INITIATE REPORT

MNC Sekuritas Research Division | July, 22 2021

PT Prodia Widyahusada Tbk (PRDA IJ)

Healthcare Industry

The Leading Healthcare Provider

BUY
Leading Clinical Laboratory with the Largest Lab Network Chain
Target Price : IDR 10,000 PRDA is the largest clinical laboratory with a revenue market share of 39.2% in Indonesia.
PRDA provides clinical laboratory services to diagnose and observe diseases as well as
other health conditions with more than 48 years of experience. Currently, PRDA has had
Stock Data the service network that incorporates 269 outlets across 127 cities and 34 provinces in
Indonesia. Since 2012, PRDA has been the only clinical laboratory in Indonesia accredited
Curent Price : 7,900 by the College of American Pathologists (CAP), the highest standard of excellence, and
the first clinical laboratory in Indonesia to receive NGSP certification for HbA1c testing as
52wk Range H-L : 9,225-2,710 well as SNI ISO 15189.
Share Outstanding : 937 mn
Focus on Digitalization and Seizing Opportunities from Covid-19
Free Float (%) : 25.00% Currently, PRDA is focusing on developing digital transformation and embracing future
healthcare, which has been included in the Company's strategic plan for the past few
Mkt Capitalization : 7,640 years. PRDA seeks to increase digitalization through the “Prodia Mobile” application,
(IDR bn)
which is expected to increase its capabilities in data management and business growth in
the future. On the other hand, PRDA also seized the opportunity through screening for
Covid-19 survivors by launching a service called the quantitative SARS-CoV-2 Antibody
Major Shareholders test (Spike-Receptor Binding Domain/Spike-RBD), which is to determine whether
immunity has been formed or requires adjustments from vaccinations. Moreover, PRDA
PT Prodia Utama 57.00% has opened the Vaccination of Mutual Cooperation program since June-2021.
Vaccination of Mutual Assistance is a program service of vaccination Covid-19 to the
employer/employee and family funding borne by the company. In the first phase of the
PT Bio Majesty 18.00% Vaccine Mutual Cooperation from May-2021 to 2022, PRDA has prepared 56 branches to
Pte. Ltd. distribute the vaccine.
Public < 5% 25.00%
Genomic test: Agility to Create Values
PRDA has carried out various examination developments and service innovations to
become a leader in next-generation technology in the laboratory and healthcare sector.
In 2019, PRDA developed a genetic-based examination, namely Prodia Genomics. The
Genomic Examination development includes: 1) NIPT-Prosafe to determine the risk of
chromosomal abnormalities in the fetus; 2) CArisk, a treatment plan that is likely to
reduce cancer risk; 3) DIArisk to assess a person's risk of diabetes; 4) TENSrisk to see the
risk of hypertension; 4) IMMUNErisk to detect a person's risk of 7 (seven) types of
diseases related to the immune system; 5) VASCULArisk which can detect the risk of
cardiovascular and cerebrovascular disease; 6) Prodia Nutrigenomics to identify
appropriate nutritional intake and types of exercise.

Recommendation BUY for PRDA with Target Price of IDR10,000

We initiate BUY for PRDA IJ with a target price of IDR10,000, which implied PBV FY21E/
FY22F at 3.98x/3.16x. We expect PRDA revenue to grow by 17.60% YoY in FY21E, as
demand for clinical laboratory tests increases, driving higher prices given its strong
competitive position. We see several risks that will occur such as unexpected-regulatory
change that can affect the business, especially the price cap for Covid checks and
regulations related to home service.

Key Financial Highlight

In Billion IDR FY18 FY19 FY20 FY21E FY22F
Revenue 1,599.76 1,744.27 1,873.38 2,203.16 2,531.10
EBITDA 245.05 296.68 383.31 550.17 631.05
Net Income 175.45 210.26 268.75 386.82 450.36
Research Analyst ROA (%) 9.09% 10.46% 12.04% 13.47% 12.62%
Muhamad Rudy Setiawan ROE (%) 11.23% 12.67% 15.03% 16.33% 15.08%
muhamad.setiawan@mncgroup.com EPS (IDR) 187.15 224.28 286.66 412.61 480.39
(021) 2980 3111 BVS (IDR) 1,666.31 1,770.24 1,907.52 2,526.43 3,184.56
Sources: Company , MNCS

