Modernland and the Lippo Group on April 9 2013

Modernland booked Rp648bn 1Q13 marketing sales

In Indonesia Market Summaries as of 1Q13, MDLN has booked an on-track marketing sales of Rp648bn which is 24% of the company’s full year target of Rp2.6tn. More than half of the sales came from Modern Gateway, which is the landbank sold to ASRI, which contributed 61% to total marketing sales. The second major contributor is from Modern Cikande Industrial Estate which contributed Rp133bn or 20% to total marketing sales. From MDLN’s residential projects, contribution still came from Kota Modern (8%) and Modernhill (6%). (Company release)

The Lippo Group to bring 3 of their affiliated companies public in 2Q13

The Lippo Group is planning to list 3 of their affiliated companies public in 2Q13 with a value of at least Rp1.8tn. The three companies are PT Multipolar Technology, PT Bank Nationalnobu, and PT Siloam Hospital. PT Multipolar Technology, which is the direct subsidiary of MLPL in the IT sector, has yet to disclose the total value of their IPO but is expected to be less than Rp1tn. Bank Nobu is targeting an IPO proceed of Rp800bn with an expected free float of 40%. Meanwhile, Siloam Hospital targets an IPO proceed of Rp100bn with an expected free float of 25%. (Bisnis Indonesia)

For today March 22 2013

Modernland acquiring land to further develop industrial estate

Modernland (MDLN) is serious in acquiring land 1,300ha and 1,000ha in Jakarta and Banten respectively, to develop their industrial estate. In Eastern Jakarta, the company is planning to acquire 750ha this year first and the rest next year. MDLN will develop industrial estate on half of the land and a residential on the other half where construction will take 2 years. Meanwhile in Banten, MDLN is planning to add 1,000ha to its Modern Cikande industrial estate. The company stated that they will acquire 400ha next year and 200ha in 2015. MDLN expects land sales of 100ha per year. CAPEX for this year is allocated at Rp1.9tn from land sales and internal cash, while revenue is targeted to be Rp2tn. (Kontan)

Modernland (MDLN) issuing USD150million bond

Bank Tabungan Pensiunan Nasional - Mitsubishi has little interest to acquire BTPN

In contrast to the earlier news, Bank of Tokyo-Mitsubishi UFJ said that there is small chance for the group to acquire Bank Tabungan Pensiunan Nasional (BTPN) from TPG Group. They however stated that they were looking at several small and mid-sized banks to be acquired to increase the penetration in the Indonesian market. Comment: this leaves another Japanese group, Sumitomo Mitsui, is the only group that may acquire BTPN, currently 57.9% owned by TPG Group. With the market cap of US$3.1b the bank is trading at 3.0x P/BV 2013 consensus.
Bank Tabungan Negara results in line with expectations

Chili price on the rise

Investor Daily newspaper reported that while garlic price is easing though not significantly, chili price is gaining pace. The Ministry of Agriculture is investigating whether it is cause by supply scarcity or market manipulation. However, the ministry’s Vice Minister Rusman Heriawan suspect weather as the culprit (Investor Daily)

The government considers to cut capital spending budget

 The Minister of Finance Agus Martowardojo expressed that underachieving state revenue due to external pressure and exports weakening and potentially swelling subsidized fuel are risking an increase in state budget deficit which currently set at 1.65% of GDP or Rp153.3tn in 2013. Therefore, The Ministry of Finance considers to cut ministerial/institution budget including capital spending if subsidized fuel rationing and consumption control programs are not able to meet target. This is considering historical track that very few ministerial/institution spending realization can achieve 90% of budget. Consequently, there may be a downward revision in 2013 economic growth projection. The government aims for 6.8% economic growth this year (Bisnis Indonesia)

Industrial and finance ministers have signed the low carbon emission program draft regulation

Industrial Minister M.S. Hidayat and Finance Minister Agus Martowardojo reportedly have signed draft regulation on low carbon emission program, the umbrella of LCGC. It is further stated that the draft must be signed by three other ministers before it is submitted and signed by the President. The government previously hinted for the regulation to be out this month. (Bisnis Indonesia)

Modernland (MDLN) issuing USD150million bond in 2Q13

MDLN issuing USD150mn bond in 2Q13

Modernland is planning to issue a USD 150mn bond in 2Q13 which will be listed in the Singapore Exchange. According to the company, the interest rate on global bond is now cheaper than rupiah bond.

The proceeds will be used for land acquisition which will be developed to be an industrial and residential estate. (Investor Daily)

Comment:MDLN expects a net profit of Rp808.7bn in 2013. Issuing the bond will bear the company around Rp172.8bn of interest expense and hedging cost. Thus, dragging down their net profit to Rp635.9bn.