Beating Expectations

TOTL had exceeded our expectations and posted Rp3,027.2 billion of revenues in 12M23, up by 33.0% (yoy) from Rp2,276.8 billion in 12M22. On quarterly basis, total revenues in Q4/23 had jumped by 77.7% (yoy) to Rp950.0 billion vs. Rp534.6 billion in Q4/22 as well as 10.1% (qoq) higher than Rp862.7 billion registered in Q3/24. Income from JV projects was also strong in Q4/23 at Rp17.7 billion, up from Rp8.0 billion in Q4/22 and Rp8.9 billion in Q3/23. Cumulatively, income from JV projects had climbed 98.5% (yoy) to Rp57.9 billion in 12M23 vs. Rp23.3 billion in 12M22. Including income from JV projects, the grand total of revenues came in at Rp3,085 billion in 12M23, up 34.1% (yoy) from Rp2,300.1 billion in 12M22.

The bottom line was also upbeat, with core net profit (net profit excluding the non-controlling interests) soared to Rp172.7 billion in 12M23 from Rp91.7 billion in 12M22, which was driven by strong core net profit in Q4/23 at Rp63.1 billion compared to Rp25.7 billion in Q4/22 and Rp42.0 billion in Q3/23. On the other hand, profitability margins have improved in 12M23 vs. 12M22 as seen on higher gross profit margin (GPM), core operating profit margin (cOPM), and core net profit margin (cNPM). Better profitability also came with higher Return on Assets (ROA) and Return on Equity (ROE). At the end of FY23, ROA and ROE were at 5.5% and 16.1%, respectively compared to 3.1% and 7.4%, respectively at the end of FY22.

New Projects Added

There were four new projects initiated in Q4/23: Jakarta Premium Outlets Kota Tangerang, Batam Simatelex Phase 3, Hotel Novotel Fatmawati and Rumah Tinggal jalan Sumbawa. In addition, there were 14 carried-over projects from the 9M23 period, which led to a total value of contract commitments of Rp5,751.7 billion at the end of FY23, down from Rp7,167.1 billion at the end of 9M23 as well as lower than Rp6,199.9 billion at the end of FY22. Recently, the Company has also stated that it has secured a total of Rp1.6 trillion-worth of new contracts in the first three months of FY24, up significantly compared to a year earlier. Overall, for FY24 TOTL is expecting to obtain new contracts worth Rp3.5 trillion. Financially, the Company was quoted as aiming at generating Rp3.1 trillion in revenues and Rp150 billion in net profit this year while allocating Rp8 billion for capital expenditure.

Target Price Raised

To reflect TOTL’s upbeat performance in FY23, we have updated our valuation. Based on the three valuation methods we are using, TOTL’s target price has been upgraded to Rp537 per share, compared to Rp481 per share in our previous report. The new target price implies 18% upside potential from the last price on April 19th 2024 at Rp454 per share.