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Company Profile
The Largest Company in The
Clinical Laboratory in
Indonesia
PT Prodia Widyahusada Tbk (PRDA) is a company engaged in the clinical
laboratory business, established in 1973 with more than 48 years of experience in
the healthcare services business. PRDA conducted an IPO on December 7, 2016,
by releasing 187.5 million shares. PRDA is the largest laboratory with a revenue
market share of 39.2% in Indonesia. PRDA operates a service network spread
across 127 cities and 34 provinces through 269 outlets, consisting of: 1) 148
clinical labs & PHC; 2) 106 POC outlets; 3) 11 Hospital labs; and 4) 4 Specialty
clinics. Since 2012, PRDA has been the only clinical laboratory in Indonesia
accredited by the College of American Pathologists (CAP), the highest standard
of excellence, and the first clinical laboratory in Indonesia to receive NGSP
certification for HbA1c testing as well as SNI ISO 15189.
Exhibit 01. Shareholder Structure

PT Prodia Utama Bio Majesty Pte. Ltd. Public

57% 18% 25%

Contract Research, therapy Distributor for

Research and banking of healthcare
Organization stem cell products

PTProdiaWidyahusadaTbk
Occupational In Vitro
Health Diagnostics Nationwide Outlet Network across Indonesia
Service (IVD) industry

In 2015,Prodiadisposed the 4 non-

core subsidiaries to ProdiaGroup,
in orderto focus on core clinical
lab business

Source: Company

Exhibit 02. Total Outlet PRDA in FY16-1Q21

Clinical Labs & PHC POC Outlets Hospital Lab Speciality Clinics
350

300 7 4
5
14 14 4 4
2 11
9 12 11
250

200 130 128 122 106

103
118

150

100

136 143 147 148 148

129
50

0
2016 2017 2018 2019 2020 1Q21

Source: Company

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Business Model
Strong relationship with
medical commodities supply
chain
Scalable hub and spoke
business model
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Exhibit 03. Market Share PRDA in FY18-FY19
2018 2019
Prodia
28.20% 26.90%
38.80% 39.20%
Next 5 Players (Kimia
farma, Pramita, Parahita,
Biomedika, Cito)
Other Independent Labs
33.00% 33.90%
Source: Company
PRDA provides clinical laboratory services for the diagnosis and observation of diseases
and other health conditions. The Company has four (4) regional reference laboratories
located in Jakarta, Medan, Surabaya and Makassar to optimize the observation of
specimens at the examination location more quickly and efficiently. PRDA has a
diversified customer base: 1) Individual patients; 2) Doctor's referral patients; 3)
Corporate inspection; 4) Referral to other hospitals/labs.
PRDA applies the hub and spoke business model, which currently has 4 hubs in Jakarta,
Medan, Surabaya and Makassar, while the number of spokes owned is around 148
branches. The spokes/branches carry out 300-400 types of routine tests, while at the
hubs, they carry out 800-850 types of tests, both routine and esoteric (advanced) tests. If
any esoteric checks are not carried out at the branch, the branch (spoke) will send
requests for esoteric tests to the nearest hub which operates 24/7. “Hub and spoke”
model offers a scalable platform reducing turnaround time and cost. Spokes facilitate
deeper penetration within the region, strengthening the brand and driving higher
volumes. Efficiency of a clinical laboratory improves with increasing test volumes making
automated tests less expensive and labs more cost-efficient.
Exhibit 04. Scalable Hub and Spoke Business Model PRDA
4 Referral Labs in Jakarta,
Surabaya, Medan, Makassar
Centralized information
Prodia Clinical Labs, Hospitals Prodia Referral with integrated IT
and Other Clinics may refer tests Lab Services platform that connects
to PRLS (PRLS) each lab to PRLS
Collection / Testing Testing
Our Regional Referral Labs
serves a 24/7 Operation to Fully
Prodia Clinical Labs & Accommodate Referral Needs
Clinics / Specialty Clinics from All Prodia Outlets Prodia Clinical Labs
External Walk-in Point-of-Care
Referrals Customers
Corporate Doctor Doctor
Digital platform for online
Clients Referrals registration & results Referrals
Source: Company
