FAHLEVI THING

Plaza Indonesia Realty Tbk (PLIN)

As of 31 December 2024, Plaza Indonesia Realty Tbk (PLIN) owns and manages three core property portfolios, namely:

1. Retail Property: Plaza Indonesia Shopping Center
2. Hospitality Property: Grand Hyatt Jakarta
3. Office Property: The Plaza Office Tower

Plaza Indonesia is strategically located in the heart of Jakarta’s central business district, benefiting from superior accessibility and strong long-term demand fundamentals.

Financial Development Over the Past 10 Years

1. Balance Sheet Growth
In 2015, PLIN recorded Total Assets of IDR 4.671 trillion, Equity of IDR 2.406 trillion, and Liabilities of IDR 2.246 trillion. By 2024, PLIN’s balance sheet strengthened significantly, with Total Assets reaching IDR 12.768 trillion, Equity increasing to IDR 11.350 trillion, and Liabilities declining to IDR 1.418 trillion.

This substantial improvement reflects both corporate actions undertaken in 2019 and the adoption of fair value accounting for investment properties. Balance sheet expansion is not driven by organic cash flow growth, but primarily by the adoption of fair value accounting and asset restructuring related to the DIRE Simas Plaza Indonesia.

2. Establishment of DIRE Simas Plaza Indonesia (2019)
On 4 July 2019, DIRE Simas Plaza Indonesia was established and listed on the IDX. As part of the structuring, PT Plaza Indonesia Investama (PII) became the controlling shareholder of PLIN with a 95.37% ownership stake. PLIN divested subsidiaries to refocus on its three core assets.

3. Impact of Fair Value Accounting
Following the DIRE establishment, PLIN changed its accounting policy to the fair value model. Investment property value increased significantly from IDR 2.342 trillion in 2018 to IDR 10.822 trillion. However, the Net Asset Value (NAV) of DIRE Simas Plaza Indonesia has gradually declined from IDR 10.389 trillion (2019) to IDR 9.700 trillion (Nov 2025), reflecting valuation adjustments.

4. Profitability and Cash Flow Quality
PLIN’s reported net profit increased to IDR 997 billion in 2024. However, approximately IDR 476 billion of this resulted from fair value gains (non-cash). Operating cash flow has remained relatively stable (IDR 647 billion in 2015 vs IDR 699 billion in 2024), indicating that core cash-generating capability has not materially expanded despite balance sheet growth.

5. Corporate Strategy & 2024 Highlights
PLIN continues to focus on experience-based marketing and luxury positioning. In 2024, retail occupancy reached 84.13%, hotel occupancy improved to 56.58% following renovations, and office occupancy stood at 87.88%.

PLIN represents a textbook case of balance sheet expansion without commensurate cash flow growth. While asset quality is indisputable, economic value creation has plateaued. For equity investors, the key question is not “How valuable are the assets?” but rather: “How much incremental cash return can these assets still generate?” At present, the answer suggests stability, not acceleration.

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Pakuwon Jati Tbk (PWON)

PT Pakuwon Jati Tbk (PWON) stands out as one of the most structurally defensive property developers in Indonesia. Its business model—emphasizing high recurring income, conservative financial management, and disciplined expansion—differentiates PWON from its cyclical peers and underpins its long-term investment appeal.

1. Strong Cash Flow Stability Driven by Growing Recurring Income
PWON is widely recognized as the leader in recurring income within the Indonesian property sector. With a portfolio of "Superblocks" that integrate shopping malls, hotels, and offices, approximately 70%–75% of its total revenue is derived from recurring sources.

2. Industry-Leading Profitability and Operational Efficiency
PWON consistently records one of the highest net profit margins in the sector, often exceeding 30%–40%. This reflects superior operational efficiency and the premium nature of its assets, such as Gandaria City and Kota Kasablanka.

3. Strategic Focus on Hospitality and Retail Post-Pandemic
Recognizing the structural shift in the office market, PWON has pivoted toward the hospitality and retail sectors. The recovery in tourism and domestic consumption has led to record-breaking mall traffic and high hotel occupancy rates.

4. Attractive Valuation with a Margin of Safety
Despite its superior balance sheet and dominant market position, PWON often trades at a significant discount to its Net Asset Value (NAV), offering an attractive entry point for value investors.

5. Steady Earnings Recovery Towards Pre-Pandemic Levels
PWON has demonstrated a consistent upward trajectory in core earnings since 2021, driven by organic growth in rental rates and the full-year contribution of newly acquired assets.

6. Disciplined Expansion in High-Growth Regions
PWON pursues a "measured expansion" strategy. Key growth catalysts include the Pakuwon Nusantara mixed-use complex in IKN and new projects in Semarang & Batam.

7. Fortified Balance Sheet and Conservative Leverage
PWON maintains one of the healthiest balance sheets in the industry, characterized by a low Net Debt-to-Equity ratio, ensuring it can meet obligations while maintaining "dry powder" for opportunities.

8. Strategic Resilience and Opportunistic Acquisitions (2020–2023)
During the COVID-19 crisis, PWON executed high-profile acquisitions including Hartono Mall Yogyakarta, Hartono Mall Solo Baru, and Four Points by Sheraton Bali, funded primarily through internal cash.

Company Update September 2025 - PT Pakuwon Jati Tbk Results Presentation