Valuation of Barito Group's Stocks Still Considered Premium

STOCK MARKET – JAKARTA. After a crazy rise last year, the movement of Barito Group's shares is now starting to tame. It is observed that several stocks such as PT Petrindo Jaya Kreasi Tbk (CUAN), PT Barito Renewables Tbk (BREN), PT Barito Pacific Tbk (BRPT), and PT Chandra Asri Pacific Tbk (TPIA) have started to correct.

For example, BREN shares have weakened by 26.32% to the level of Rp 5,600 since the beginning of the year or year-to-date (YtD). CUAN shares have also corrected by 33.06% YtD and BRPT shares have weakened by 24.55% since the beginning of the year.

However, the Head of Investment at Reswara Gian Investa, Kiswoyo Adi Joe, believes that the valuation of Barito Group's shares is still premium.

"Barito Group's shares are indeed famous for their premium valuations, such as BRPT and TPIA which have been priced high since long ago," Kiswoyo told Kontan.co.id, Tuesday (6/2).

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As an illustration, BREN shares are currently traded with a price to book value (PBV) ratio of 188.84 times, TPIA shares are traded with a PBV of 11.01 times, and CUAN shares with a PBV of 55.65 times.

However, among other Barito groups, PT Petrosea Tbk (PTRO) shares indeed have a cheaper valuation, where the PBV of PTRO shares is still smaller than other Barito issuers. Currently, the shares of this mining contractor issuer are traded with a PBV of 1.54 times.

Just so you know, PTRO shares will soon enter the umbrella of Prajogo Pangestu Group issuers. Because, CUAN plans to buy 342.92 million PTRO shares. This number represents approximately 34% of all shares placed and fully paid in PTRO.

Panin Securities analyst Rizal Nur Rafly also believes that the valuation of TPIA shares is still too expensive. According to Panin Securities' calculations, the fair valuation of TPIA is priced at EV/EBITDA 47 times, in line with the average regional peers.

The fair price of TPIA, considering the performance projection in 2024, is in the range of Rp 3,000 per share.

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Kiswoyo believes that investors who want to enter the Barito Group can use short-term trading strategies by taking advantage of the correction momentum.

The Head of Research at Kiwoom Securities Indonesia, Sukarno Alatas, also agrees that the majority of group shares under the umbrella of Prajogo Pangestu have a relatively expensive valuation.

Thus, for the short term, technically Sukarno sees BREN shares potentially heading to the resistance level of Rp 5,925, and BRPT shares have the opportunity to the level of Rp 1,080 to Rp 1,105.

As for PTRO, Sukarno believes investors can do trading buy at the level of Rp 5,550 - Rp 6,000, with the support level at Rp 4,930.