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PRDA has a comprehensive
service offering, providing a
one-stop service for clinical
laboratory testing in
Indonesia. Here are the six
main offerings that PRDA
provides:
Proactive scientific
marketing strategies
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Exhibit 05. Test services provided by PRDA
1) Generally performed on whole blood, serum, plasma
and other body fluids as well as specimens such as
microbiology samples–All Prodia laboratories perform
Routine testing routine tests, which usually take 2-4 hours to examine
2) Routine tests such as lipid profile, kidney and liver
function profile
1) Special clinical laboratory tests that are not routine are
generally carried out by experts and require more sophis-
ticated technology, equipment, and materials than normal
Esoteric Test routine tests
2) Esoteric tests such as hormone profiles and molecular
clinical laboratory tests for infectious diseases or cancer
1) Routine and esoteric testing
Reference Lab Services 2)Advanced molecular diagnostic tesing, chromatographic
mass spectrometry, anatomic and immunological
pathology, and flow cytometry
1) Offered in several Prodia clinical laboratories
Non-Laboratory Testing 2) Electrocardiogram, X-ray, audiometry, spirometry,
ultrasound and treadmill examination
1) Basic health check-up services are available at every
Prodia branch
General health check-up
2) Consists of pre-and post-test doctor consultation
services, as well as home collection services
1) Develop specialized clinical facilities that focus on a
particular field of medicine or a particular type of
customer, with general medical services and advice
Special clinic tailored to the specific needs of customer segments
2) Specialty clinics include: Child Health Center, Women's
Health Center, and Senior Health Center.
Source: Company
PRDA has a team of more than 500 marketing personnel and laboratory information
services who carry out various marketing activities to reach the general public, doctors
and companies. This effort is supported by PRDA's long engagement with the medical
community. PRDA engages with the medical community, not only through traditional
advertising and marketing, but through scientific marketing activities including
supporting physicians and their research in the field of clinical laboratory medicine,
holding seminars and other marketing activities to educate physicians, hospitals,
companies and the general public on issues health and benefits of clinical trials as well
as educating and collaborating with physicians in the development and implementation
of tests.
Exhibit 06. PRDA Collaboration Strategy with the Medical Community
Strong relationships through the work of more Introduced new tests, such as NIPT ProSafe, Amino Acid Profile,
than 500 Marketing and Laboratory Fatty Acid Profile, CArisk, DIArisk, Liquid biopsy EGFR Mutation, New
Information Service personnel Born Screening, 17OH Progesterone & PKU
Quality Service New Test Introduction
Ongoing Referrals Research Collaboration
Received referrals from Entered into agreement with 38 institutions: 36
>39,000 doctors in 1Q2021 Faculty of Medicines, 1 Institution in Science and
(increased by 12% vs. 2020) Tech. and 1 Faculty of Pharmacy at leading
Universities in Indonesia for collaboration on
research and education
Source: Company
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What’s Next? Currently, PRDA is focusing on developing digital transformation or embracing future
healthcare, which has been included in the Company's strategic plan for the past few
years. PRDA seeks to increase digitization through the “Prodia Mobile” application,
which is expected to increase its capabilities in data management and business growth
in the future. This digital implementation is a form of service to customer needs/
customer experience, especially in responding to customer needs for Covid-19
examinations. PRDA also continues to increase the number of outlets, which are planned
to add 1-2 clinical labs, 20 POC outlets, 1-2 hospital labs and 1 specialty clinic which will
start in 2021.

