FOCUS Pakuwon Jati Company Update 25 March 2014

Transcription

1 FOCUS Pakuwon Jati Mandiri Sekuritas Analyst Rizky Hidayat Liliana S Bambang liliana.bambang@mandirisek.co.id SECTOR: PROPERTY BUY Current Price Rp357 Price Target Rp430 (+20.4%) Prev. TP:Rp405 52Week range Stock Data Bloomberg Code PWON IJ Mkt.Cap (Rpbn/US$mn) 17,193.0 / 1,510.8 Issued Shares (Mn) 48, Avg. Daily T/O (Rpbn/US$mn) 17.0 / 1.49 Major shareholder Burgami Investment Ltd 20.9% PT Pakuwon Arthaniaga 16.8% Others 62.4% EPS consensus Mansek Cons Diff 2014F F F 57.4 n/a n/a Share price performance 3m 6m 12m Absolute (%) Relative to JCI (%) Climbing Up the Ladder PWON booked inline FY13 result which is 97% to ours and 96% to consensus estimates. Stable Surabaya market and strong brand name, we believe, will keep PWON s marketing sales more defensive. Reiterate BUY at new TP Rp430. Inline FY13 result. PWON reported an inline FY13 results booking Rp1.1tn NPAT which is 97% to ours and 96% to consensus estimates. The company booked FY13 NPAT of Rp1.1tn, up by 51% YoY. The pretax profit is slightly below consensus expectations due to forex loss from the company s USD58mn mandatory convertible notes. Recurring margin is improving. 4Q13 margin shows a slight slip qoq due to slower apartment & office sales margin (65% in 3Q13 to 50% in 4Q13). However, margin improvements are seen in the retail & office rental margin (52% in 3Q13 to 55% in 4Q13) as well as the hotel margin (36% in 3Q13 to 43% in 4Q13). On a yoy basis, PWON s 4Q13 margin shows strong growth as a result of full year operation of Kota Kasablanka shopping mall in As of full year, PWON s recurring income is 48% of total revenue. Balance sheet remains healthy. The company has shown strong improvement in its balance sheet with net gearing of 7% in FY13 vs. 36% in FY12. We expect PWON FINANCIAL SUMMARY to lever up its balance sheet this year to 8.7% in FY14F based on our estimates for working capital and capex purposes. 2M14 marketing sales is inline. As of February 2014, PWON has booked marketing sales of Rp322bn which is inline to the company s expectation. The marketing sales is 11% to PWON s FY14 target. The growth is slower compared to last year s due to lack of new project launches in 1Q14. We expect marketing sales of Rp3.0tn this year, supported by new project launches at Kota Kasablanka phase II in 2H14 (46% of total). We believe that PWON s apartment sales will be more defensive this year vs. its competitors due to strong brand name. Maintain BUY at TP Rp430. We like PWON on the back of solid marketing sales and recurring income. Strong brand name, we believe, is one of the edges that PWON has. We reiterate our BUY call on the counter with higher TP of Rp430 (+6%) implying 40% discount to RNAV. The stock is currently trading at x FY1415F PE and 50% discount to NAV. EBITDA 1,204 1,705 2,086 2,853 3,635 Net Profit 748 1,133 1,495 2,115 2,767 FullyDiluted EPS (Rp) FullyDiluted EPS Gr. (%) P/E Ratio (x) EV/EBITDA (x) P/B Ratio (x) Dividend Yield (%) ROAE (%) Source: Company ( ), Mandiri Sekuritas ( ) Please see important disclosure at the back of this report Page 1 of 7

2 Pakuwon Jati At a Glance FIGURE 1. SALES BREAKDOWN, 2014F FIGURE 2. GROSS PROFIT BREAKDOWN, 2014F Landed residential sales 16% Retail and office rental 37% Landed residential sales 19% Retail and office rental 34% Apartment and office sales 43% Hotel 5% Apartment and office sales 44% Hotel 3% FIGURE 3. MARKETING SALES GROWTH FORECAST Rp bn 6,000 5,000 4,411 4,000 5,096 FIGURE 4. MARKETING SALES BREAKDOWN, 2014F Educity Condominium 9.4% Pakuwon New Town 2.6% 3,000 2,000 3,003 3,080 Pakuwon City 27.7% Kota Kasablanka 46.1% 1, A 2014F 2015F 2016F Source: Company, Mandiri Sekurtias Estimates Tunjungan City 14.2% Gandaria City 0.0% FIGURE 5. EPS GROWTH TREND FIGURE 6. LEVERAGE TREND % 80% 75% % 44 87% 31 51% 24 27% 16 41% % 31% 2010A 2011A 2012A 2013F 2014F 2015F 2016F 120% 100% 80% 60% 40% 20% 0% 70% 60% 50% 40% 30% 20% 10% 0% 10% 61% 32 36% % 9% 8% 7 9 5% 2010A A A 2013F 2014F 2015F 2016F Fully Diluted EPS (LHS) Fully Diluted EPS Growth (RHS) Net gearing (LHS) Interest coverage (RHS) Source: Company, Mandiri Sekuritas Estimates Source: Company, Mandiri Sekuritas Estimates. Please see important disclosure at the back of this report Page 2 of 7

