Pembangunan Perumahan: 1H11 net profit up by 78%yoy, above ours (17.7%) and consensus’ (16.7%) FY11F estimates (PTPP, Rp620, Buy, TP: Rp780) - Mandiri

􀂄 PTPP deserves to be put on investors buy screen, given the recent news about Bank Mandiri and Pelindo II signing MoU for US$1.28bn loan. PTPP has extensive experience in building ports throughout Indonesia, and it should be the front runner to win new contracts should port building activities in Indonesia picks up.
􀂄 1H11 net profit up by 78%yoy, accounting for 17.7% of our forecast and 16.7% of consensus. Such achievement is ahead of forecast given the backloaded nature of contract award and realization. Last year in 2010, 1H net profit accounted for 12.5% of full year forecast.
􀂄 PTPP booked 1H11 revenue of Rp1.7tn (+23.7%yoy, +64.1%qoq) translating to 27.1% and 27.5% of ours and consensus’ FY11F estimates.
􀂄 By end of Jun’11 new contract obtained reached Rp5.0tn translating to 31.3% of FY target. PTPP is targeting FY11F new contract to reach Rp16.0tn (+83.9%yoy), while carry over contract is targeted to reach Rp6.0tn (+140.0%yoy). PTPP is targeting FY11F revenue to reach Rp8.4tn (+90.9%yoy).
􀂄 We only assume Rp10trillion worth of new contracts (+16.9%yoy) for PTPP this year, to arrive at our revenue estimate of Rp6.2tn (+40.3%yoy). We have a buy recommendation on PTPP, which trades at PER11F of 11.8-10.3x.