Exhibit 07. Digital Transformation by PRDA

Source: Company

Exhibit 08. Customer Centric Model by PRDA

eRegistration New Innovation & Enhancement

Prodia in your Car
Service

Prodia Home
Customer Service
Centric

Tele-Consultation
Tele-Radiology

• General Practitioners
• Clinical Pathologists
Tele-Health* • Internist
• Clinical Nutritionist
• Sport Medicine

Source: Company

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Industry Outlook The existence of three new variants of the Covid-19 virus (alpha, beta, delta variants)
increase the spread which resulting in Indonesia entering the Wave II/Second wave.
Indonesia is in Wave II of
Starting with daily cases increasing on June 1, 2021 by 4,824 cases/day to a record high
Covid-19
more than 50,000/day in Indonesia with an average daily test rate of 75,000/day (as of 1
June-6 July 2021). Thus, the government imposes restrictions on emergency micro-scale
activities (PPKM darurat) on 3-20 July 2021. On the other hand, vaccinations in Indonesia
are continuously increasing, where currently only 36 million had received the first dose
and 15 million for the second dose (as of 12 July 2021) from the planned target of 181
million vaccinations with an average daily vaccination level of 360,000/day (as of 11 July
2021).

Exhibit 09. Trend of Total Cases and Daily Cases in Indonesia

Total Cases (lhs) New Cases/day (rhs)

3,000,000 45,000
40,000
2,500,000
35,000
2,000,000 30,000
25,000
1,500,000
20,000
1,000,000 15,000
10,000
500,000
5,000
- -
Sep-20

Feb-21
Aug-20

Jan-21
Jul-20

Jul-21
Oct-20
Mar-20

Mar-21
Jun-20

Dec-20

Jun-21
Apr-20

Nov-20

Apr-21
May-20

May-21
Sources: Ourworlddata.org, MNCS

Exhibit 10. Trend of Vaccinated in Indonesia

lhs
Total Vaccinated (lhs) Full Vaccinated (lhs) New Vaccination (rhs) rhs
40,000,000 1,600,000

35,000,000 1,400,000

30,000,000 1,200,000

25,000,000 1,000,000

20,000,000 800,000

15,000,000 600,000

10,000,000 400,000

5,000,000 200,000

- -

Sources: Ourworlddata.org, MNCS

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Gradual Public Awareness
toward the Importance of
Healthcare
Indonesia's Growing Middle
Class Presents Opportunities
in Healthcare Sector
www.mncsekuritas.id
The existence of Covid-19 raises public awareness of the health system and quality in
Indonesia. Although household spending decreased by -2.23% YoY in 1Q21 (vs 2.83%
YoY in 1Q20), the health and education component grew by 0.31% YoY in 1Q21, or one
of the two components that saw an increase in 1Q21. We assess that people's
consumption patterns are shifting to the health component as a new habit, so that
people are increasingly prioritizing health consumption. More people are enrolled in the
National Health Insurance ("JKN") program followed by the rising income leading them
to access personal or other forms of health insurance. Thus, there will be an increased
demand for quality health services and faster disease screening. Rising income levels
and accessibility of healthcare services combined with increasing incidence of
communicable and non-communicable diseases, such as cardiovascular disease, cancer
and diabetes, are expected to drive the clinical laboratory testing market. This is because
clinical laboratory testing plays a central role in health care, which can provide
information in overall medical decisions.
Exhibit 11. Trend of JKN Members in FY14-FY20 (in million)
250
224 222
208
200 188
172
157
150 133
100
50
-
2014 2015 2016 2017 2018 2019 2020
Source: BPJS
The World Bank and IMF predict that in FY24F, Indonesia will become the fifth-largest
economy in the world. The majority of Indonesia's income will come from the middle
class, which is expected to drive demand for affordable healthcare. The increase in the
middle class will be followed by an increase in unhealthy consumption patterns. Data
shows that in 2018, the percentage of smoking among Indonesian youth increased to
9.1% (vs. 7.2% in 2013), and consumption of vegetables and fruits decreased in 95.5% of
adults. In addition, 33.5% of people lack physical activity, 29.3% of adults smoke daily,
31% are centrally obese, while 21.8% are obese. The lifestyle of the Indonesian people
today will cause more lifestyle-related diseases, such as cardiovascular, tuberculosis, and
cancer. Hypertension and stroke lead to the highest death rate, with prevalences of
34.1% and 10.9%, respectively in 2018. WHO estimates that by 2030, lifestyle-related
diseases will be the main cause of 87% of deaths. Indonesia has the potential to lose
USD4.4 trillion from 2012 to 2030 due to the impact of chronic or “non-communicable”
diseases (NCDs).
Sales of medicines and hospitalizations are the main contributors to the hospital
business, although some hospitals have laboratory facilities. However, with lower
intensity compared to drugs and inpatient care, hospitals prefer to refer to other clinical
laboratories to grow in the private laboratory business in Indonesia.
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Exhibit 12. Cause of Ilnes on Indonesia’s Citizen

Obesity Central lack of consumption of vegetables and fruit Smoker

180
160
140 36.3 29.3
120 34.7
% 100
80 95.5
93.5
60 93.6
40
20
26.2 31
14.4
0
2007 2013 2018

Sources: Ministry of Health, MNCS

Exhibit 13. Type of Disease with the Highest Mortality in Indonesia

40.0%
34.1%
35.0%
30.0%
25.0%
20.0%
15.0% 10.9%
8.5%
10.0%
3.8%
5.0% 1.8%
0.0%
Hypertension Stroke Diabetes Mellitus chronic renal Cancer
failure

Sources: Ministry of Health, MNCS

Clinical laboratories in
Indonesia are dominated by
private ownership
Clinical laboratory refers to a center where tests are performed on clinical specimens to
obtain information about a patient's health-related to the diagnosis, treatment and
prevention of disease. Clinical laboratory testing can be done in many places, such as
hospitals, clinics, and independent laboratories. The clinical laboratory testing market is
segmented into the public and private sectors. The private sector consists of hospital
laboratories, independent laboratories and clinics. However, most tests are outsourced to
private independent clinical laboratories, either through a doctor's referral or by referring
samples that have been collected on site. In 2019, the private sector owned most clinical
laboratories, which was 1,056 laboratories or 81.7%. The second-largest ownership of
clinical laboratories is district/city government laboratories, with 206 laboratories or
15.9%. The third-largest ownership is owned by the provincial government, which are 27
laboratories or 2.1%. Hence, the Ministry of Health owned 4 laboratories translating to
0.3% ownership.

