BREN and TPIA Have the Opportunity to Enter the MSCI Index

As a result, the Return on Invested Capital will be in the range of 3%-4% compared to 15%-20% in the period of cycle increase. The Price to book value (PBV) is also 7 times higher compared to peers in the ASEAN region with a book value below 1 time.

Meanwhile, BREN has reached an agreement to acquire 100% of the Sidrap Wind Power Plant (PLTB) with a capacity of 75 Megawatts (MW). However, this action will only generate additional revenue of less than 10% - 2% for BREN.

JP Morgan projects an increase in BREN's compounded annual growth rate (CAGR) capacity of 6% in 2023-2027. This estimate is not in line with an EBITDA profile that is above 100 times.

"We believe the risk/reward on owning the main portfolio, BREN, and TPIA, tends to be downward with EBITDA >100x without any significant changes in growth prospects, so we downgrade BRPT," Arnanto explained.

Considering these factors, Arnanto downgraded BRPT from Neutral to Underweight. However, JP Morgan still maintains its target price for BRPT at Rp 1,100 per share.

If Andreas maintains a Buy recommendation for BRPT shares with a target price of Rp 2,500 per share. This is in line with the potential for a decrease in stock prices that becomes an attractive opportunity.

Andreas explained that the price of BRPT shares has plummeted about 38% since December 2023 due to the negative sentiment of the temporary suspension of trading of PT Petrindo Jaya Kreasi Tbk (CUAN). Although CUAN is also owned by the owner of BPRT, Taipan Prajogo Pangestu, the two businesses are run separately.

The decline in the price of BRPT shares is seen as providing an attractive opportunity for investors because the shares are traded at a 107% discount to the SOTP valuation calculated by Sucor Securities at Rp2,500 per share. Note that SOTP also implies a 163% increase over the SOTP market value.

Meanwhile, Senior Technical Analyst at PT Samuel Sekuritas Indonesia Muhammad Alfatih observes that BRPT has been consolidating in the last 2 weeks. He suggests Trading Sell for BRPT with a target price of Rp 1,060 per share.

Technically, BRPT shares are expected to move in the range of support Rp 1,010 and resistance Rp 1,060 which tends to fall first. If it breaks below Rp 1,010, then next to the area of Rp 900.

“There is no positive momentum for BRPT yet, after the sharp decline previously,” Alfatih told Kontan.co.id, Thursday (25/1).