FOCUS Ciputra Development Company Update 25 January 2016

Transcription

1 FOCUS XXX Company Update XX XXXXX 213 FOCUS Ciputra Development Company Update 25 January 216 Mandiri Sekuritas Analyst Liliana S Bambang liliana.bambang@mandirisek.co.id Rizky Hidayat rizky.hidayat@mandirisek.co.id Sector : Property BUY (from Neutral) Current Price Rp1,28 Price Target Rp1,6 (+25.%) Prev. TP:Rp1,35 52-wk range Rp1,568 - Rp727 Stock Data Bloomberg Code CTRA IJ Mkt.Cap (Rp bn/us$ mn) 19,412 / 1,4 Issued Shares (mn) 15,166 Avg. Daily T/O (Rp bn/us$ mn) 15.4/1.1 Major shareholder Pt Sang Pelopor 3.6% Credit Suisse, Singapore 8.1% Public 61.3% EPS consensus Mansek Cons Diff 215F (.7) 216F F (14.) Share price performance 3m 6m 12m Absolute (%) (12.3) Relative to JCI (%) Best to Hold on During Turbulent Times We think that CTRA has the best business model amid such a weak market. A favorable tax amnesty should also provide a boost for the market in ex-greater Jakarta. We upgrade CTRA to Buy with PT of Rp1,6. Best business model amid such a weak market. As the market has been weaker than expectations in FY15, we find that the bargaining power of land owners has decreased significantly. CTRA has been receiving better proposals for JV/JO and the company has been able to cherry pick its JV/JO. Also, due to its JV/JO structure, CTRA's balance sheet has remained solid. As of 9M15, CTRA is standing at net gearing of 23%. Tax amnesty should provide a boost. Ciputra group is one of the developers that have exposure across Indonesia. In FY15, around 7% of its marketing sales is from ex-greater Jakarta. CTRA is more exposed to secondary cities that offer potential upside. We think that tax amnesty would particularly help property in ex-jakarta region. Anecdotal evidences suggest that the underground economy in ex-jakarta is quite large. We are worried on the market in Greater Jakarta, as the markets in Serpong and Bekasi suggest oversupply. Plenty of projects in the pipeline. Projects in Jakarta are located in Rawa Buaya, Fatmawati and Kemayoran. Projects in ex-jakarta are located in Samarinda and Batam. There is also a potential project in Jayapura. We forecast 2% marketing sales growth in FY16F (after taking out one-time sale of Ascott residences) and 8% growth in FY17F. Upgrade to Buy. We upgrade CTRA to Buy with PT of Rp1,6 (from Rp1,35 previously). Our PT is based on 4% discount to NAV. We attach a lower discount to CTRA, as we think its business model is sounder compared to its peers. We also think that there is potential rerating on CTRA, in particular post tax amnesty. CTRA is one of our top picks in the property sector. We think big caps could continue to outperform amidst market volatility. Key risks to our forecast are weak commodity price putting more pressure than we expect on ex-java demand. FINANCIAL SUMMARY YE Dec (Rp Bn) 213A 214A 215F 216F 217F EBITDA 1,553 2,24 2,842 3,117 2,925 Net Profit 977 1,325 1,334 1,511 1,429 Fully-diluted EPS (Rp) Fully-diluted EPS growth (%) (5.4) 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 Company Update 25 January 216 FIGURE 1.FY16F SALES BREAKDOWN Shopping Mall 9% Hotel 2% Other Recurring 7% CTRA - At a Glance FIGURE 2.FY16F GROSS PROFIT BREAKDOWN Shopping Mall 11% Other Recurring Hotel 8% 2% Apartment 15% Landed Residential 67% Apartment 15% Landed Residential 64% FIGURE 3.MARKETING SALES Rp bn 9,4 9,2 9, *one time sale Ascott residence FIGURE 4.FY16F MARKETING SALES BREAKDOWN CTRP 5% 8,8 8,6 8,4 8,2 8, 8,941 8, ,344 8,541 9,234 CTRS 34% CTRA 61% 7,8 213A 214A 215A 216F 217F FIGURE 5.EPS GROWTH TREND FIGURE 6.LEVERAGE TREND (Rp) (%) (2) (%) (5) (1) (15) (2) (25) (3) (35) (x) Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-2 Dec-9 Dec-1 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-2 EPS EPS Gr. [RHS] Net Debt/Equity (NDE) Interest Cover [RHS] Please see important disclosure at the back of this report Page 2 of 7