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Exhibit 14. Ownership of Health Laboratories in Indonesia

0.30% 2.10%

15.90%

Ministry of Health
Provincial Government
District Government
Private

81.70%

Source: Ministry of Health, MNCS

Investment Thesis PRDA will continue to focus on creating the most complete and up-to-date clinical
laboratories in Indonesia, both routine and advanced, to support better health diagnoses.
PRDA will focus on Along with health awareness, the demand for laboratory examinations is increasing,
becoming the largest especially amid the pandemic. Currently, PRDA is able to conduct 56 Health clinical trials.
Clinical laboratory PRDA cooperates with more than 1,500 hospitals that send samples to PRDA, both
private hospitals, chain hospitals and government hospitals. PRDA continues to strive to
increase market share in Indonesia. Currently, the independent market lab is around IDR5
trillion and PRDA has 39.2% market share of the total market. In addition to digitization,
PRDA plans to launch a minimum of 10 new types of tests every year, such as: 1)
Launching Health Genomics, Bone, Muscle & Joint Genomics, and Skin and Hair
Genomics; 2) Conducted more than 1,000,000 Covid-19 tests (PCR and Antibody Tests);
and 3) Launched Immunohistochemical Testing for Lymphoma Cancer. We believe that
these three combinations will be a positive catalyst for PRDA in the future.

Exhibit 15. Number of tests Clinically PRDA

Predictive, Preventive & Screening Targeted

Diagnostic Pharmacogenomics
Therapy
1. NIPT (ProSafe) 26. ADMA/SDMA 31. Jak2 Mutation 45. Jak 2 Mutation 55. Warfarin Indiv Test
2. Telomere Analysis 27. Prodia Skin and 32. Kidney Stone Analysis (FTIR) 46. Mutation EGFR (CYP2C9 & VCORC1
3. Vitamin A & E Hair Genomics 33. AMA & ASMA IF 47. Mutation EGFR ctDNA genotype)
4. ProHealthy Gut (GCMS) 28. SARS-CoV-2 Ag 34. CT/NG RT PCR (Geneexpert) 48. Estrogen Receptor 56. CYP2C19
5. Varicella Zoster IgG 29. Anti SARS-CoV-2 35. MTB/MOTT-DNA PCR 49. Progesteron Receptor
6. Fenilalanin Neonatus Quantitative 36. Fragmentation of DNA 50. HER2/neu
7. 17-OH Progesteron 30. Cortisol Urine Sperm 51. Ki67
Neonatus 37. Rotavirus Antigen 52. BCR ABL (Geneexpert)
8. CA Risk 38. Anti-AChR Binding 53. Ultrasensitive Mutation
9. DIArisk 39. ANCA IF EGFR ctDNA (T790M)
10. Prodia Nutrigenomics 40. Lymphoma Panel 54. Oncoprecise
11. VASCULArisk 41. SARS-CoV-2 RNA
12. Nutrition Panel (Urine) 42. Analysis of Gallstones (FTIR)
13. Toxic Panel (Urine) 43. Systemic Scelrosis Profile
14. Amino Profile – 19 44. Interleukin -6 (IL-6)
15. Vitamin B1 & B6 45. Blood Chromosome
16. Rasio s-Flt1/PlGF Analysis (G-Banding)
17. NBS Amino Acid
18. TENSrisk
19. IMMUNErisk
20. Prodia PULS Cardiac
Marker
21. Expanded Lipid Profile
22. Prodia Wellness Genomic
23. Prodia Muscle Bone
Genomic
24. Anti SARS-CoV-2 IgM/IgG
25. Anti SARS-CoV-2

