On Track

TOTL’s revenues (excluding income from JV projects) have increased to Rp818.9 billion in Q1/24 or 32.3% (yoy) from Rp618.9 billion in Q1/23. Compared to the Company’s guidance for FY24, the Q1/24 revenues remained on track to meet its target at Rp3.1 trillion. In contrast, the income from JV projects in Q1/24 has dropped from Rp7.1 billion in Q1/23 to Rp3.4 billion. Whilst revenues have been upbeat on yoy basis, compared to Q4/23 the top line was notably lower by 13.8% (qoq). Similarly, income from JV projects in Q1/24 was 81% (qoq) less than that in Q4/23. Including income from JV projects, the grand total of revenues amounted to Rp822.2 billion in Q1/24, up by 31.4% (yoy) vs. Q1/23, but down by 15% (qoq) vs. Q4/23. At the bottom line, core net profit (net profit excluding the non-controlling interests) in Q1/24 has soared by 77.6% (yoy) to Rp52.7 billion vs. Q1/23. However, when compared to the Q4/23, core net profit has declined by 16.4% (qoq).

Improving Margins

In terms of profitability, TOTL’s margins have broadly improved. Gross profit margin (GPM) which excludes income from JV projects have ticked higher to 16.1% in Q1/24 vs. Q1/23 as well as vs. Q4/23. Including income from JV projects, GPM has also improved to 16.5% in Q1/24, higher than those in Q1/23 and in Q4/23. At the mid-line, core operating profit margin (cOPM) has increased to 9.9% in Q1/24, higher than in Q1/23 and Q4/23. Finally, core net profit margin (cNPM) stood at 6.4% in Q1/24, better than Q1/23 but slightly below Q4/23. Furthermore, return on assets (ROA) and return on equity (ROE) have both increased to 6.0% and 18.8%, respectively in Q1/24 vs. at the end of FY23. 

Five Projects Added

The Company has added five new projects in Q1/24. In addition to its existing 18 projects, TOTL has 23 ongoing projects as of the end of Q1/24. The five new projects added are BRI’s IT Facility in Tabanan, Hotel Ciplaz and Hotel Mercure in Garut, Microsoft Early Work JKT 11, and Binus School in Surabaya. Among these, Ciplaz, Mercure and Microsoft projects were expected to have been completed in Q2/24. Overall, the total value of contract commitments have increased from Rp5,752 billion at the end of FY23 to Rp6,072 billion at the end of Q1/24.

Adjusting the Target Price

As TOTL has managed to maintain its solid performance in Q1/24, we have updated our forecast assumptions which brings us to an upgraded target price. Moreover, our previous target price at Rp537 per share has been achieved in June 2024 when TOTL’s share price reached Rp560 per share. Based on the three valuation methods we are using, TOTL’s target price has been upgraded to Rp789 per share, compared to Rp537 per share in our previous report. The new target price implies 45% upside potential from the last price on July 5th 2024 at Rp545 per share.