Pembangunan Perumahan Persero: Exciting Earnings Outlook Ahead
We maintain our BUY call with a new TP of IDR5,100 (from IDR5,400, 37% upside) based on unchanged P/E target of 22x, +1SD above its historical mean. This is on the back of a stronger outlook post the completion of its rights issue in Dec-16. $PTPP’s new contracts performance in FY16 was above our estimates and we expect new contracts to grow to IDR38trn in FY17F, fuelled by power plants, low cost housing and other infrastructure projects. We expect a lower interest expense due to stronger balance sheet and earnings to grow 54% YoY in FY17F.