The average target price of PANI.JK is 14302 and suggests 30% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 22500.0. This translates into 105% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 6000.0. This is equivalent to 45% downside potential in the worst case. 

PT Pratama Abadi Nusa Industri Tbk manufactures and sells packaging cans. The company primarily offers blek cans for glue, paints, and oil packaging. It also engages in the processing of fishery products and freezing food, as well as provides cold storage services. The company was founded in 2000 and is headquartered in Tangerang, Indonesia. PT Pratama Abadi Nusa Industri Tbk is a subsidiary of PT Multi Artha Pratama.

Indonesia

PT Pratama Abadi Nusa Industri Tbk

Consumer Cyclical

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

PANI.JK reported revenue of IDR 2 832 587mn in the last 12 months, up 31% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 94% from FY23 to IDR 38.52. Market expects EPS to reach IDR 38.78 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 28ppts over six months and grown 24ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 46.3% in the last 12 months, up from 37.4% in FY23. 

Historically, PANI.JK has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 22.0%, a growth from 12.5% in FY23. 

PT Pratama Abadi Nusa Industri Tbk reported a return on equity (RoE) of 3.8% in the last 12 months, up from 3.6% in FY23. The market consensus projects an RoE of 6.7% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 1.6% in the last 12 months, an increase from 1.1% in FY23. The market analysts predict that RoA will be 2.6% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 2.2%, below the peers. The consensus estimate for FY24 for RoCE is 10.4%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.6 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

PANI.JK has below average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, excessive margin volatility, poor working capital management, and poor cash flow generation.

In highly turbulent market conditions, PANI.JK is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, PANI.JK is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from large to substantial. We would also like to highlight the substantial intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. In particular, the stock is overpriced on P/E, 'expensive' on EV/EBITD. 

PT Pratama Abadi Nusa Industri Tbk

IDR 11150

3

PT Pratama Abadi Nusa Industri Tbk

IDR 11150

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

IDR 11150

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