PT Pembangunan Graha Lestari Indah Tbk engages in the hotel and restaurant businesses in Indonesia. The company owns and operates a hotel under the Travellers Suites name; bakehouse under the Le Chic Bakehouse name; and a banquet and restaurant under the Tia Café name. It also generates hydroelectricity power. The company was founded in 1994 and is based in Medan, Indonesia.

Indonesia

PT Pembangunan Graha Lestari Indah Tbk

Consumer Cyclical

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half 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. On average, the company pays dividends annually. 

PGLI.JK reported revenue of IDR 20 484mn in the last 12 months, up 5% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 27% from FY23 to IDR -79.54.

Over the last six months, the stock performance has varied, with an increase following a drop. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 40ppts. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 36ppts and its growth decelerated by 4ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 2.2% in the last 12 months, up from -44.0% in FY22. 

Historically, PGLI.JK has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -189.4%, down from 32.5% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to -56.5%, below the peers. 

PT Pembangunan Graha Lestari Indah Tbk reported a return on equity (RoE) of -93.5% in the last 12 months, down from 9.7% in FY22. 

Another important profitability metric, return on assets (RoA), amounted to -53.3% in the last 12 months, a decrease from 6.3% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -5.8 in the past several years. This ratio implies a fragile 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.

PGLI.JK has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note low margin volatility, strong debt servicing capacity, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, and poor cash flow generation.

In highly turbulent market conditions, PGLI.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, PGLI.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 moderate to substantial. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is overvalued on EV/EBITDA. 

PT Pembangunan Graha Lestari Indah Tbk

IDR 114

1

PT Pembangunan Graha Lestari Indah Tbk

IDR 114

1

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

IDR 114

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