3 FIGURE 7. PWON S FY13 RESULTS PWON FY13 results Rpbn FY13 FY12 %yoy 4Q13 3Q13 %qoq 4Q12 %yoy Revenue 3,030 2, Gross profit 1,765 1, Operating profit 1,512 1, Pretax profit 1, Net profit 1, Gross margin (%) Operating margin (%) Pretax margin (%) Net margin (%) Source: Company, Mandiri Sekuritas % of ours % of cons. Still focusing on current projects in the midterm. PWON will still focus on 3 of its main projects namely Kota Kasablanka, Tunjungan Plaza, and Pakuwon City for the next 12 years. We expect marketing sales contribution to be 46% Kota Kasablanka, 14% Tunjungan City, 28% Pakuwon City, 9% Educity Condo, and 3% Pakuwon New Town for FY14F. The new Jakarta project is expected to be announced soon, but will still take at least a year before launching for design and licensing processes. Launching of the rest of the Educity superblock will also start 2 years from now at the earliest. FIGURE 8. PWON S MARKETING SALES FORECASTBREAKDOWN Rpbn 6,000 5,000 4,000 1,863 1,525 3, , , ,000 1,421 1,801 2, F 2015F 2016F Kota Kasablanka Gandaria City Tunjungan City Pakuwon City & Pakuwon New Town FIGURE 9. PWON S RECURRING INCOME GROWTH Rpbn 3,000 2, , , , ,932 1,286 1,355 1, A 2013A 2014F 2015F 2016F Shopping mall & Leased Office Hotel Source: Company, Mandiri Sekuritas Estimates A chunky 2016 ahead. PWON, we expect, will see huge revenue jump in 2016 as a result of new project recognitions. We expect marketing sales of Rp5.1tn in 2016 coming from Kota Kasablanka 43%, Gandaria City 8%, Tunjungan City 13%, Pakuwon City 23%, Educity Condo 1%, and Pakuwon New Town 12%. Revenue recognitions of Gandaria 8 office tower 2 and Pakuwon New Town will boost PWON s revenue for the year. In terms of recurring income, full year operations of Tunjungan Plaza 5, Sheraton Gandaria Hotel, and the Four Points Sheraton Tunjungan Hotel will also boost PWON s FY16F revenue. We expect a slight slip of gross margin in FY16F due to recognition of Pakuwon New Town, which offers a lower margin. Buy at new TP of Rp430. We reiterate our Buy call on PWON with an upgraded TP of Rp430 implying 40% discount to RNAV and FY14F PE of 13.8x. The increase in our NAV is because we rollforward our TP to Dec14. The stock is currently trading at FY14F and FY15F PE of 11.5x vs industry of 10.5x. Please see important disclosure at the back of this report Page 3 of 7

4 FIGURE 10. MANDIRI SEKURITAS PROPERTY BASKET VALUATION TABLE Premium Replacement Share price (discount) to Target Price cost Mar 24th replacement cost RNAV Discount to NAV P/E 13F APLN % % ASRI % 1,538 59% CTRA 781 1, % 1,647 31% SMRA 681 1,090 1,260 60% 2,553 57% BSDE 1,546 1,680 2,000 9% 4,002 58% MDLN % % BKSL % 1,010 82% LPCK 4,700 7,375 9,850 57% 19,300 62% PWON % % JRPT ,000 47% 2,495 68% Simple average 56% Source: Bloomberg, Mandiri Sekuritas Estimates P/E 14F FIGURE 11. PWON RNAV ASSUMPTION PAKUWON CITY EAST SURABAYA LAND VALUE ASSUMPTIONS 2014F Residential Commercial Avg. land selling price (IDR/sqm) 15,400,000 20,020,000 Development cost (IDR/sqm) (1,200,000) (1,200,000) Marketing expenses (IDR/sqm) (693,000) (900,900) Fixed and Variable Overhead ( IDR/sqm) (924,000) (1,201,200) Land value (IDR/sqm) 12,583,000 16,717,900 Tax (770,000) (1,001,000) Attributable value of land, rounded 11,813,000 15,716,900 PAKUWON NEW TOWN WEST SURABAYA LAND VALUE ASSUMPTIONS 2014F Residential Commercial Avg. land selling price (IDR/sqm) 8,250,000 10,725,000 Development cost (IDR/sqm) (1,200,000) (1,200,000) Marketing expenses (IDR/sqm) (371,250) (482,625) Fixed and Variable Overhead ( IDR/sqm) (495,000) (643,500) Land value (IDR/sqm) 6,183,750 8,398,875 Tax (412,500) (536,250) Attributable value of land, rounded 5,771,250 7,862,625 Please see important disclosure at the back of this report Page 4 of 7

