Stable results and in-line with our expectation
Both revenue and operating profit were in-line with our expectations as they met 78.05% and 80.5% of our FY17F numbers (Figure1), respectively. However, rising interest expenses and penalty charge on bonds redemption, has rather hurt PWON profitability. This resulted net income grew modestly by 8% YoY to IDR 1.4 tn, forming only 70.04% of our FY17F. Both revenue segments recorded positive growth as sales from condominiums and offices received IDR 1.63 tn in 9M17 (+57% YoY) while recurring income, which made up 48.95% of total revenues, rose by 14.33% YoY. In terms of QoQ achievement, we are somewhat disappointed with 3Q17 bottom line which slid by 5.7% to IDR 521.2 bn (vs. IDR 552.6 bn in 2Q17). Meanwhile, top line in 3Q17 was reported at IDR 1.43 tn which fell by -8.2% (QoQ). In our view, slower revenue recognition from property development (-19.9% QoQ) has negatively affected PWON’s top line performance. However, the decline was compensated by recurring income that performed reasonably well (+5.7% QoQ). Margin wise, both of gross and net profit margins saw a modest increase by +2% QoQ and +1% QoQ (Figure 1), respectively.