Intiland Dev DILD IJ - Splash

Transcription

Intiland Dev
TARGET
PRIOR TP
CLOSE
UP/DOWNSIDE
DILD IJ
INDONESIA / REAL ESTATE
HOW WE DIFFER FROM THE STREET
BNP Consensus
INDUSTRY OUTLOOK Ï
% Diff
Target Price (IDR)
1,250
1,250
0.0
EPS 2010 (IDR)
54.97
58.00
(5.2)
EPS 2011 (IDR)
72.71
79.00
(8.0)
Positive
Neutral
Negative
1
0
0
Market Recs.
KEY STOCK DATA
YE Dec (IDR b)
Revenue
2010E
2011E
2012E
1,088
1,644
2,776
285
391
672
118
Rec. net profit
Recurring EPS (IDR)
54.97
72.71
Prior rec. EPS (IDR)
-
-
-
Chg. In EPS est. (%)
N/A
N/A
N/A
EPS growth (%)
673.3
32.3
62.0
Recurring P/E (x)
18.7
14.2
8.7
Dividend yield (%)
0.0
0.0
2.2
EV/EBITDA (x)
10.0
8.6
5.2
Price/book (x)
1.5
1.4
1.2
Net debt/Equity
(5.4)
(9.2)
(5.6)
ROE (%)
12.2
10.5
16.1
(IDR)
Intiland Dev
Rel to MSCI Indonesia
(%)
388
288
188
600
88
(12)
100
May-09 Aug-09 Nov-09 Feb-10 May-10
1,100
Share price performance
1 Month
3 Month
12 Month
Absolute (%)
(22.1)
19.4
421.1
Relative to country (%)
(14.1)
13.8
Next results
376.6
July 2010
Mkt cap (USD m)
569
3m avg daily turnover (USD m)
1.2
Free float (%)
19
Major shareholder
12m high/low (IDR)
UBS Singapore (Truss Investment
Partners Pte Ltd) (37%)
1,312/173
3m historic vol. (%)
56.3
ADR ticker
-
ADR closing price (USD)
-
Sources: Bloomberg consensus; BNP Paribas estimates
IDR1,250
N/A
IDR1,030
+21.4%
BUY
INITIATION
Coming back
BUY with TP of IDR1,250 on 25% discount to RNAV.
Heading into a new era.
Strong balance sheet and a surge in revenue in 2010.
1Q10 results have shown robust numbers.
BUY with TP of IDR1,250
We initiate Intiland Development with a
BUY and set a target price at IDR1,250,
implying 2011E P/E of 17.2x and P/BV of
1.7x. While this is above the industry
average in Indonesia of 13.9x and 1.4x on
Bloomberg consensus estimates we
believe there is some hidden value in
Intiland, since most of their projects have
yet to be realised in medium-term.
Tjandra Lienandjaja
+6221 2358 4935
[email protected]
Heading into a new era
Affected by the Asian crisis, the company
is now controlled by management
following a debt-to-equity restructuring
which took place in 2007. Under the new management, Intiland has been
repositioning itself as a major property player in both Surabaya and
Jakarta, by acquiring large parcels of land; tripling its land bank –
increasing it to 2,130ha (top 3 in Indonesia in terms of land bank). Intiland
is disposing of low yielding or mature assets in Surabaya (Graha Famili
and Graha Residen) and Jakarta (Taman Semanan, Wisma Manulife)
while planning future projects expected to generate faster cash flows and
higher margins.
Stronger balance sheet, revenue set to surge in 2010E
Intiland is the fifth largest listed property company based on equity post
the IDR2.1t rights issue in April 2010. This infusion of capital should
enable the company to embark on new projects in Surabaya (Graha
Natura, Ngoro Industrial Park 2) and Jakarta (1Park Residences,
Cengkareng, Talaga Bestari, TB Simatupang and Kebon Melati). With the
development partly financed by consumers, we expect Intiland to remain
in a net cash positive position over the next three years. We expect
Intiland to see its revenue close to triple to IDR1.1t in 2010 through the
sales of land plots of their mature projects with net profit expected to
increase 10-fold to IDR285b given the high margin for land sales. The
company has already recorded IDR278b in revenue and IDR85b in net
profit in 1Q10.
Net asset valuation
Our RNAV calculation shows IDR1,663/share value of Intiland’s property
based on the fully diluted number of shares. Around 70% of the RNAV
comes from projects located in Jakarta and 30% from Surabaya. We
applied a 25% discount to RNAV, which is the average discount to the
listed property stocks, to derive to our target price.
