Company Report | Dec 7, 2018
TP to Consensus Price +10.6%
vs. Last Price +12.3%
Shares data
Last Price (IDR) 855
Price date as of Dec 5, 2018 52 wk range (Hi/Lo) 1,205 / 555
Summarecon Agung Tbk | Summary (IDR bn)
2017 2018E 2019F 2020F
Revenues 5,641 5,806 5,985 6,276
Revenues growth 4.5% 2.9% 3.1% 4.9%
EBITDA 1,877 2,197 1,893 1,976
Net Profit 362 519 389 363
EPS (IDR) 25 36 27 25
EPS growth 16.2% 43.2% -25.1% -6.7%
BVPS (IDR) 579 614 625 653
EBITDA margin 33.3% 37.8% 31.6% 31.5%
NPM 6.4% 8.9% 6.5% 5.8%
Dividend yield 0.5% 0.6% 0.6% 0.6% Source: Company Data, Bloomberg, NHKS Research
YTD 1M 3M 12M
Abs. Ret. -9.5% 34.6% 40.2% -2.3%
Rel. Ret. -6.0% 31.1% 34.0% -3.9%
Deleveraging COGS, Leveraging Margin
In 3Q18, SMRA cheered its outstanding performance, e.g., the growth of 3.6% y-y to
IDR1.36 trillion—the highest growth figure since 2Q17—bolstering the surge of 76.9% y-y in 3Q18 net profit. Besides, the downbeat COGS, particularly in the landed
house segment, continues further since 2Q18 and is likely to buoy SMRA’s margin in FY18.
10M18 Marketing Sales to Hit 60.1% of Target
Until the end of 2018, SMRA posted the marketing sales of IDR2.40 trillion (+4.7% y
-y) or equal to 60.1% of FY18 target. The launch of 3 residential clusters in the existing areas and two residential clusters in a new township, i.e., Summarecon Mutiara Makassar are the backbone of the year-end marketing sales. SMRA is capable of
securing IDR180 billion and IDR125 billion from the launch of residential clusters in Serpong and Bandung. Although consumers’ interest in SMRA’s products are high, the limited number of new projects hinder SMRA to achieve the target of FY18 marketing sales.
Focus on Developing Recurring Income Segment
Ahead of the political year, new projects—focusing more on the development of landed houses—targeted to the middle-class segment is still the backbone of SMRA’s performance. It also plans to launch two new clusters in Srimaya Residence, but it has yet to launch other low-to-middle-class residential projects. Besides, it also
aggressively expands its recurring income (investment property) through two hotels projects in Serpong and Bandung and shopping mall, Summarecon Mal Bandung.
Target Price of IDR960
We use an estimate of a discount to RNAV of 75.6% (the last two-year average) as
the basis for the valuation method. Now, its stocks are traded with a discount to a 2018E RNAV of 78%.
Source: Company, NHKS Research
SMRA Quarterly Marketing Sales (IDR bn) | 1Q16 - 3Q18
Source: Company, Bloomberg, NHKS Research
SMRA Quarterly Revenue (IDR bn) | 3Q16 - 3Q18
Marketing Sales Breakdown | Jun 2018 - Sept 2018
Source: Company, NHKS Research Margin Ratios | 3Q17 - 3Q18
Source: Company, Bloomberg, NHKS Research
Performance Highlights
SMRA Revenue Breakdown | 3Q16 - 3Q18
Source: Company, NHKS Research
Revenue Breakdown | 3Q18
3Q18 review (IDR bn)
Gross Margin 43.4% 51.2% 44.9% 48.0% 49.4% 47.4% 6.0% 1.4% 2.0% 55.5%
EBIT 296 504 291 343 529 365 78.6% 54.0% 44.8% 689
EBIT Margin 22.6% 30.6% 24.3% 23.4% 39.0% 26.3% 16.4% 15.6% 12.7% 38.6%
EBITDA 373 613 367 420 602 442 61.3% 43.3% 36.3% 792
EBITDA Margin 28.5% 37.2% 30.7% 28.6% 44.4% 31.9% 15.9% 15.8% 12.5% 44.4%
Gross Margin -Revised 50.0% 47.9% 47.7%
-Previous 49.0% 47.9% 47.7%
EBIT -Revised 1,865 1,570 1,642
-Previous 1,574 1,569 1,639
-Change 18.5% 0.1% 0.2%
EBIT Margin -Revised 32.1% 26.2% 26.2%
-Previous 27.2% 26.2% 26.2%
EBITDA -Revised 2,197 1,893 1,976
-Previous 1,909 1,893 1,974
-Change 15.1% 0.0% 0.1%
EBITDA Margin -Revised 37.8% 31.6% 31.5%
-Previous 33.0% 31.7% 31.5%
Net Profit -Revised 519 389 363
-Previous 451 393 384
-Change 15.1% -1.1% -5.5%
Net Margin -Revised 8.9% 6.5% 5.8%
-Previous 7.8% 6.6% 6.1%
ASEAN Property Developer
SMRA prominent with its integrated townships is one of real-estate developers in Indonesia. Starting to operate in 1975 by
developing land of 10 hectares in Kelapa Gading, Jakarta, now, it has portfolios covering the development of integrated townships in Kelapa Gading, Serpong, Bekasi, Bandung, and Karawang. In 2018, it also expands its business to Makassar through the project of Summarecon Mutiara Makassar.
Another to the real-estate development segment, the investment and real-estate management segment, and the recreational and
hospitality segment contribute to SMRA’s revenues. It also develops the hospitality segment in Bali through the Movenpick Resort
& Spa and Samasta Lifestyle Village.
Indonesia’s Property Development Industry di ASEAN
Indonesia is a country with much the largest land and the most populous nation in ASEAN. Such qualities recognize Indonesia as
the preferred location for the property development business. Indonesia’s property developers have a lot larger number of
landbank than that of its ASEAN’s peers; BKSL and BSDE respectively have the landbank of 14,666 hectares and 3,966
hectares, for instance.
Like Philippines, Indonesia’ property development is the most competitive amongst its peers in ASEAN. Both of the property
developers post better gross margins yet lower total asset than do their peers.
Multiple Valuation
Forward P/E band | Last 3 years
Source: NHKS research
Discount to NAV band | Last 2 years
Source: NHKS research
Rating and Target Price Update
Target Price Revision
Date Rating Target Price Last Price Consensus vs Last Price vs Consensus
04/30/2018 Hold 960 (Dec 2018) 905 1,203 +6.1% -20.2%
NH Korindo Sekuritas Indonesia (NHKS) stock ratings
1. Period: End of year target priceSummary of Financials
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