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Company Background
PT Ciputra Development Tbk (CTRA) primarily engages in property development and management. It classifies its business into two main segments: residential property and commercial property. Its properties are located nationwide, such as Greater Jakarta and Greater Surabaya. Investment Merits
§ Improved but “neutral” outlook for marketing sales in 2017
CTRA is confident that its marketing sales target of IDR 8,505 bn (18% YoY) is feasible to achieve, given that marketing sales reached around IDR 1,218 bn in 3M17 which translates an increase of 7.8% (QoQ). However, we expect marketing sales in FY17 to grow no more than by 13% to IDR 8,121 bn as CTRA’s core projects, such as Citra Garden City Jakarta, Citra Raya Tangerang and Citra Indah Jonggol will become the main driver of the company’s upcoming marketing sales.
§ Develops lower-cost homes to avoid housing backlog
CTRA plans to grow its portfolio of lower-priced house and this strategy is supported by weaker property affordability. However, there is still growth in Indonesia's lower middle-income population, which comprises of first-home buyers who seek houses priced under IDR 1 bn. There is also fewer competition in this market segment and less speculative buyers, who can cause volatility in demand.
§ Diversified portfolio to come in handy in the midst of sluggish appetite
CTRA currently has a presence in over 33 cities with more than 70 projects in its portfolio to tap demand in different regions. In addition, its ample range of products can accommodate numerous customer segments. With a track record of over 30 years, CTRA is the preferred JO partner for land owners to develop new projects. Therefore, it has an advantage over other developers in securing a continuous stream of projects. CTRA targets to have between 6-10 new projects every year.
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