Indonesia Market Summaries 23 July 2013

• PT Perusahaan Gas Negara Tbk (PGAS, Rp5.800) targeting two oil and gas blocks owned by Hess. The plan will be carried out through its subsidiary PGAS, PT Saka Energi Indonesia, after Hess expressed its plan to pull out from Indonesia. Hess currently has four oil and gas blocks, namely Ujung Pangkah Block, Semai V Block,  Sesulu Selatan Block, and Laut Timur 1 Block. (Kontan)
• PT Alam Sutera Realty Tbk (ASRI, Rp740) predicts its net profit rose 33% -52% YoY in semester I/2013 to Rp 700 billion - Rp 800 billion. The income is projected to rise 55% -64% YoY to Rp 1,7 billion - Rp 1,8 trillion amid a strong rise in sales last year. The financial expectations of management that it meets the 40% -46% of year forecast and 48% -54% consensus of market participants. (Investor Daily)
• PT Sentul City Tbk (BKSL, Rp245) raised its sales target by the end of the year to Rp 1,5 trillion, from the previous target of Rp 1 trillion. The enhancement is the result of large sales in Semester I/2013 amounted to Rp 700.
  
  After Lebaran, BKSL will build 270 condotel units, where 200 units of which will be sold and the rest will be used for recurring income sources. (Investor Daily)
• Thang Long Cement JSC, a new subsidiary of PT Semen Indonesia Tbk (SMGR, Rp14.600, NEUTRAL, TP Rp19.000) in Vietnam, refinance its debt worth U.S. $ 100 million using syndicated bank in dollar-denominated loan.
  
  SMGR claimed that the loan has a low interest so profitable for Thang Long that is currently charged a Vietnam high interest bond. (Investor Daily)
• PT Multicom Persada International demanding PT Erajaya Swasembada Tbk (ERAA, Rp2.175, BUY, TP Rp3.875) and several other parties. Lawsuit delivered by Daniel Setiawan, Director of PT Multicom Persada International (MPI). The lawsuit was also filed with the Director ERAA Sim Chee Ping, PT Data Citra Mandiri, Apple South East Asia Pte Ltd, and Apple Head Quarter.

for Indonesia Market Summaries 23 July 2013

Friday 12 April 2013 in brief

BSDE recorded a yoy jump on 1Q13 marketing sales by 214%

Bumi Serpong Damai announced their Q1 marketing sales of Rp2.6tn which jumped by 214% yoy. The marketing sales itself is already 37% of BSDE’s full year target of Rp7tn. Land plot sales (77% of 1Q13 marketing sales) is the main contributor, where it grew by 613% yoy. Meanwhile, residential contributed 20% of total marketing sales while commercial contributed 11%. The company’s JV with Hongkong Land and AEON Mall was a strong push to BSDE’s early year achievement, according to the company, as they managed to book gain of Rp1.7tn from selling 66ha to the two partners. Moreover, BSDE and Hongkong Land’s JV company will acquire 10ha more land from BSDE, according to the company. (Kontan)

Sentul City gained Rp250bn working capital loan

Last month, BKSL, through PT Bukit Jonggol Asri, gained a Rp250bn loan from Bank Panin to be used to develop a township. The tenor is 3 to 5 years with a single digit interest rate. BKSL added that Rp20bn will be used for working capital, Rp100bn for long term infrastructure and facilities, and Rp130bn for housing construction working capital. (Bisnis Indonesia)

Semen Indonesia showed the strongest growth in Q1

SMGR showed the strongest growth in sales compared to its peers in 1Q13 where the company’s sales grew by 8.6% yoy. The strong growth was due to capacity increase from their new Tuban IV and Tonasa V plants of 750k tons and 600k tons respectively. SMGR expects revenue to grow 21% yoy in 1Q13 which is resulted from sales volume growth. The company claimed that they saw less than 1% growth in ASP in Q1. (The Jakarta Post)

Jaya Agra Wattie to boost CPO and rubber productions

JAWA is targeting CPO production of 56,217 ton which is 21.4% higher compared to the same period last year. Production growth in CPO is expected due to higher palm age that should boost productivity. Fresh fruit bunches (TBS) purchases from third parties is also expected to increase where 39% of their total production will come from third parties. JAWA is also allocating Rp570bn for CAPEX to develop 4,000ha of CPO plantation and 5,500ha of rubber plantation. The company is planning to add landbank of 50,000ha in Kalimantan and Sumatra this year. (Kontan)

Wijaya Karya (WIKA) to accelerate IPO of Wika Beton.

A newspaper reported that Wijaya karya (WIKA) plans to accelerate the IPO of its precast concrete subsidiary, WIKA Beton, to this year. Current WIKA Beton capacity reaches 2mn ton per year at 9 precast concrete plants. It’s also planning to acquire a precast concrete company in Batam. Wika Beton assets is around Rp2.3tn with Rp180bn net profit. On the IPO, proceed is expected to be around Rp1tn for 20% shares. WIKA owns 78.4% ownership of Wika Beton. (Investor Daily)

Sentul City reported a net profit of IDR 221 billion

Sentul City: FY12 result booking Rp221bn net profit above ours (108.3%) and in-line with consensus’ estimates (100.1%)

BKSL has reported a FY12 net profit of Rp221bn which is above our estimates (108.3%) and in-line with consensus’ (100.1%). On a yearly basis, margin shows improvement from the gross level to the net margin level.

Lower booking of sales in Q4 was a result of lower number of sales despite the high level margins of the products that BKSL sold. BKSL showed a 68% yoy increase in opex as a result of higher A&P spending. Below the operating line, BKSL was supported by lower other expenses due to provisions which was booked in 2011.

BKSL has a bright 2013 in our view with exciting new and existing projects. Marketing sales booking from last year of Rp739bn from Sentul City and Rp457bn from Sentul Nirwana will most likely boost the company’s revenue this year. The company’s recently opened Pasar Apung (Floating Market) is not to be overlook as BKSL reported that the riverside dine-in spot has been a huge success. New exciting deals and projects coming include HERO’s next generation hypermart in Sentul City, the new Serpong Natura project, Pertamina Hospital, the anticipated Jungleland.

We believe that BKSL has a clear vision of its unique township which continue to offers creative and appealing products and facilities, which leads to continue to like the company. Sentul City’s ASP of approximately Rp5mn/sqm still has much upside in our view due to the unique green hillside location and improving facilities. The company expects ASP to be around Rp6.5mn/sqm this year. Re-iterate BUY on BKSL which is trading at 27.3x FY13F PE vs. industry of 16.4x.