Refer to Important disclosures in the last page of this report
Stock DataTarget price (Rp) Rp700
Prior TP (Rp) Rp700
Shareprice (Rp) Rp620
Upside/downside (%) +12.9
Sharesoutstanding (m) 14,426
Marketcap. (US$ m) 598
Semarop Agung 33.5%
Sinarmegah Jayasentosa 6.6%
Public 24.9%
Estimate Change; Vs. Consensus 2018 2019 PT Indo Premier Sekuritas joey.faustian@ipc.co.id +62 21 5793 1168
Strong 3Q, but still in-line
Earnings grew by 70% in 9M18, within expectation.
However, marketing sales was weak at Rp2.2tn (+12% yoy).
Creating better access for Summarecon Bandung.
Maintain Hold with unchanged TP of Rp700.
Strong 3Q18 earnings with better margins.
SMRA reported 9M18 earnings of
Rp203bn (+70% yoy), in-line with market expectation, forming 50%/54% of
our/consensus FY18F estimate. Despite increase interest expense to Rp518bn
(+9% yoy), there were margin expansion in 9M18 with operating and net margin
of 25.9% and 5.1%, respectively (9M17: 20.9% and 3.0%) due to lower cost -7%
yoy and lower opex -2.1 yoy%. In quarterly basis, SMRA has a strong 3Q18
bottom line of Rp125bn (+242 qoq, 77% yoy) with high net margin of 9.2%
(2Q18: 2.5%; 3Q17: 5.4%), forming 31% of our FY18F forecast.
9M18 presales below 3 years average historical.
SMRA reported marketing
sales of Rp2.2tn in 3Q18 (+12% yoy), forming 56% of company’s FY18F
marketing sales guidance of Rp4tn (Ours: Rp3.8tn), which is slightly below the
company’s 3 years average historical 9M performance of 62%. The 9M18
marketing sales were mainly contributed by Serpong, Bekasi, and Bandung
projects with 47%, 28% and 14% contribution, respectively. Buyer profile uses
Cash Installment (48%) as their main payment model, followed by mortgage and
cash with 28% and 24%, respectively. Please note that company tends to made
large land plot sales in 4Q to fulfill its full year marketing sales guidance.
To invest in toll road business.
SMRA signed a MoU with Wijaya Karya (WIKA
IJ; Rp1,165; Buy) and PT Margautama Nusantara to form a consortium to develop
Bandung Inner Urban Toll Road (BIUTR). The elevated toll road is expected to
create better access to its existing township, Summarecon Bandung. The toll road
will have the length of 25.2km from Pasteur-Cileunyi area (Cisumdawu toll road)
to Gedebage area (Purbaleunyi toll road). With total investment estimation of
Rp10tn, SMRA is targeting minority shares of 20%.
Maintain Hold with TP of Rp700.
Given in-line 9M18 result and relatively weak
marketing sales numbers, we maintain our conservative revenue growth forecast
of 3.6% in FY18F (Guidance: 10%). As we maintain our earnings forecast for
FY18F/FY19F, we maintain our Hold ratings for SMRA with TP of Rp700/share,
representing target FY18F P/E of 25.4x. Potential upside to our call might come
from better than expected marketing sales due to big land plot sales.
Summarecon Agung
(
SMRA IJ
)
02 November 2018
Source: SMRA, IndoPremier Share Price Closing as of : 02-November-2018
2
Refer to Important disclosures in the last page of this report
Fig. 1: Revenue by segments Fig. 2: Marketing sales trend
Source: Company, IndoPremier Source: Company, IndoPremier
Fig. 3: 9M marketing sales achievement Fig. 4: 9M18 marketing sales by township
Source: Company, IndoPremier Source: Company, IndoPremier
Fig. 5: 9M18 payment profile Fig. 6: Margin trend
Source: Company, IndoPremier Source: Company, IndoPremier
-2%
2015A 2016A 2017A 2018F 2019F 2020F
Recurring income Development properties growth
(Rp bn)
2014A 2015A 2016A 2017A 2018F 2019F 2020F
Marketing sales growth
9M18 9M17 9M16 9M15 9M14
(Rp Bn) Marketing sales % to full-year
8%
28%
47%
14% 3%
Kelapa Gading Bekasi Serpong Bandung Karawang
24%
48% 28%
Cash Cash Installment Mortgage
0.0%
2014A 2015A 2016A 2017A 2018F 2019F 2020A
3
Refer to Important disclosures in the last page of this report
Fig.7: 9M18 earnings result