Source: Company

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Genomic test: Agility to
Create Values
PRDA has carried out various examination developments and service innovations to
become a leader in next-generation technology in the laboratory and healthcare sector. In
2019, PRDA developed a genetic-based examination, namely Prodia Genomics. The
Genomic Examination development includes: 1) NIPT-Prosafe to determine the risk of
chromosomal abnormalities in the fetus; 2) CArisk to determine risk factors for cancer; 3)
DIArisk to assess a person's risk of diabetes; 4) TENSrisk to see the risk of hypertension; 4)
IMMUNErisk is able to detect a person's risk of 7 (seven) types of diseases related to the
immune system; 5) VASCULArisk which can detect the risk of cardiovascular and
cerebrovascular disease; and 6) Prodia Nutrigenomics to identify appropriate nutritional
intake and types of exercise. Therefore, it is highly recommended to observe a person's
genome from the data set that is closest to their racial group. While global genomic
studies have advanced, Southeast Asia is still lagging. This knowledge gap is what Prodia is
trying to fill.
We consider this strategy to be quite good, given the prevalence of Indonesian public
health behaviors. Although genomic testing is a new business that contributes 4% to 5% of
total revenue, management targets the contribution to increase to 25% in the next 4 years.
We see the segmentation will focus on middle-up income with ASP in the range of IDR7
million-IDR20 million/test and not covered by BPJS. Given the much higher ASP than other
tests, this leaves room for management-adjustable margins.

Exhibit 16. PRDA laboratory technology concept

Research Evaluation
Laboratory Laboratory

Mass
Spectrometr y & Molecular
Separation Next Generation Diagnostic
Science Laborator y
Laboratory Laboratory
Anatomical Advance
Pathology Immunology
Laboratory Laboratory

Source: Company

Exhibit 17. PRDA genomics service promotion

Source: Company

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Covid 19 a ‘Blessing in The Covid-19 outbreak has also become a "blessing in disguise" due to several factors,
Disguise’ especially for testing kit in which PRDA is using automatic Cobas6800 for Covid-19
RT-PCR testing. On the other hand, PRDA also seized the opportunity through screening
for Covid-19 survivors by launching a quantitative SARS-CoV-2 Antibody test (Spike-
Receptor Binding Domain/Spike-RBD) is to determine whether immunity has been
formed or requires adjustments from vaccinations. Moreover, PRDA has opened the
Vaccination of Mutual Cooperation program since June-2021. Vaccination of Mutual
Assistance is a program service of vaccination Covid-19 to the employer/employee and
family funding borne by the company. In the first phase of the Vaccine Mutual
Cooperation from May-2021 to 2022, PRDA has prepared 56 branches to distribute the
vaccine. The government has set the price for a complete dose of vaccine at IDR879k/
person, the price is determined through the Decree of the Minister of Health number
HK.01.05/MENKES/4643/2021. We assess that the "gotong royong" vaccine will have a
positive impact on PRDA, due to the potential to increase the volume of patients during
the vaccine distribution period.

Exhibit 18. PRDA Gotong Royong Vaccination Promotion

Source: Company

Potential revenue from PCR/
antigen test to total PRDA
revenue in FY21E
Currently, the government has set an upper limit on the price of PCR and rapid antigen at
IDR900k/test and IDR250K/test, respectively. In 1H21 PRDA has served 630,000 tests, so if
we annualized there would be 1.26 million tests in FY21E (vs 1 million tests in FY20).
However, with the current business competition, quite a few other companies offer prices
for PCR at the level of IDR900k/test and rapid antigen IDR150k/test. We tried to do a
simple calculation to see the contribution of PCR and rapid in PRDA, which resulted in the
lowest scenario at IDR378 billion to the highest scenario at IDR929 billion in FY21E. These
also calculate the portion disbursement between 25%-75% for each type carried out, and
potentially contributes 17%-42% to total revenue in FY21E.

Exhibit 19. Scheme of PCR and Antigen test to Total Revenue PRDA in FY21E

PCR and Rapid Test with Scheme ASP at level IDR900k/test (PCR) and IDR250k/test (Rapid)
PCR 75% 851 PCR 50% 567 PCR 25% 284
Rapid 25% 79 Rapid 50% 158 Rapid 75% 236
Total (IDR Bn) 929 725 520

PCR and Rapid Test with Scheme ASP at level IDR750k/test (PCR) and IDR150k/test (Rapid)
PCR 75% 709 PCR 50% 473 PCR 25% 236
Rapid 25% 47 Rapid 50% 95 Rapid 75% 142
Total (IDR Bn) 756 567 378
Sources: various Sources, MNCS

