Alam Sutra Realty(ASRI IJ)

Transcription

1 Equity Research Company Update Tuesday,18 July 2017 HOLD Maintain Last price (IDR) 322 Target Price (IDR) Rp380 Upside/Downside +18.8% Previous Target Price (IDR) Stock Statistics Sector Bloomberg Ticker Rp380 Property ASRI IJ No of Shrs (mn) 19,649 Mkt. Cap (IDR bn/usdmn) 6,288/473 Avg. daily T/O (IDR bn/usdmn) Major shareholders n/a/n/a Tangerang Fajar Industrial Estate 25.2% Manunggal Prime Development 18.7% Estimated free float (%) 48.1 EPS Consensus 2017F 2018F 2019F Danareksa Consensus Danareksa/Cons 35.9 (3.7) 52.5 ASRI relative to JCI Index Alam Sutra Realty(ASRI IJ) Steady progress but challenges remain We reiterate our HOLD call on ASRI with an unchanged target price of IDR380. Although convinced that ASRI will achieve our marketing sales target thanks to CLFD land plot sales, we do not see any catalysts that will boost the marketing sales further, especially given the impact of potential cannibalism from CFLD with its Lavon Swan City and the abundant supply of property in the secondary market in the vicinity of Suvarna Sutera. ASRI recorded marketing sales of IDR895bn in 1H17 Compared to the marketing sales recorded in 1H16, the marketing sales in 1H17 were down by 7.4%yoy, mainly due to the poor performance of the Alam Sutera area. Last year, ASRI recorded marketing sales of IDR561bn in 1H17 from the Alam Sutera area, supported by the successful launch of the Leora cluster (with 100 units sold). Nonetheless, this year, ASRI only managed to sell 32 units from the Victoria and Orlando clusters. Excluding the one-off event, ASRI is on track to meet our target We expect ASRI to record marketing sales of IDR3.0tn this year (-12.0%yoy). Our marketing sales target includes land sales to CFLD of IDR1.0tn that are expected to be realized in the last quarter of Should we strip out this oneoff event, ASRI has achieved 45.2% of our 1H17 marketing sales target - INLINE. We maintain our marketing sales target for ASRI. CFLD to aggressively offer its products CFLD has started to collect reservation numbers for its three clusters at Lavon Swan City, namely Allura, Gracia, and Enchanta, with 1,032 units for sale in total. Based on our channel check, reservations for the Allura units (the first cluster with price tickets of IDR720-1,020mn/unit) have reached 90%. Meanwhile, reservations for Gracia (the second cluster with price tickets of IDR755-1,145mn/unit) have reached 75%. Lastly, reservations for Enchanta for which units only started to be offered early this week (with price tickets starting from IDR1bn) reached 13%. The product launch will be conducted in September Coupled with the abundant supply of property in the secondary market, we believe the sale of these clusters will hamper sales at Suvarna Sutera. Maintain HOLD with an unchanged target price We maintain our HOLD call with an unchanged target price of IDR380 (SOTP based valuation with WACC of 12.1%, Terminal Growth of 4.0% and 70% discount to NAV). Although ASRI trades at a higher NAV discount than its peers Source : Bloomberg (ASRI: 74.8% vs. its peers of 47.5%-67.0%), we believe the discount is warranted given the stock s high gearing in addition to the inventory risk from its high-rise projects. Antonia Febe Hartono Key Financials (62-21) ext.3504 Year to 31 Dec 2015A 2016A 2017F 2018F 2019F antonia.hartono@danareksa.com Revenue, (Rpbn) 2,784 2,716 3,749 3,427 5,341 Natalia Sutanto EBITDA, (Rpbn) 1,706 1,177 1,551 1,337 2,324 EBITDA Growth, (%) (13.8) (31.0) 31.7 (13.8) 73.9 (62-21) ext.3508 Net profit (Rpbn) ,128 1,027 1,892 natalia.sutanto@danareksa.com EPS (Rp) EPS growth (%) (45.6) (14.7) (9.0) 84.3 BVPS, (Rp) DPS, (Rp) (6.5) (14.3) (13.1) PER (x) PBV (x) Dividend yield (%) (1.8) (4.1) (3.7) EV/EBITDA (x) See important 8.0 disclosure 11.5 at the back 8.3 of this report