(Rp bn) 9M18 9M17 YoY 3Q18 2Q18 QoQ % of
ours
% of consensus
Revenue 4,023 3,994 0.7% 1,356 1,468 -7.6% 69% 69%
Gross profit 1,912 1,723 10.9% 669 705 -5.0% 72% 70%
Operating profit 1,042 834 24.9% 410 342 20.0% 77% 74%
Net income 203 119 70.2% 125 37 242.1% 50% 54%
Margins
Gross margin 47.5% 43.2% 49.4% 48.0%
Operating margin 25.9% 20.9% 30.2% 23.3%
Net margin 5.1% 3.0% 9.2% 2.5%
4
Refer to Important disclosures in the last page of this report
Year To 31 Dec (RpBn) 2016A 2017A 2018F 2019F 2020F
Income Statement
Net Revenue 5,398 5,641 5,846 6,119 6,554
Cost of Sales (2,801) (3,074) (3,189) (3,282) (3,604)
Gross Profit 2,597 2,567 2,657 2,836 2,950
SG&A Expenses (1,192) (1,229) (1,298) (1,381) (1,477)
Operating Profit 1,406 1,339 1,358 1,455 1,473
Net Interest (532) (542) (489) (484) (473)
Forex Gain (Loss) 0 0 0 0 0
Others-Net 1 2 3 5 8
Pre-Tax Income 874 799 873 976 1,007
Income Tax (272) (267) (280) (297) (319)
Minorities (293) (170) (190) (217) (220)
Net Income 308 362 403 462 468
Balance Sheet
Cash & Equivalent 2,039 1,482 1,426 1,577 1,884
Receivable 548 661 685 720 816
Inventory 5,531 6,498 7,748 8,748 10,248
Other Current Assets 546 517 577 585 643
Total Current Assets 8,664 9,158 10,437 11,631 13,591
Fixed Assets - Net 11,096 11,179 10,505 9,091 7,896
Goodwill 0 0 0 0 0
Non Current Assets 1,001 1,315 1,560 1,850 2,196
Total Assets 20,771 21,663 22,513 22,583 23,696
ST Loans 1,041 906 1,406 2,406 3,406
Payable 369 423 0 405 444
Other Payables 2,446 3,458 3,600 3,757 4,090
Current Portion of LT Loans 362 1,489 1,841 1,200 700
Total Current Liab. 4,217 6,276 7,240 7,767 8,640
Long Term Loans 6,028 5,598 5,162 4,212 4,012
Other LT Liab. 2,399 1,436 1,505 1,696 1,840
Total Liabilities 12,645 13,309 13,908 13,675 14,491
Equity 1,467 1,467 1,467 1,467 1,467
Retained Earnings 4,776 5,043 5,373 5,754 6,130
Minority Interest 1,923 1,844 1,765 1,686 1,608
Total SHE + Minority Int. 8,166 8,354 8,606 8,908 9,205
Total Liabilities & Equity 20,810 21,663 22,513 22,583 23,696
5
Refer to Important disclosures in the last page of this report
Year to 31 Dec 2016A 2017A 2018F 2019F 2020F
Cash Flow
Net Income (Excl.Extraordinary&Min.Int) 602 532 593 679 688
Depr. & Amortization 266 323 337 351 365
Changes in Working Capital (728) (1,297) (1,300) (972) (1,442)
Others (803) (223) 1,571 346 338
Cash Flow From Operating (663) (664) 1,200 404 (51)
Capital Expenditure (910) (720) 92 773 484
Others 101 91 132 132 132
Cash Flow From Investing (808) (630) 224 905 616
Loans 954 562 417 (591) 300
Equity 0 0 0 0 0
Dividends (72) (72) (72) (81) (92)
Others 699 (1,676) (630) (505) (541)
Cash Flow From Financing 1,581 (1,186) (286) (1,177) (333)
Changes in Cash 109 (2,481) 1,139 132 232
Financial Ratios
Gross Margin (%) 48.1 45.5 45.4 46.4 45.0
Operating Margin (%) 26.0 23.7 23.2 23.8 22.5
Pre-Tax Margin (%) 16.2 14.2 14.9 15.9 15.4
Net Margin (%) 5.7 6.4 6.9 7.5 7.1
ROA (%) 1.6 1.7 1.8 2.0 2.0
ROE (%) 3.9 4.4 4.8 5.3 5.2
ROIC (%) 3.1 3.2 3.6 3.9 3.9
Acct. Receivables TO (days) 23.2 38.3 41.2 41.2 41.4
Acct. Receivables - Other TO (days) 0.5 0.8 0.8 0.7 1.4
Inventory TO (days) 0.5 0.5 0.4 0.4 0.4
Payable TO (days) 28.1 47.0 46.7 44.4 43.0
Acct. Payables - Other TO (days) 0.0 0.0 0.0 0.0 0.0
Debt to Equity (%) 91.0 95.7 97.7 87.8 88.2
Interest Coverage Ratio (x) 0.5 0.5 0.5 0.4 0.4
Net Gearing (%) 66.0 77.9 81.1 70.1 67.7
Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167
INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period HOLD : Expected total return between -10% and 10% within a 12-month period SELL : Expected total return of -10% or worse within a 12-month period
ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analysts personal views about any and all of the subject securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
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