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Indonesia Morning Cuppa
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Top Story
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Visit Notes
Metropolitan Land
We
visited Metropolitan Land (MTLA IJ, Not Rated) to get updates regarding the
company and its performance. Here are the key takeaways:
¨ The company’s
properties are located mostly on Greater Jakarta area (Bekasi, Cileungsi,
Cibitung) with middle segment buyers as the primary target.
¨ The company also
focuses on landed residentials and commercial projects with a few high rise
development recently. Currently there are 7 residential projects that targets
from middle-low to middle-up segment. Management also mentioned that most of
the buyers were mostly end-users as around 90% of them were mortgage users
with the remaining 10% paid in a mix using installments and cash. As of 9M17,
the company still has 614 ha of gross saleable area or 325 ha of net saleable
area.
¨ With similar
strategy since 2012 the company was able to maintain stable margin with GPM
around 59% and net margin at 21%. Management also expect going forward
margins to be maintained and should not deviate much in current operating
circumstances.
¨ This year’s target
marketing sales was IDR1.5trn where IDR1.05trn will be coming from
development sales (residentials + strata-title) and IDR450bn from recurring
commercials (hotels, office, malls). Management was confident that this
year’s target will be achieved because historically most of the sales will be
coming in during the last quarter of the year. As of Nov, total marketing
sales was estimated to reach IDR1.4trn (including recurring) and by end of
year management estimate another IDR300bn of presales will be coming in from
existing projects.
¨ Current net gearing
stood at 42% after additional IDR300bn loan for working capital and the
company is still comfortable with max net gearing of 50%. Management estimate
next year’s marketing sales has the potential to reach IDR2 – 2.1trn with
IDR500bn from commercials. However, management also expressed concerns
regarding political situation that may hit the middle-up segment.
¨ Annualized, the
stock is currently trading at 13.6x FY17F P/E. Going forward we believe the
company will maintain to target middle segment buyers, however we have yet to
detect major catalysts that may affect the stock price in the near term.
Analyst: Yualdo Tirtakencana Yudoprawiro
(6221) 2970 7062
Morning Cuppa Full Report: Indonesia Morning Cuppa 111217
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Government
rejected the proposal of SOE minister, LRT funding still uses the old
structure
Government
appoints PGN to be the LNG seller of the Sanga-Sanga block
Garuda
Indonesia sets IDR3trn capex in FY18
Bukit
Asam targets 10%-15% coal production growth in FY18
Indika
Energy officially owns 91% of Kideco share
Tiga
Pilar to continue the divestment process of its rice business
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TP
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Upside
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Catalysts
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(IDR)
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(%)
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Astra International
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9,200
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16
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Management
said that Astra International (Astra) is likely to launch a new Toyota Rush
model in the near term. We see this is a good catalyst to boost Astra’s
market share. In addition, the company is to double its coking coal
production to boost coal mining earnings. For its property business, Astra
has started selling property in the South Jakarta (TB Simatupang) and East
Jakarta areas. The company also sees traffic at the Cikopo-Palimanan toll
road increasing significantly once the Java toll road is fully connected.
This is likely to be in 2019.
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BSD City
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2,650
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54
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Expectations of
higher marketing sales due to lower interest rates, which ought to
incentivise mortgage users. BSD City has the largest proportion of mortgage
users vis-à-vis other developers. There is also better monetisation from its
large landbank.
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Bukit Asam
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17,400
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59
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Bukit Asam is the
cheapest coal counter in our coal universe. We think earnings growth should
be the catalyst for its share price. We believe investors’ concerns about a
potential cost-plus margins formula in determining coal selling prices to
domestic power plants should fade. This is based on our checks with several
competent sources. The formula is only valid for coal sales to new mine mouth
power plants. It is not for existing/under construction mine mouth power
facilities.
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Indofood Sukses Makmur
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10,300
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25
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We expect higher
domestic consumer spending in 2018. This would be thanks to the Government
stimulus initiatives for low-end consumers. Indofood Sukses Makmur, as one of
the largest food & beverage (F&B) players, should benefit from this
situation. F&B accounted for around 62% of its total 9M17 EBIT. Higher
flour prices may also boost Bogasari Flour Mills’ earnings, which accounted
for around 14% of the company’s EBIT.
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Ramayana Lestari
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1,550
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76
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Consumer spending
recovery – especially from the lower income segment in 2018 – is likely to
benefit Ramayana Lestari after a flat performance in 2017. This is due to
increased subsidies by the Government that have been allocated in the 2018
budget via the Ministry of Social Affairs. In addition, President Joko
Widodo’s (Jokowi) work-for-cash programme is likely to help raise consumer
spending.
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Recent Stories
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To access the following reports, please click on the link:
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Trading Idea: Petrosea: Volume Growth To
Continue
Link to report: Petrosea: Volume
Growth To Continue
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Trading Idea: Erajaya Swasembada: Wider
Margin On Better Sales Mix
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Wider Margin On Better Sales Mix
|
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Economics Update: November Inflation
Continues To Ease; Lowering Forecasts
Link to report: November Inflation
Continues To Ease; Lowering Forecasts
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|
Economics Update: October M2 Growth Edges
Down, Loans Pick Up
Link to report: October M2 Growth
Edges Down, Loans Pick Up
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Company Update: XL Axiata: In a Good
Position Amidst Rising Competition
Link to report: XL Axiata: In a Good
Position Amidst Rising Competition
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Company Update: Bukit Asam: The
Establishment Of An SOE Mining Holding Firm
Link to report: Bukit Asam: The
Establishment Of An SOE Mining Holding Firm
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Company Update: United Tractors:
Performance Remains On Track
Link to report: United Tractors:
Performance Remains On Track
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Company Update: Surya Semesta Internusa:
Subang & Patimban As Future Catalyst
Link to report: Surya
Semesta Internusa: Subang & Patimban As Future Catalyst
|
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Economics Update: BI Continues To Pause In
November After Easing In August-September
Link to report: BI
Continues To Pause In November
|
|
Economics Update: October Exports And
Imports Accelerated
Link to report: October
Exports And Imports Accelerated
|
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Company Update: Indocement Tunggal Prakarsa
– Intense Competition Likely To Sustain Through 2018
|
RHB Guide to Investment Ratings
Buy: Share price may
exceed 10% over the next 12 months
Trading
Buy:
Share price may exceed 15% over the next 3 months, however longer-term outlook
remains uncertain
Neutral: Share price may fall
within the range of +/- 10% over the next 12 months
Take
Profit:
Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall
by more than 10% over the next 12 months
Not Rated: Stock is not within
regular research coverage
Investment Research
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professional advice, including tax advice.
