CTRA- 9M23 declined 22.5% yoy; fall below estimate

CTRA- 9M23 declined 22.5% yoy; fall below estimate CTRA booked IDR402 bn of net profit in 3Q23 (+22.7% yoy/-31.1% qoq). This resulted in 9M23 net profit came at IDR1.18 tn (-22.5%), which is below with street’s estimate (63.2% of cons). 3Q23 revenue drop (-17.3% yoy) is due to lower revenue recognition from real estate segment (-24.0% yoy). Meanwhile, 9M23 revenue declined 9%, totaling IDR6.6 tn in 9M23, largely in-line.9M23 gross margin dropped by 279 bp, partly impacted the declined in net profit. (Source: Company) Comment: 2022 was a high base for CTRA, thus the company guided for slower growth in 2023, with revenue expected to grow up to 5% and net income expected to decline up to 10%. We anticipate that CTRA's net income could rebound in 4Q23, as the company expects to recognize more revenue in the 2H23, which has not yet been realized in 3Q23.