5 FIGURE 12. PWON S FY14F RNAV PAKUWON JATI (PWON IJ) Net Allotable 2014F Total Value Effective to PWON Attributable Value Net Asset Valuation Area (in ha) Price/Sqm (Rpbn) to PWON (Rpbn) PAKUWON CITY EAST SURABAYA (Assuming 65% plot ratio) Residential ,813,000 9, % 9,523 Commercial ,716,900 5, % 5,430 Land inventory ,400,000 1, % 1,358 East Coast Retail Mall % 72 Educity Condominium % 77 SUBTOTAL 16,461 PAKUWON NEW TOWN WEST SURABAYA (Assuming 65% plot ratio) Residential ,771,250 3, % 3,287 Commercial ,862,625 1, % 1,919 Land inventory 8.8 8,250, % 728 SUBTOTAL 5,934 MIXED USED SUPERBLOCKS Tunjungan City Central Surabaya 1.9 6, % 6,045 Gandaria City South Jakarta 0.9 3, % 2,695 Kota Kasablanka South Jakarta 2.7 5, % 5,066 SUBTOTAL 13,806 SUPERBLOCK LANDBANK FOR EXPANSION (Replacement Cost) Tunjungan City Central Surabaya ,000, % 120 Gandaria City South Jakarta ,000, % 134 Kota Kasablanka South Jakarta ,000, % 350 SUBTOTAL 604 TOTAL ESTIMATED ASSET VALUE (Rpbn) 36,805 Add: Cash end FY14F 2,354 Less: Debt & Advances end FY14F (4,636) NET ASSET VALUE (Rpbn) 34,523 # of outs shares (bn) 48.2 NAV/Share (Rp/share) 717 Discount to NAV 40% Target Price 430 Please see important disclosure at the back of this report Page 5 of 7

6 Pakuwon Jati Profit and Loss Revenue 2,165 3,030 3,707 4,983 6,475 Gross profit 1,234 1,765 2,150 2,954 3,801 Operating profit 1,062 1,512 1,841 2,538 3,260 EBITDA 1,204 1,705 2,086 2,853 3,635 Net Interest (131) (73) (126) (69) 1 Interest expense (180) (189) (241) (185) (114) Interest income Forex Losses/Gains (35) (102) Net Other 5 (6) PreTax Profit 901 1,331 1,765 2,496 3,265 Income Tax (135) (195) (265) (374) (490) Others n/a n/a n/a n/a n/a Minority Interests (19) (4) (5) (7) (9) Net Profit 748 1,133 1,495 2,115 2,767 Cashflow Statement Operating Profit 1,062 1,512 1,841 2,538 3,260 Oth.Recurring Income/(Exp) (126) (79) (122) (65) 5 Depr & Amort Other Gain / Loss (19) (4) (5) (7) (9) Tax (135) (195) (265) (374) (490) Change in Working Capital (1,024) (308) (78) Other Operating Cash Flow n/a n/a n/a n/a n/a Operating Cash Flow 1,537 2, ,099 3,063 Capital Expenditure (658) (359) (1,833) (2,100) (1,800) Free Cash Flow 879 1,711 (1,162) (1) 1,263 Other Investing Cash Flow (324) (565) 682 (26) (28) Cash Flow From Investing (982) (924) (1,150) (2,126) (1,828) Net Change in Debts 161 (68) 848 (428) (1,130) Equity Funds Raised Other Financing Cash Flow Cash Flow From Financing 174 (233) 662 (648) (1,486) NonRecurring Income (Exp) (35) (102) Extraordinaries Income (Exp) Net Change in Cash (652) (250) Cash at beginning 621 1,315 2,126 2,354 1,701 Cash at End 1,315 2,126 2,354 1,701 1,451 Valuation YE Dec 2012A 2013A 2014F 2015F 2016F PER (x) EV/EBITDA (X) P/BV (X) P/CF (X) Dividend Yield (%) Balance Sheet Cash and ST Investment 1,315 2,126 2,354 1,701 1,451 Acct Receivable Inventory 963 1,051 1,524 2,539 2,865 Others Current Assets 2,709 3,710 4,563 5,158 5,511 Investments Fixed Assets 4,210 4,376 5,963 7,749 9,174 Others 5,641 6,292 7,878 10,005 11,832 Total Assets 7,566 9,298 11,057 13,463 15,268 Current Liabilities 2,018 2,850 2,451 3,391 3,916 Acct. Payable ST Borrowings Others 1,721 2,421 2,395 3,317 3,818 LongTerm Liabilities LongTerm Payable 2,166 2,044 2,823 2, Others Total Liabilities 4,431 5,196 5,646 6,157 5,552 Shareholder's Equity 2,912 3,876 5,111 6,882 9,162 Key Ratios Growth (% YoY) Sales EBIT EBITDA Net Profit Profitability (%) Gross Profit Margin Oper. Margin EBITDA Margin Net Margin ROAA ROAE Leverage Net Debt / Equity (%) (4.7) EBITDA / Gross Interest (x) Per share data (Rp) EPS CFPS BVPS DPS Source: Company, Mandiri Sekuritas estimates Please see important disclosure at the back of this report Page 6 of 7