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Integrated Healthcare
Providers, benefiting PRDA
Better margin ratio than
peers, due to independence
on the payment side
Although PRDA has a digital platform since 2018, PRDA has also collaborated with other
telemedicine platforms such as HaloDoc, one of the big players in this industry. We
believe that this integration will provide good benefits for PRDA to rising patient volume
and reducing marketing costs. Telemedicine should play a key role in the future of the
healthcare business, in our view. WHO defined telemedicine as health services provided
by health workers using information and communication technology to diagnose, treat,
prevent, and evaluate the health condition of someone who is in a position far from
health facilities. Currently PRDA has collaborated, including with: 1) HaloDoc; 2)
AloDokter; 3) Grabhealth; 4) GoodDoctor; 5) Traveloka; 6) Tiket.com
In the financial section, we compare the EBITDA margin and net profit margin of PRDA
vs. 3 hospitals and 3 healthcare in Indonesia in the 2018-2020 period. PRDA is able to
increase its EBITDA margin and net profit margin above the average in 2019-2020 due to
efficiencies related to equipment rental and promotion, this is because management is
trying to digitize, which will have an impact on cost efficiency. In addition, the relatively
low capital intensity compared to hospitals resulting in better cash flow and return
ratios due to payments methods do not come from BPJS which usually require a longer
payback period. On the other hand, the healthcare and hospital sectors have increased
in line with the Covid-19 pandemic, due to positive financial reports and also healthcare
industry needed during the pandemic.
Exhibit 20. PRDA vs Peers

2018 2019 2020

No Ticker EBITDA Net Profit EBITDA Net Profit EBITDA Net Profit
Margin Margin Margin Margin Margin Margin
1 PRDA 16.02% 10.97% 17.01% 12.05% 26.83% 14.35%
2 SILO 11.56% 0.27% 6.06% -4.83% 16.69% 1.63%
3 HEAL 19.27% 4.07% 22.31% 7.03% 30.27% 10.72%
4 MIKA 33.71% 22.61% 34.41% 22.78% 37.85% 24.62%
5 KAEF 14.75% 5.81% 8.94% -0.14% 9.37% 0.18%
6 KLBF 17.44% 11.66% 16.92% 11.08% 17.96% 11.83%
7 INAF 3.65% -2.06% 5.17% 0.59% 4.47% 0.00%
Average 16.63% 7.62% 15.83% 6.94% 20.49% 9.04%
Sources: Company, Bloomberg, MNCS

Revenue has the potential to
grow double digits in FY21E
We expect PRDA revenue to grow by 17.60% YoY in FY21E, driven by increasing demand
for clinical laboratory testing and higher prices given its strong competitive position. Key
drivers include year-on-year growth in number of tests, number of tests per customer
visit and revenue per visit assuming our ASP blended at IDR654k/person. In addition, the
existence of self-vaccination and telemedicine also has the potential to be a catalyst for
increased patient visits in FY21E.

Exhibit 21. Trend and forecasting of revenue and Volume Patient PRDA in FY17-FY22E

Revenue in IDR bn(lhs) Patient visits in million (rhs)

3,000 4.00
3.50
2,500
3.00
2,000
2.50
1,500 2.00
1.50
1,000
1.00
500
0.50
- -
2017 2018 2019 2020 2021E 2022E

Sources: Company, MNCS

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Exhibit 22. Trend and forecasting of Average Selling Price PRDA in FY17-FY22E

700,000

680,000

660,000

640,000

620,000

600,000

580,000

560,000

540,000
2017 2018 2019 2020 2021E 2022E

Sources: Company, MNCS

Manageable debt exposure
and dividend in the long run
PRDA has regularly distributed dividends with an average DPR level of 53% proving
PRDA's strong business position. Furthermore, we believe PRDA will maintain its financial
condition and ratios with the company's solvency ratio is relatively stable with a DER level
of 0.02x and recorded net-cash at the level of IDR1.09 trillion in FY20. Therefore, we
expect management to be able to maintain its leverage, with DER level in FY21E/FY22F of
0.02x. Manageable debt exposure should encourage superior margins in the future.

Exhibit 23. Trend of Dividend Payout and Dividend/share PRDA in FY18-FY20

Dividend Payout Ratio (%) Dividend/share (IDR)

62% 172 200

60%
58% 60% 150
56% 112
54% 94
100
52%
50%
48% 50% 50% 50
46%
44% -
2018 2019 2020

Sources: Company, MNCS

Exhibit 24. Trend of DER and Net-cash in FY18-FY22F

DER (x) Net Cash (IDR Bn)

0.03 0.03 2,500

0.02
0.02 1,982.41
0.03 2,000
0.02
0.02
1,500
0.02 0.01 1,498.92
1,000
0.01 1,090.65
992.64
895.65
0.01 500

- 0
FY18 FY19 FY20 FY21E FY22F
Sources: Bloomberg, MNCS

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Exhibit 24. Financial Summary

