Contact our analyst Eka

27 December 2024

Price Rp 63

Investment Consideration 

New contracts in 11M24, 100% from external projects

•As of 11M24, WEGE secured a total of IDR 2.1 trillion new contracts, added more IDR 230 billion from 9M2024, IDR 1.87 billion. WEGE has  achieve 42% from 2024 target new contract of IDR 5 trillion.

•Majority of the new contracts are still dominated by the government of 58.6%. In terms of project ownership, most of the project come from external projects of 100%, showcasing WEGE’s independence from WIKA Group.

•Office projects dominate at 40.42%, mainly from BMKG building and banking office, followed by public facilities 31.40, and Residential  of 28.18%.

•Although the 2024 new contract target is difficult to achieve due to several shift in project work schedules, WEGE optimistic that there will be an additional of IDR 977 billion new contract in December 2024.

•For 2025, WEGE targeting IDR 3.5 Trillion new contracts.

3Q2024 Result: Triple digit growth bottom line

•As of 9M23, WEGE’s revenue declined-12.3% YoY to IDR 2.26 trillion, with 3Q24 decline -7.55% YoY. However, the 9M2024 bottom line recorded triple digit growth of +119% YoY to IDR 47.1 billion, with 3Q2024 101% YoY or +631% QoQ to IDR 28.5 billion.

•The increased mainly due to lower COGS by -7.58% YoY or -3.95% QoQ in 3Q2024, result higher GPM at 8.39% in line with technology used to reduce cost.

Site Visit: ITB Innovation Park Project

•In November we have visited ITB Innovation Park Project, a project from The ministry of Education, Culture, Research and Technology with Institute Technology of Bandung (ITB), involves WEGE as main contractor project worth IDR 426.8 billion. During a site visit WEGE has has been completed this project.

•WEGE’s scope of work includes 2 buildings, for structural work, architectural work, landscape work and MEP work.

•ITB Innovation Park is a high rise building and has the first basement in Gedebage, Bandung.

Three Million Houses Project

•Amid the start of the three million houses per year project in 2025, WEGE as one of the building construction companies proposed the construction of three million houses per year with the use of modular houses, which WEGE specializes

•Previously, the 3 million houses per year project will consist of vertical houses or flats and landed houses spread over 1,000 units in urban areas and 2,000 units in rural areas.

•The application of Modular construction methods  reduces project execution time by up to 50%.

•Although the use of modular will cost a little more than traditional construction, but because modular is an industrial product, the quality will be better and if mass produced, the cost will be cheaper.

•The program is expected to revive the property sector and the construction sector in particular.