Discounting the Cycle
Maintain BUY but cut TP to IDR 9,100 (from IDR 21,000), implying 34.3% upside - 40% discount to RNAV. The reduction reflects three converging pressures: i) elevated KPR rates, absorption running well below pace; and iii) Rupiah weakness is compressing real purchasing power. Our BUY holds: PIK2 stands out as Greater Jakarta's most integrated large-scale live work-play township.

1Q26 Results: A Strong Beat - Not a Run Rate
PANI posted a sharp 1Q26 beat, with net profit of IDR 578bn (+1,067% YoY; +62% QoQ), booking 44% of cons. The outperformance was primarily driven by lumpy commercial land plot deliveries to PT Global Jet Express (J&T Express) and PT Erajaya Swasembada, which together accounted for ~47% of revenue and pushed gross profit margin to 71.9% (vs. 56.2% in 1Q25). On the bottom line, minority interest fell to only 12.7% of profit (vs. 69.3% in 1Q25), further amplifying the net profit beat.
That said, we caution against extrapolating this quarter. Marketing sales reached only IDR 987bn (23% of the IDR 4.3tn FY26 target) with residential and commercial strip products continuing to lag, at 18% and 13% of their respective full-year targets. The 1Q beat is a function of delivery timing, not a read-through on run-rate demand.

PANI faces a cyclical air pocket in FY26 - not a structural break.
We forecast IDR 3.98tn in FY26 presales (-7.5% YoY), ~7% below management guidance of IDR 4.3tn. Three structural pressures are converging: (i) sluggish real wage growth continues to erode mid-market affordability (Exhibit 1); (ii) KPR rates (6.78%, Mar-26) face further upward pressure, following BI's 50bps hike (Exhibit 2); and (iii) a weakening Rupiah is compressing purchasing power and deferring forward commitment. These pressures are already visible on the balance sheet, with advance coverage compressing from 91% in 2023 to 72% in 2025 (Exhibit 5) as inventory growth (+11.8% YoY) outpaced near-flat sales advances (+0.2% YoY).
Commercial landplots provide a partial offset, with ~8% growth projected in FY26. Jakarta's existing CBDs are effectively land-exhausted, and no other development in Greater Jakarta offers a comparable greenfield CBD proposition. PIK2's waterfront address and sub-10-minute Soekarno-Hatta Airport access are advantages no inland alternative can replicate. Crucially, this is no longer a speculative thesis: anchor tenants have moved in, with BNI Tower and Mandiri Financial Center nearing completion, and at least 11 corporations, spanning banking, FMCG and industrial sectors, including BCA and Erajaya, formally committed to the area (Exhibit 6 & 7). The per-unit ASP decline to IDR 10.7bn in 2025 from IDR 49.1bn in 2023 (Exhibit 3) corroborates this, as large anchor lots are being absorbed first, with the mix progressively shifting toward smaller standard plots.
Residential marketing sales face the rate headwind most directly, though we read this as cyclical rather than structural. Even among PANI's premium buyer base (ASP ~IDR 5bn/unit; Exhibit 3), elevated financing costs are deferring purchasing decisions, driving our projection of ~5% YoY decline in FY26. Demand capacity, however, remains intact: average deposit balances in the >IDR 5bn tier (our proxy for luxury buyers) have compounded, at a 4.7% CAGR since 2018 (Exhibit 8 & 9), driven by asset appreciation that surges despite wages staying stagnant. Over the medium term, demand fundamentals remain intact. Tangerang leads Greater Jakarta's landed residential corridors on a development runway, demand growth, and environmental risk (Exhibit 11), and within it, buyers seeking premium landed residential are effectively channeled toward PIK2 and a few peers (Exhibit 12). Of these, PIK2 stands apart as the only township anchored by a genuine CBD, creating a self-reinforcing live-work-play demand flywheel.

BCA Research Virtue 5

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Calista Muskitta

Bank Tabungan Negara

18 March 2025 - 10.33am

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