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PREPARED BY BNP PARIBAS SECURITIES ASIA
27 May 2010
THIS MATERIAL HAS BEEN APPROVED FOR U.S DISTRIBUTION. IMPORTANT DISCLOSURES CAN BE FOUND IN THE DISCLOSURES APPENDIX.
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Contents
1) Resurgence of a long time player .............................................................................................................................................. 3
Back on its own feet ............................................................................................................................................................ 3
RNAV calculation ................................................................................................................................................................ 3
2) Why invest in Intiland? ............................................................................................................................................................... 6
Land bank a plenty .............................................................................................................................................................. 6
Multiple projects for all segments ........................................................................................................................................ 7
Improving profit margins through disposing low yield assets and new project growth......................................................... 8
Strong balance sheet to allow for future expansion............................................................................................................. 9
Peak capex in 2010 for the acquisitions .............................................................................................................................. 9
Phenomenal sales growth in 2010 with improved margin ................................................................................................. 10
1Q10 shows strong results already ................................................................................................................................... 12
Long track record in the property business ....................................................................................................................... 12
Management team ............................................................................................................................................................ 13
Improving economy means more interest in property........................................................................................................ 14
3) Portfolio overview ..................................................................................................................................................................... 15
Investment portfolio........................................................................................................................................................... 15
Others (industrial estate, small housing cluster, sports centre and hotel) ......................................................................... 20
4) Devil’s advocate ........................................................................................................................................................................ 22
Unexpected significant hike in interest rate ....................................................................................................................... 22
Project development execution ......................................................................................................................................... 22
Land rights issue ............................................................................................................................................................... 22
5) P&L, Balance Sheet and Cash Flow ........................................................................................................................................ 23
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Indonesia Research Team
ELVIRA TJANDRAWINATA
HELMY KRISTANTO
TJANDRA LIENANDJAJA
PT BNP Paribas Securities Indonesia
+6221 2358 4948
[email protected]
+6221 2358 4939
[email protected]
+6221 2358 4935
[email protected]
FOONG CHOONG CHEN
BNP Paribas Capital (Malaysia) Sdn. Bhd.
+603 2050 9938
[email protected]
2
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Resurgence of a long time player
Back on its own feet
Intiland Development is positioning itself as an important property player in both Jakarta
and Surabaya with proceeds from the rights issue in April 2010. The IDR2.1t proceeds
have been used to acquire three major land banks in Jakarta area; with plans to turn
them into new property developments. Based on equity, with the strong IDR3.4t
shareholders’ equity post the rights issue, Intiland is now the fifth largest listed property
company in Indonesia. The company has been negatively affected by the Asian crisis
since 1998. In 2007 they changed their management following a major debt
restructuring.
Intiland has been noted for their excellent projects, catering to the upper middle
segment in landed property, mostly in Surabaya, where they originally came from.
While still maintaining its strong position in Surabaya market, the company plans to
repeat previous successful track record in Jakarta; embarking on major projects for
landed property, apartment and office business. In addition to the Graha Natura in
Surabaya, the company plans to build 1Park Residences in South Jakarta and to
develop major mixed-use projects in Kebon Melati and TB Simatupang in Jakarta. They
also plan to develop a township in Cengkareng, near the Jakarta international airport.
With the expected strong domestic demand on landed property and apartments, we do
not expect Intiland to concentrate on the new target market brought about by the
upcoming relaxation on foreign ownership on apartments in the short-term. However,
when the opportunity arises they should have the land bank to cater to this segment in
the future.
Having a stronger financial condition and the change of company’s direction to
concentrate more on more profitable products we expect Intiland to see significant
revenue increase starting 2010 that will support phenomenal earning growth of sevenfold for this year. We expect this to be achieved through the sales of high margin land
plots in Surabaya and Jakarta in 2010. The low interest rate environment, volatile stock
market, coupled with development of infrastructure close to the company’s existing
property sites are expected to help support the strong sales. Going forward, the multiple
projects (landed property, mixed-use & high-rise buildings for apartment and office and
industrial estate) they have should provide continued earnings growth for the next few
years with the an expected 30-50% gross margin.
RNAV calculation
With the 2,130ha land bank we estimate total attributable RNAV at IDR9.6t or
IDR1,663/share based on fully diluted shares. Of the attributable NAV, Jakarta area
accounts for 68% and Surabaya area 31%. Of the project type, township accounts for
47% of total, mixed-use & high-rise 31%, office tower 10% and others (industrial,
hospitality) the remaining 12%. To derive our target price, we set a 25% discount to our
RNAV (which is the average discount given to the listed property stocks) and arrived at
IDR1,250 which implies 2011 P/BV of 1.7x and 2011 P/E of 17.2x. The valuation looks
more demanding compared to other property stocks in the market however, we believe
there are hidden values in Intiland as most of the projects have yet to be realised.
