IDR151 billion (-75% YoY) or -27% from our expectations. Construction sector, which is still suppressed by the pandemic, has forced WIKA to revise its new project target to IDR21.3 trillion. Despite having only realized 15.98%, if the income from government project auctions starting in 3Q20 books optimum result, it will be good for WIKA’s FY20 and FY21 performance.

PTPP – 2Q20 Performance, Bottom-Line Touches Lowest Level

PTPP posted a 2Q20 profit of IDR3 billion (-98.6% YoY), which is the company’s deepest bottom-line decline. Even though it exceled in acquiring new contracts compared to other state-owned construction companies, or reaching IDR8.98 trillion during 1H20, in the future PTPP must sort out which contracts have good payment scheme so as not to burden the company’s cash. In addition, the increased infrastructure budget in the 2021 Draft State Budget (RAPBN) is a breath of fresh air for PTPP’s performance next year.

SMGR – Must Take Advantage of Economic Recovery

SMGR performance in 1H20 resulted in bottom line increase of 26.6% YoY, although the 2Q20 sales and profit both dropped by -9.5% and -25.5%. Under the National Economic Recovery (PEN), where the delayed infrastructure projects and construction will be continued, will help SMGR sales volume growth domestically. Export volume should also be intensified, considering export destination countries are gradually recovering.

WSKT – Counting on Divestment Success

WSKT opened the first quarter of 2020 with a decrease of 52% YoY in revenue and 94% YoY in profit so that it was recorded at IDR4.17 trillion and IDR43 billion respectively. The construction segment which fell 56% YoY became the hindrance. While booking positive operating cash flow of IDR2.8 trillion, WSKT is still trying to divest 4 toll road concessions in 2H20 to strengthen company cash flow. Due to possibility of the pandemic causing economic downturn, we revise WSKT’s revenue and profit estimation, and downgrading our recommendation from Buy to Hold with target price of IDR820.

PWON – Counting on the Success of Strategies during Pandemic

In 1Q20, PWON posted revenue of IDR1.65 trillion (-3.5% YoY). Due to the exchange rate loss of up to IDR557.62 billion, net profit plunged to IDR67 billion (-90.7% YoY). Meanwhile, recurring income still grew 1.3% YoY supported by a 4% YoY increase in the rental and service charges segments. Two business locations, namely Jakarta and Surabaya, which are the highest ranks in the Covid-19 cases, are a challenge for PWON in developing strategies to maintain business stability during the pandemic.

WIKA – Sluggish 1Q20 Performance, Suppressed by Pandemic

WIKA recorded a revenue of IDR4.19 trillion (-35% YoY) due to declines in all revenue segments and pushed 1Q20뭩 net profit to IDR99 billion (-65% YoY). On the occasion of economic re-opening, WIKA will continue to operate the delayed projects and maximizing on going projects to boost cash flow. We recommend a BUY rating with TP of IDR1,840.