3 Company Update 25 January 216 A safer business model Ample projects in the pipeline to benefit from tax amnesty JV/JO structure is a big chunk of marketing sales. Post 1998 Asian Financial Crisis, the Ciputra group has changed its business model. Instead of acquiring land bank, the company is expanding their portfolio by creating JV and profit sharing mechanism with landowners. This allows the company to add projects aggressively, without exhausting working capital and equity. Hence, its balance sheet is clean, not heavy in borrowing. Due to its experience in the 1998 Asian Financial crisis, the company tends to be very prudent on its borrowing. The company is focusing on its Ciputra brand. Due to its solid track record, branding and long history in the property business, the land owners are keen to develop partnerships with Ciputra group. In FY14-15, CTRA s JV/JO structure contributes 4-45% of its marketing sales. Better bargaining power position. As the property market has been weaker than expectations in FY15, we think that the bargaining power of land owners has decreased significantly. Although, we don t find many land sales at distressing prices, as most of these land owners purchase land using equity. CTRA has been receiving better proposals for JV/JO and the company has been able to cherry pick its JV/JO. Much potential on projects in the pipeline. We view that there is an upside on CTRA s marketing sales, in particular in FY17F onwards. We are expecting the tax amnesty to create potential buyers, - those who were initially too afraid to purchase property. Assuming that some of these underground economy are using tax amnesty, the Indonesian government expects around Rp2,tn of wealth to start being reported. If 5-1% of these assets are used to purchase property, this could potentially add around Rp1-2tn of marketing sales. The company has at least 12 potential new projects for development in the future. The company is one of the first companies who venture outside of Java, hence creating a first mover advantage. The key risk for projects outside of Java is that the weakness in commodity prices could dampen the mood to purchase property. FIGURE 7.PROJECTS IN THE PIPELINE List of new projects Method 1 Citra Palm Garden Sentul Profit sharing 2 Citra Plaza Kemayoran JV 3 Puri Office & Apartment Profit sharing 4 Citragarden Hills Samarinda Profit sharing 5 CitraGarden City Malang Profit sharing 6 Citranusa Kabil Batam (warehouse) Profit sharing 7 CitraGarden Angsana Samarinda Profit sharing 8 Fatmawati project JV 9 CitraHome Apartment Rawabuaya Self owned 1 CitraGarden Balikpapan Profit sharing 11 Kozko Yogyakarta JV/JO 12 Citraland Jayapura JV/JO Source: Company Please see important disclosure at the back of this report Page 3 of 7