Income Statement Balance Sheet

IDR Billion FY18 FY19 FY20 FY21E FY22F IDR Billion FY18 FY19 FY20 FY21E FY22F

Revenue 1,599.76 1,744.27 1,873.38 2,203.16 2,531.10 Cash and cash equivalents 937.48 1,011.85 1,134.54 1,552.01 2,043.03

Cost Of Revenue (656.95) (703.26) (827.15) (837.20) (987.13) Trade Receivables 164.54 147.03 139.43 163.98 188.38

Gross Profit 942.81 1,041.01 1,046.22 1,365.96 1,543.97 Inventory 33.97 32.65 68.20 69.03 81.39

Other Current Assets 66.10 62.82 17.84 20.98 24.10

Operating Expenses (774.23) (824.96) (744.46) (925.33) (1,050.41) Total Current Assets 1,202.10 1,254.35 1,360.01 1,806.00 2,336.91

Operating Profit 132.48 168.58 216.05 301.76 440.63 Fixed Assets - net 519.81 517.91 567.93 708.40 820.91

Other Non-Current Assets 208.48 238.71 304.11 357.64 410.88

Finance Cost (5.89) (3.32) (5.16) (9.18) (10.48) Total Non-Current Assets 728.29 756.62 872.04 1,066.04 1,231.79

Finance Income 47.67 52.07 42.48 52.07 79.87 TOTAL ASSETS 1,930.38 2,010.97 2,232.05 2,872.04 3,568.69

Profit Before Income

221.69 264.80 339.08 483.53 562.95 Trade Payables 109.69 106.62 166.23 168.25 198.38
Tax

Short-term Debt 22.52 10.64 21.98 25.85 29.70

Income Tax Expenses (46.24) (54.54) (70.33) (96.71) (112.59) Other current liabilities 32.08 26.30 21.94 33.22 38.16

Profit of the Year 175.45 210.26 268.75 386.82 450.36 Total Current Liabilities 164.28 143.55 210.16 227.32 266.24

Long-term Debt 19.32 8.57 21.92 27.24 30.92

Net Profit 175.45 210.26 268.75 386.82 450.36 Other Long-term liabilities 184.61 199.25 211.68 248.95 286.00

Total Long-term
203.93 207.81 233.60 276.19 316.92
Liabilities

EPS 187.15 224.28 286.66 412.61 480.39 Total Equity 1,562.17 1,659.60 1,788.30 2,368.53 2,985.53

Cash Flow Ratios

IDR Billion FY18 FY19 FY20 FY21E FY22F Ratio FY18 FY19 FY20 FY21E FY22F

Net Income 175.45 210.26 268.75 386.82 450.36 Growth Year on Year

Depreciation 76.47 80.63 81.54 109.53 137.49 Revenue Growth 9.12% 9.03% 7.40% 17.60% 14.88%

Change in Working
(16.48) 15.76 31.66 (23.35) (6.64) Gross Profit Growth 10.46% 10.42% 0.50% 31.21% 13.03%
Capital

Change in others (57.87) (2.50) 40.62 8.14 1.82 Operating Profit Growth 27.25% 28.16% 39.67% 103.95% 12.01%

CFO 177.57 304.15 422.58 481.14 583.03 Net Income Growth 16.35% 19.84% 27.82% 83.97% 16.43%

Capital Expenditure (186.00) (78.73) (131.57) (250.00) (250.00) Profitability

Others 65.60 (30.23) (65.40) (53.53) (53.23) GPM 58.93% 59.68% 55.85% 62.00% 61.00%

CFI (120.41) (108.96) (196.97) (303.53) (303.23) OPM 10.54% 12.39% 16.11% 20.00% 19.50%

EBITDA Margin 15.32% 17.01% 20.46% 24.97% 24.93%

Dividend Paid 60.32 87.73 105.13 193.41 166.63 NPM 10.97% 12.05% 14.35% 17.56% 17.79%

Net Change in Debt (19.78) (22.63) 24.69 9.19 7.53 ROA 9.09% 10.46% 12.04% 13.47% 12.62%

Equity Fund Raised - - - - - ROE 11.23% 12.67% 15.03% 16.33% 15.08%

Others (111.96) 14.63 12.44 37.26 37.06

CFF (71.42) 79.73 142.26 239.87 211.22 DER (x) 0.03 0.01 0.02 0.02 0.02

Net Cash Increase (14.25) 274.92 367.87 417.47 491.02 Current Ratio (x) 7.32 8.74 6.47 7.94 8.78

Closing Balance 937.48 1,011.85 1,134.54 1,552.01 2,043.03 Quick Ratio (x) 7.11 8.51 6.15 7.64 8.47

Sources: Bloomberg, MNCS

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