Earnings are should still continue on the upside over the next two to three years time
period, when they expect to recognise revenue from the planned projects, mostly
mixed-use property in Jakarta. BUY.
3
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Exhibit 1: RNAV
Assets
Valuation
Method
Net lettable
area
(sqm)
Appraised
value
(IDR b)
Ownership
(%)
Office buildings (Investments)
Intiland Tower Jakarta
Intiland Tower Surabaya
Wisma Manulife
Others
Sub-total
Market value
Market value
Market value
Market value
30,800
16,850
10,927
27,662
408
194
131
140
100
100
100
100
Township & Clusters
Taman Semanan Indah
Talaga Bestari
Graha Famili
Graha Natura (Lontar)
Cengkareng
Maja, Banten
Others
Sub-total
Market value
Market value
Market value
Market value
Market value
Market value
Market value
Mixed use & high-rise
Gandaria (1Park, parcel 2 & 5)
Kebon Melati
Kebon Melati (scattered)
Regatta
Graha Famili Festival Walk
Intiland Tower extension
Megacity Daan Mogot
TB Simatupang
Others
Sub-total
Market value
Market value
Market value
Market value
Market value
Market value
Market value
Market value
Market value
Industrial
Ngoro 1
Ngoro 2
Sub-total
Market value
Market value
Hospitality
Graha Residen
Whiz Hotel (various)
Sub-total
Market value
Market value
53,000
1,460,000
54,000
580,000
3,500,000
10,900,000
2,490,000
19,037,000
106
365
324
580
2,100
763
374
56,000
18,500
13,500
92,000
58,000
11,000
198,000
70,000
2,000
519,000
616
333
243
1,656
464
72
198
630
12
490,000
2,240,000
2,730,000
196
392
86,000
5,000
91,000
172
40
Sports clubs
Pantai Mutiara
Golf Graha family
Sub-total
Others
Bukit Darmo
Bandung
Sub-total
Total
100
300
Market value
Market value
195,000
3,000
198,000
195
21
22,575,000
100
100
75
100
90
100
100
100
28
100
50
75
100
40
90
75
50
100
100
100
100
100
20
100
Intiland’s
attributable value
(IDR b)
As% of
property RNAV
(%)
408
194
131
140
874
9.5
106
365
243
580
1,890
763
374
4,321
46.9
616
93
243
828
348
72
79
567
9
2,855
31.0
98
392
490
5.3
172
40
212
2.3
100
300
400
4.3
39
21
60
0.7
9,211
100.0
Net cash
Leftover cash from rights issue
Cash from warrant exercise
Equity value
(337)
380
1,088
10,343
Issued shares (m)
Issued shares – fully diluted (m)
5,183
6,220
NAV/share – fully diluted (IDR)
20% discount of RNAV
RNAV
1,663
(416)
1,247
Sources: Intiland Dev; BNP Paribas estimates
4
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
Exhibit 2: RNAV Breakdown Based On Type
Sports clubs
and others
5%
Hospitality
2%
Industrial
5%
27 MAY 2010
Exhibit 3: RNAV Breakdown Based On Location
Others
1%
Office
buildings
(Investments)
9%
Surabaya
31%
Township &
Clusters
48%
Mixed use &
high-rise
31%
Jakarta and
surrounding
68%
Source: BNP Paribas estimates
Source: BNP Paribas estimates
5
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Why invest in Intiland?
Land bank a plenty
Post the rights issue in April 2010, Intiland made some major land bank injections,
increasing its land bank to 2,130ha from 800ha. The tripling of the land bank to more
than 1,000ha (Bumi Serpong Damai with around 3,200ha, Sentul City with 1,900ha,
Jababeka with 1,800ha, Ciputra Group with 1,600ha, Lippo Karawaci with 1,500ha,
Jaya Real Property with around 1,400ha and Alam Sutera with 1,200ha) makes Intiland
one of the largest property companies in Indonesia.
Intiland has used most of the IDR2.07t rights issue proceeds to:
1
IDR450b to acquire 90% of PT Putra Sinar Permaja (PUTRA) with 7.0ha land in TB
Simatupang, S. Jakarta
2
IDR450b to acquire 100% of PT Wirasejati Binapersada (WIRA) with 1,090ha of
land bank in Maja, Banten
3
IDR793b to repay promissory notes to PT Permata Ratnamulia for the acquisition
of 350ha of raw land in Cengkareng, Tangerang
The company plans to use the remaining IDR380b from the rights issue proceeds for
working capital.