4 Company Update 25 January 216 Upgrade to Buy Stock should trade at premium on better business model. We upgrade CTRA to Buy with PT of Rp1,6 (from Rp1,35 previously). Our PT is based on 4% discount to NAV. We attach a lower discount to CTRA, as we think its business model is sounder compared to its peers. The stock is trading at an attractive FY16F P/E of 12.6x. CTRA is one of our top picks in the sector. The stock has outperformed in FY15F and we expect another outperformance this year. We also like its subsidiary, CTRS. However as the stock is too illiquid, CTRS underperformed despite the positive fundamentals. For this year, there is a likelihood that investors will continue to prefer big caps due to market volatility. FIGURE 8.DISCOUNT TO NAV CHART Premium (discount) to NAV % CTRA premium (discount) to forward NAV - LHS -1% -2% -3% -4% -5% -6% -7% -8% CTRA share price - RHS 1,8 1,6 1,4 1,2 1, CTRA share price - RHS Source: Bloomberg, Mandiri Sekuritas estimates FIGURE 9.P/E CHART Rp/share CTRA 22x 17x 12x 7x Jan-13 Aug-13 Mar-14 Oct-14 May-15 Dec-15 Source: Bloomberg, Mandiri Sekuritas estimates Please see important disclosure at the back of this report Page 4 of 7

5 Company Update 25 January 216 FIGURE 1.NAV FORECAST Ciputra Surya Sub Total NAV 14,76 Effective ownership of Ciputra Development 62.7% Net Asset Value (Ciputra Development) 9,221 Citra Garden City Jakarta Size (ha) Residential 35 Commercial Developed Land Equivalent (ha) Average Selling Price (Rp/sqm) Indicative Value (Rp B) 13,48,15 2,77 16,5, 1,467 4,174 Citra Raya Tangerang Residential Commercial - Size (ha) Developed Land Equivalent (ha) Average Selling Price (Rp/sqm) Indicative Value (Rp B) 2,894,5 8,741 3,75, 4,854 13,595 Citra Indah Jonggol Residential Commercial - Size (ha) Developed Land Equivalent (ha) Average Selling Price (Rp/sqm) Indicative Value (Rp B) 56, , Price Indicative % % CTRA NAV of Ciputra Property Size (ha) (Rp/Sqm) % Sold value (Rp B) ownership ownership Ciputra World Jakarta Lot ,, 8% % 51.89% 225 Ciputra World Jakarta Lot ,, % 51.89% 326 Ciputra World Jakarta Lot ,, - 1, % 51.89% 699 Extension Ciputra World ,, % 51.89% 181 Rosewood tanah Bali 36. 4,, 1,44 6.% 51.89% 448 Rosewood tanah Bali 44. 4,, 1,76 6.% 51.89% 548 Puri ,, 1,8 55.% 51.89% 38 Sub Total CTRP 99 2,737 Cash & ST Investment 4,366 Debt (4,682) Advance from customers (4,483) Net Asset Value Indicative value (Rp B) % ownership Operating Assets 1, % 5,448 JV assets 8,645 Total NAV 39,864 NAV per share 2,628 Discount 4% PT 1,577 Source: Mandiri Sekuritas estimates Please see important disclosure at the back of this report Page 5 of 7

6 Company Update 25 January 216 Ciputra Development Profit & Loss YE Dec (Rp Bn) 213A 214A 215F 216F 217F Revenue 5,77 6,344 7,891 8,595 8,371 Gross Profit 2,546 3,334 4,138 4,59 4,414 Oper. Profit 1,553 2,24 2,842 3,117 2,925 EBITDA 1,553 2,24 2,842 3,117 2,925 Net Interest 53 (14) (316) (286) (218) Interest Expense (117) (334) (491) (491) (476) Interest Income Forex Losses/Gains 48 Net Other Pre-Tax Profit 1,79 2,147 2,568 2,879 2,753 Income Tax (296) (353) (464) (54) (498) Others Minority Interests (437) (469) (77) (864) (826) Net Profit 977 1,325 1,334 1,511 1,429 Cash Flow YE Dec (Rp Bn) 213A 214A 215F 216F 217F Operating Profit 1,553 2,24 2,842 3,117 2,925 Net Interest 53 (14) (316) (286) (218) Depr & Amort Other expenses/income Other Gain / Loss (8) Tax (296) (353) (464) (54) (498) Chg in Working Capital 2,9 (614) (1,61) 393 (125) Other Oper. Cash Flow (1,56) (159) (213) Oper. Cash Flow 3,29 1,33 1,82 2,69 1,916 Capital Expenditure (3,657) (2,998) (1,261) (886) (333) FCF (OPCF after Capex) (448) (1,695) (179) 1,724 1,583 