Ciputra Development (CTRA IJ)

Trimming Our FY25-27F Pre-Sales by 5%; Reiterate Buy Rating as Competitive Advantages Intact

• CTRA’s 1Q25 earnings reflected resilient handover execution and disciplined opex, outperforming peers and company guidance.
• Despite a strong 1Q25 pre-sales (29% of FY25F), we lowered our FY25-27F assumptions by 5%, aligning with mgmt’s guidance.
• Maintain Buy with a lower TP of Rp1,600; CTRA remains our top sector pick with well-diversified, end-users-oriented projects.

1Q25 Financial Results Reflected Resilient Handover Execution

CTRA’s net profit of Rp660bn in 1Q25 (-22% qoq, +37% yoy, forming 29%/28% of our/cons. FY25F) reflects resilient handover execution as well as disciplined opex management (operating margin +153bps to 33%). The 1Q25 revenue/net profit growth of 18%/37% yoy also outperforms peers’ (BSDE due out May25) avrg. of 0%/-28%, as well as mgmt’s guidance of 5-10%/10-15% yoy.

Adjusting Our FY25-27F Pre-Sales by -5%

Management guided for flattish pre-sales growth in FY25F (Rp11.0tr) following an all-time high performance in FY24. Based on the latest guidance, we adjust our FY25-27F pre-sales forecast by 5% to Rp11.0tr/Rp11.5tr/Rp11.9tr, aligning with the company’s launching pipeline as well as execution and risks of weaker mortgage market due to tighter banks liquidity. This is despite the strong start of Rp3.1tr in 1Q25 (forming 29% of co’s FY25F target amid fewer working days), with overall pre-sales outperforming peers’ average achievement towards FY25F targets of 20% (BSDE 24% SMRA 18% PWON 18%). Incorporating the 1Q25 financial results and pre-sales, we adjusted our revenue recognition schedule, resulting in a revision of +4%/-6%/-9% in our FY25F net profit forecast.

Maintain Buy with a Slightly Lower TP of Rp1,600; Top Pick in the Sector

We adjusted our valuation method for the directly owned landbank to NAV (from DCF), as we believe it provides better estimates, considering that part of the assets includes legacy landbank. We arrived at a higher RNAV per share of Rp4,469 vs. Rp3,572 previously, yet assigned a higher discount of 65% (5-yr. mean) vs. 52% previously to account for the risks associated with the slower monetization process of the legacy landbank. This led us to our new TP of Rp1,600. Despite this, we believe CTRA’s key advantages remain intact namely: 1) Product pricing aligned with end-users’ demand (Rp1-5bn landed houses), 2) Diversified location to avoid overconcentration risks, 3) Optimizing VAT discount, 4) Executable ROE Improvement strategy through JO model. Key risk: weaker pre-sales.

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