2 Looking for 8-10% land price increases in 2H17 In 1H17, ASRI did not increase its land selling prices which stood at IDR11.9mn/sqm (in Alam Sutera) and IDR3.8mn/sqm (in Suvarna Sutera). Going into 2H17, ASRI expects to increase its land selling prices by 8-10% should property demand improve. Nonetheless, we remain skeptical and expect a more modest price increase of 3-4%. 20% rental adjustment for Mall Alam Sutera Starting next year, ASRI expects to hike rental rates at Mall Alam Sutera by 20% some five years after its commencement. With NLA of 68,000sqm, we estimate this move will result in additional rental revenues of IDR20bn and 12.1%yoy rental revenues growth in No product launches in July 2017 ASRI stated that it did not have any plans to launch new products in July With the expectation of one project launch every quarter, the nearest product launch will take place in August Nonetheless, the company has not disclosed any details regarding the upcoming project launches. Exhibit 1. Price ticket comparison of CLFD and Suvarna Sutera Developer CFLD ASRI Cluster Allura Gracia Enchanta Chiara Price ticket (after VAT) IDR720-1,110mn/unit IDR785-1,145mn/unit IDR1,000mn/unit* IDR1,184-1,820mn/unit Land size ranges sqm sqm 84sqm sqm Building size range 79-93sqm 79-93sqm 101sqm sqm Construction cost IDR5mn/sqm IDR5mn/sqm IDR5mn/sqm IDR6mn/sqm Premium/ (16.7%) (16.7%) (16.7%) (discount) to ASRI Land price IDR mn/sqm IDR mn/sqm IDR5.9mn/sqm IDR3.8mn/sqm Premium/ (discount) to ASRI 28.9%-42.1% 28.9%-42.1% 28.9%-42.1% *indicative pricing provided by CFLD s inhouse sales Source: ASRI, Danareksa Exhibit 2. Visit to Lavon Swan City See important disclosure at the back of this report 2

3 Source: Danareksa See important disclosure at the back of this report 3

4 Exhibit 3. Income Statement Revenue 2,784 2,716 3,749 3,427 5,341 COGS (728) (1,251) (1,871) (1,759) (2,619) Gross profit 2,056 1,465 1,878 1,668 2,723 EBITDA 1,706 1,177 1,551 1,337 2,324 Oper. profit 1,628 1,096 1,471 1,256 2,249 Interest income Interest expense (159) (226) (289) (300) (298) Forex Gain/(Loss) (438) Income From Assoc. Co s Other Income (Expenses) (167) (358) (133) (140) (117) Pre-tax profit ,276 1,168 2,093 Income tax (217) (213) (145) (139) (196) Minority interest (88) (1) (3) (3) (5) Net profit ,128 1,027 1,892 Core Net Profit 1, ,027 1,892 Exhibit 4. Balance Sheet Cash & cash equivalent 638 1,189 1,951 2,877 6,045 Receivables Inventory 1,156 1,208 1,266 1,324 1,381 Other Curr. Asset Fixed assets - Net 1,097 1,149 1,296 1,443 1,596 Other non-curr.asset 14,914 15,955 16,370 16,669 16,847 Total asset 18,710 20,186 21,672 23,042 26,780 ST Debt Payables 1, ,143 Other Curr. Liabilities 2,387 2,480 2,729 2,853 4,357 Long Term Debt 7,291 7,511 7,614 7,496 7,573 Other LT. Liabilities 1,064 2,053 2,083 2,228 2,700 Total Liabilities 12,107 12,998 13,483 14,109 16,212 Shareholder'sFunds 6,454 7,083 8,083 8,828 10,463 Minority interests Total Equity & Liabilities 18,710 20,186 21,672 23,042 26,780 See important disclosure at the back of this report 4

5 Exhibit 4.Cash Flow Net income ,128 1,027 1,892 Depreciation and Amort Change in Working Capital 1,044 (411) ,640 OtherOper. Cash Flow (1,540) (143) 270 Operating Cash Flow 178 1,006 1,363 1,168 3,876 Capex (1,295) (787) (393) (289) (165) Others Inv. Cash Flow Investing Cash Flow (653) (733) (334) Net change in debt (248) New Capital (125) Dividend payment (135) 10 (127) (282) (257) Other Fin. Cash Flow (269) (307) (289) (300) (298) Financing Cash Flow (267) (305) (803) Net Change in Cash (242) ,168 Cash - begin of the year ,189 1,951 2,877 Cash - end of the year 638 1,189 1,951 2,877 6,045 Exhibit 5. Key Ratios Year to 31 Dec 2015A 2016A 2017F 2018F 2019F Growth (%) Sales (23.3) (2.4) 38.0 (8.6) 55.9 EBITDA (13.8) (31.0) 31.7 (13.8) 73.9 Operating profit (14.7) (32.6) 34.2 (14.6) 79.0 Net profit (45.6) (14.7) (9.0) 84.3 Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) Interest Coverage (%) Source : ASRI, Danareksa Estimates See important disclosure at the back of this report 5