Other Investing CF 95 1 CF From Investing (3,561) (2,987) (1,261) (886) (333) Net Chg in Debts 1,257 1, Equity Funds Raised (2) Dividend (195) (195) (266) (267) (32) Other Financing CF CF From Financing 1,6 1, (267) (32) Non-Recur. Inc (Exp) 48 Extraord. Inc(Exp) Net Change in Cash 755 (587) 216 1,457 1,281 Cash at beginning 2,747 3,475 2,888 3,15 4,561 Cash at End 3,52 2,888 3,15 4,561 5,842 Valuation YE Dec 213A 214A 215F 216F 217F PER (x) EV/EBITDA (x) P/BV (x) P/CF (x) Dividend Yield (%) Balance Sheet YE Dec (Rp Bn) 213A 214A 215F 216F 217F Cash & ST Investment 3,475 2,888 3,15 4,561 5,842 Acct. Receivable 723 1, Inventory 4,892 6,428 7,422 8,29 8,73 Others Current Assets 9,13 1,888 11,777 13,958 15,247 Investments Fixed Assets 5,331 6,555 6,568 6,573 6,571 Others 5,654 5,839 5,786 6,266 6,755 Total Assets 2,115 23,282 24,131 26,798 28,573 Curr. Liabilities 1,2 1, Acct. Payable 1,134 1, ST Borrowings Others Long-Term Liabilities Long-Term Payable 2,728 4,21 4,682 4,682 4,682 Others 6,421 6,482 5,71 6,216 6,53 Total Liabilities 1,349 11,862 1,873 11,431 11,254 Shareholder s Equity 9,766 11,421 13,26 15,368 17,32 Key Ratios YE Dec 213A 214A 215F 216F 217F Growth (% YoY) Sales (2.6) EBIT (6.2) EBITDA (6.2) Net Profit (5.4) Profitability (%) Gross Profit Margin Oper. Margin EBITDA Margin Net Margin ROAA ROAE Leverage Net Debt / Equity (%) (7.6) (6.7) EBITDA/Gross Int. (x) Per Share Data (Rp) EPS CFPS BVPS DPS 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 1219, 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 Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Ariyanto Kurniawan Telecom, Coal & Metal Mining ariyanto.kurniawan@mandirisek.co.id Matthew Wibowo Retail, Textile, Hospital matthew.wibowo@mandirisek.co.id Rizky Hidayat Property, Industrial, Media rizky.hidayat@mandirisek.co.id Aditya Sastrawinata Shipping, Construction aditya.sastrawinata@mandirisek.co.id Leo Putera Rinaldy Economist leo.rinaldy@mandirisek.co.id Wisnu Trihatmojo Research Assistant wisnu.trihatmojo@mandirisek.co.id Yudha Gautama Research Assistant yudha.gautama@mandirisek.co.id Kevin Halim Research Assistant kevin.halim@mandirisek.co.id Priscilla Thany Research Assistant priscilla.thany@mandirisek.co.id INSTITUTIONAL SALES Lokman Lie Co-Head Institutional Equities lokman.lie@mandirisek.co.id Silva Halim Co-Head 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 Karmia Tandjung-Nasution 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 Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id RETAIL SALES Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id Boy Triyono Plaza Mandiri boy.triyono@mandirisek.co.id A. A. Damargumilang Pondok Indah Office Tower damar.gumilang@mandirisek.co.id Herianto Pondok Indah Prioritas herianto@mandirisek.co.id Yohanes Triyanto Kelapa Gading yohanes.triyanto@mandirisek.co.id Hendra Riady Mangga Dua hendra.riady@mandirisek.co.id Indra Mas'ari Bandung indra.mas ari@mandirisek.co.id Yogiswara P. Yogyakarta yogiswara.perdana@mandirisek.co.id Widodo Solo widodo@mandirisek.co.id Linawati Surabaya Linawati@mandirisek.co.id Bambang Suwanto Malang bambang.suwanto@mandirisek.co.id Ruwie Medan ruwie@mandirisek.co.id Aidil Idham Palembang aidil.idham@mandirisek.co.id Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (1% or higher), Neutral (-1% to1%) and Sell (-1% or lower). DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). 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.