Pakuwon Jati (PWON IJ) (Buy) - Steady recurring assets growth

Steady recurring assets growth

PWON posted in-line 1Q26 results, with revenue at IDR1.6tn (+6% y-y, 23% of our forecast vs. 22% of 1Q seasonality) and core NPAT of IDR504bn (+10% y-y, 20% of our forecast vs. 21% of 1Q seasonality). Recurring income remains the engine; residential softness persists but increasingly lower contribution to the revenue mix.

Another robust quarter for recurring income

PWON’s overall recurring revenue grew to IDR1.4tn (+8% y-y), on top of last year’s 12% y-y. For 1Q26, hotels revenue grew the fastest at +12% y-y (vs. +5% in 1Q25) due to two new operating hotels, followed by malls +8% y-y (vs. +11% in 1Q25). Recurring GPM expanded by 250bp, with recurring GP +13% y-y, absorbing the residential GP contraction.

Temporary slowdown, long-term growth intact

We expect slower recurring revenue growth this year at +5% (vs. FY25’s +8% y-y), as last year growth was supported by the establishment of new malls and hotels – comps stiffen from 2Q onwards as those portfolios enter the base. The 2026 calendar also spreads Lebaran further from other holidays, which historically softens interim mall traffic; we expect management to lean on marketing and tenant-activation opex to bridge the gap

Ample dry powder for accretive opportunity

We think PWON’s balance sheet is very robust on strong monetization and ample dry powder as net cash and investments reached IDR6.7tn by 1Q26, approximately 44% of market cap. PWON’s CFO averages 84% of EBITDA, indicating limited investment to working capital. As such, we believe the company can quickly capitalize any value accretive opportunities. PWON’s plan to develop three new malls (Semarang, Batam, and Kokas) remains intact, which may add ~250K sqm NLAs (~30% of existing).

Maintain Buy and TP of IDR480

PWON remains our top pick in the Indonesia property sector, due to its: 1) recurring assets being relatively insulated to the weak mortgage market; 2) discounted valuation albeit improving fundamentals; 3) investors ownership at 3-year low limits incremental selling pressure; and 4) scope to increase payout, we expect an ~4-5% yield for PWON in FY26F. Key risks: sharper consumption downturn that impacts premium retail traffic, further FX depreciation, and unfavourable use of cash.

Fig. 1: PWON 1Q26 results summary

PWON, IDRbn	4Q24	1Q25	4Q25	1Q26	Q-Q %	Y-Y %	FY24	FY25	Y-Y %	% Ours	% Cons
Revenues	1,885	1,555	1,993	1,646	-17%	5.8%	6,671	7,111	6.6%	23%	22%
Property development	499	233	474	215	-55%	-8.0%	1,480	1,494	1.0%
Recurring income	1,386	1,322	1,520	1,431	-5.8%	8.3%	5,191	5,617	8.2%
Gross profit	1,053	857	1,106	941	-15%	10%	3,769	3,944	4.6%	23%	23%
Property development	284	137	258	126	-51%	-8.0%	878	816	-7.0%
Recurring income	768	720	848	815	-3.9%	13%	2,891	3,128	8.2%
EBIT	794	646	777	713	-8.2%	10%	2,901	2,944	1.5%	24%	23%
EBITDA	968	834	970	916	-5.5%	10%	3,584	3,708	3.5%	24%	23%
Core profit	606	457	661	504	-24%	10%	2,237	2,268	1.4%	20%	21%

Margins	4Q24	1Q25	4Q25	1Q26			FY24	FY25
GPM	55.9%	55.1%	55.5%	57.2%			56.5%	55.5%
Property Development	57.0%	58.6%	54.4%	58.7%			59.3%	54.6%
Recurring Income	55.4%	54.5%	55.8%	57.0%			55.7%	55.7%
OPM	42.1%	41.5%	39.0%	43.3%			43.5%	41.4%
EBITDA	51.4%	53.6%	48.7%	55.7%			53.7%	52.1%
NPM	21.9%	19.4%	31.1%	23.7%			31.1%	33.0%
Core Margin	32.2%	29.4%	33.1%	30.6%			33.5%	31.9%

Balance Sheet, IDRbn	4Q24	1Q25	4Q25	1Q26
Cash	9,154	9,536	5,186	5,109
Debt	6,436	6,608	5,575	5,648
Net Debt (Cash)	(2,718)	(2,928)	389	539
Equity	24,742	25,166	26,623	26,954

Net Gearing (x)	(0.11)	(0.12)	0.01	0.02
Debt to Equity	0.26	0.26	0.21	0.21
ROE	11%	11%	10%	11%

Source: Company data, Verdhana research

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.

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ANALYST CERTIFICATION
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Rating Table

Rating Remains	Buy
Target price Remains	IDR 480
Closing price 29 April 2026	IDR 328

Research Analysts

Gerald Hugo(gerald.hugo@verdhana.id)

Felix Justin(felix.wirianto@verdhana.id)

Tags: PROPERTY, Pakuwon Jati, PWON, PWON JK, PWON IJ, Gerald Hugo, Felix Justin

Pakuwon Jati (PWON IJ) (Buy) - Steady recurring assets growth

Steady recurring assets growth

Fig. 1: PWON 1Q26 results summary

Fig. 2: PWON gross profit trend – margin expansion by recurring income

Fig. 3: PWON gross profit trend – margin expansion by recurring income

Fig. 4: PWON segmental revenue growth – recurring continues steady growth

Fig. 5: Strong balance sheet opens room to capture accretive opportunities

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Pakuwon Jati (PWON IJ) (Buy) - Steady recurring assets growth

Fig. 1: PWON 1Q26 results summary

Fig. 2: PWON gross profit trend – margin expansion by recurring income

Fig. 3: PWON gross profit trend – margin expansion by recurring income

Fig. 4: PWON segmental revenue growth – recurring continues steady growth

Fig. 5: Strong balance sheet opens room to capture accretive opportunities

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