Net profit up +20.7% YoY; YoY margins improved across all segments.  In 1Q25, MKPI reported revenue of IDR 635 billion, reflecting 11.0% YoY growth but 6.5% QoQ decline, on seasonality. The YoY expansion was driven by solid performances in office and land sales segments, with shopping mall rentals as the largest contributor, accounting for 50.8% of total revenues, followed by office rentals (11.3%) and apartment rentals (6.6%). Despite slight decline in hotel topline (-1.2% YoY), overall revenue growth remained resilient, primarily thanks to its rental business and land sales, which grew 9.8% YoY in 1Q25.

Solid aggregate 1Q25 recurring growth of 5.8% YoY on office rentals. Shopping mall rentals remained a key pillar for MKPI’s 1Q25 performance, growing 4.7% YoY to IDR 323 billion, though it saw slight dip QoQ. However, MKPI's office revenues were stronger rising 13.0% YoY, supported by sustained demand for office spaces in prime locations. This brought aggregate 1Q25 recurring growth of 5.8% YoY to IDR 486 billion. On a more negative note, hotel revenue fell 1.2% YoY, largely due to Ramadhan seasonality. The water park segment continued to struggle, with 1Q25 GPM worsening sharply from -14.9% in 1Q24 to -29.1%, on weak purchasing power and Ramadhan. Meanwhile, land and building sales recorded significant hike of 106% YoY, contributing 9.8% to total 1Q25 revenue, reflecting strong interest in MKPI’s premium real estate offerings.

2025 projects: connectivity and developments to drive long-term growth. In 2025, MKPI will focus on key developments to address growing demand and drive long-term growth, including Pondok Indah Townhouses, Cluster Aurelle Residences, and expansion of Pondok Indah Plaza 6. In addition, the company is also working on Lifestyle Mall at Lebak Bulus, Pondok Indah City Walk, and enhancing its mall-hospitality ecosystem with PIM-1 expansion, which includes a hotel and parking infrastructure. Additionally, MKPI plans to build a bridge to connect PIM-3 to Ranch Market, and launch Pondok Indah Residences 2 to meet rising demand for vertical living in prime locations.

Maintain BUY with TP of 32,000 (+37% upside) on 50% discount to RNAV. We reiterate our BUY rating on MKPI with target price of IDR 32,000, based on narrowing current RNAV from 64% to 50%. This reflects MKPI's low exposure to interest rate risks, as the company is a net cash entity, and the low proportion of development revenue contribution (3M25: 22.5%). Key downside risks to our call include slower-than-expected rental rate growth and low occupancy rates.