7 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Plaza Mandiri 28 th Floor, Jl. Jend. Gatot Subroto Kav , Jakarta 12190, Indonesia General: , Fax : (Equity Research), (Equity Sales) RESEARCH John Rachmat Head of Equity Research, Strategy john.rachmat@mandirisek.co.id Tjandra Lienandjaja Banking tjandra.lienandjaja@mandirisek.co.id Handoko Wijoyo Construction, Toll Road handoko.wijoyo@mandirisek.co.id Hariyanto Wijaya, CFA, CFP, CA, CPA Plantation, Heavy eq., Energy hariyanto.wijaya@mandirisek.co.id Herman Koeswanto, CFA Consumer, Poultry herman.koeswanto@mandirisek.co.id Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Ariyanto Kurniawan Telecom, Coal & Metal Mining ariyanto.kurniawan@mandirisek.co.id Aldian Taloputra Economist aldian.taloputra@mandirisek.co.id Leo Putra Rinaldy Economist leo.rinaldy@mandirisek.co.id Rizky Hidayat Research Assistant rizky.hidayat@mandirisek.co.id Vanessa Ariati Tanuwijaya Research Assistant vanessa.tanuwijaya@mandirisek.co.id Wisnu Trihatmojo Research Assistant wisnu.trihatmojo@mandirisek.co.id INSTITUTIONAL SALES Lokman Lie CoHead Institutional Equities lokman.lie@mandirisek.co.id Silva Halim CoHead Institutional Equities silva.halim@mandirisek.co.id Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id Cindy Amelia P. Kalangie Institutional Sales cindy.amelia@mandirisek.co.id Jane Theodoven Sukardi Institutional Sales jane.sukardi@mandirisek.co.id Janefer Amanda Soelaiman Institutional Sales janefer.soelaiman@mandirisek.co.id Karmia TandjungNasution Institutional Sales karmia.tandjung@mandirisek.co.id Mirna Santikara Salim Institutional Sales santikara.salim@mandirisek.co.id Oos Rosadi Institutional Sales oos.rosadi@mandirisek.co.id Vera Ongyono Institutional Sales vera.ongyono@mandirisek.co.id Yohan Setio, CFA Institutional Sales yohan.setio@mandirisek.co.id Zahra Aldila Niode Institutional Sales zahra.niode@mandirisek.co.id Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id RETAIL SALES Ridwan Pranata Head Retail Equities ridwan.pranata@mandirisek.co.id Boy Triyono Jakarta Branch boy.triyono@mandirisek.co.id Yohanes Triyanto Kelapa Gading Branch yohanes.triyanto@mandirisek.co.id Hendra Riady Mangga Dua Branch hendra.riady@mandirisek.co.id Umar Abdullah Pondok Indah Branch umar.abdullah@mandirisek.co.id Indra Mas ari Bandung Branch indra.mas ari@mandirisek.co.id Yuri Ariadi Pontianak Branch yuri.ariadi@mandirisek.co.id Ruwie Medan Branch ruwie@mandirisek.co.id INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12month period from the date of the the last published report, are: Buy (10% or higher), Neutral (10% to10%) and Sell (10% or lower). DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number or fax ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be influenced by any part or all of his or her compensation.