CTRA - Recurring Income Cushions Cyclical Softness

KBVS Update
Wednesday, 6 May 2026

CTRA - Recurring Income Cushions Cyclical Softness
(Reiterate BUY - TP: IDR1,000)

1Q26 results: weaker YoY/QoQ, but inline with run-rate. CTRA delivered a softer 1Q26, with revenue down 6.4% YoY and 39.5% QoQ to IDR2.6 tn, broadly tracking expectations at 24.8% of FY26F. Weakness was driven by property development (-9.2% YoY; -45.1% QoQ), while earnings remained largely inline, with EBIT at 24.2%/24.3% run-rate and net profit at ~25% of full-year estimates.

FY26F: normalization on softer recognition cycle. 1Q26 inline; FY26F unchanged. Revenue to normalize (-18.1% YoY to IDR10.3tn), led by weaker development (-23.2% YoY), with broad-based softness across core segments and high-rise.

Recurring income: structural support continues to build. Recurring-income remains a key buffer, rising +4.0% YoY to IDR2.5tn in FY26F and lifting its contribution to 23.7% (vs. 18.7% FY25). Growth is led by steady mall performance on improving occupancy and footprint expansion, alongside stronger hospital contributions.

Margins: broadly stable, but earnings pressured by volume. Margins remain broadly stable at ~47%, as high-margin core (49.0%) offsets lower-margin apartments (34.3%) and recurring-income (42.8%). However, weaker top-line drives earnings down, with FY26F gross profit -18.2% YoY and net profit -22.3% YoY, normalising net margin to 20.0% off a high FY25 base.

Maintain BUY: diversification and recurring-income underpin resilience, with TP IDR1,000. CTRA’s diversified 34-city footprint and rising recurring income support resilience, but near-term outlook remains capped by weak demand, soft purchasing power, and higher-for-longer rates.

 

Regards,
Steven Gunawan - KBVS Research