The large land bank will enable Intiland to concentrate more on property development,
in Jakarta and Surabaya, hopefully replicating their successful track record in creating
new townships. One of the focuses of property development in over the next few years
will be in Graha Natura and Graha Festival Walk in West Surabaya and Cengkareng
and Talaga Bestari in Banten. Additionally, the company plans to develop mixed-used
and high-rise projects in 1Park and TB Simatupang, in South Jakarta and in Kebon
Melati, Central Jakarta.
Exhibit 4: Intiland’s Land Bank And Development Projects
Name of property
Location
Started
year
Master
plan
(ha)
Developed
area
(ha)
5-year
plan
(ha)
Future
development
(ha)
Total
landbank
(ha)
To be
acquired
(ha)
Sale of inventories/matured assets
Graha Famili
Taman Semanan Indah
Graha Residen & Isen
Sub-total
Surabaya
Jakarta
Surabaya
1992
1989
1989
280.0
80.0
12.0
372.0
274.6
75.0
12.0
361.6
5.4
5.3
8.6
19.3
–
–
–
–
5.4
5.3
8.6
19.3
–
–
–
–
Jakarta
Surabaya
Banten
Banten
2009
2010
2011
2012
na
330.0
100.0
500.0
1,090.0
–
2,020.0
51.0
–
–
–
262.0
313.0
116.0
86.0
160.0
–
–
362.0
163.0
14.0
340.0
1,090.0
249.0
1,856.0
146.0
58.0
232.0
1,090.0
249.0
1,775.0
133.0
42.0
268.0
–
–
443.0
Mixed-use & high-rise building developments
Regatta
Jakarta
Megacity Daan Mogot
Jakarta
Gandaria (1Park, Parcel 2 & 5)
Jakarta
TB Simatupang
Jakarta
Kebon Melati (Phase 1,2,3)
Jakarta
Intiland Tower Extension
Surabaya
GF Festival Walk
Surabaya
Others (including past projects)
Sub-total
2006
2009
2010
2011
2011
2012
2013
na
11.0
19.8
8.7
7.0
6.0
1.1
5.8
–
59.4
1.8
–
–
–
–
–
–
12.6
14.4
9.2
3.7
3.8
7.0
3.2
1.1
5.8
–
33.8
–
16.1
1.8
–
–
–
–
–
17.9
9.2
19.8
5.6
7.0
3.2
1.1
5.8
7.6
59.3
–
–
3.1
–
3.0
–
–
–
6.1
Industrial
Ngoro Industrial Park 1
Sub-total
1991
2010
220.0
224.0
444.0
171.0
–
171.0
49.0
224.0
273.0
–
–
–
49.0
224.0
273.0
–
–
–
2010
na
0.5
–
0.5
2,895.9
–
18.7
18.7
878.7
0.5
–
0.5
688.6
–
–
–
1,873.9
0.5
3.3
3.8
2,130.4
–
–
–
449.1
Township development
Talaga Bestari
Graha Natura (New West/Lontar)
Cengkareng, Tangerang
Banten
Sub-total
Hospitality & others
Whiz Hotel
Sub-total
Total
East Java
East Java
Source: Intiland Dev
6
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
Exhibit 5: Land Bank Breakdown Based On Type
Others
0%
Industrial
13%
Exhibit 6: Land bank Breakdown Based On Location
Matured
assets/
inventory
1%
Mixed-use
& high-rise
building
3%
27 MAY 2010
Others
1%
Surabaya
28%
Jakarta
71%
Township
83%
Sources: Intiland Dev; BNP Paribas
Sources: Intiland Dev; BNP Paribas
Multiple projects for all segments
Although Intiland has been developing a variety of property projects; such as housing,
commercial shop houses, offices, apartments, schools, sport centre, hotels, golf course
and industrial estate, they have not ventured into retail commercial business, in which
they feel they do not have expertise. Instead they concentrate their efforts more on
their core area of expertise, predominantly housing projects. Their housing projects are
divided into four categories: office building, townships & estates, mixed-use & high-rise
and others (industrial parks, hotel).
Exhibit 7: Intiland’s Major Projects
Office building
Townships &
Mixed-use &
(Investments)
estates
high-rise
Others
Intiland Tower
JKT
Talaga Bestari
JKT
Regatta
JKT
Intiland Tower
SBY
Taman Semanan
JKT
Megacity
JKT
Ngoro I P
SBY
Wisma Manulife
JKT
Pantai Mutiara
JKT
1Park, Gandaria
JKT
Whiz Hotel
JOG
Wisma Sarinah
JKT
Graha Famili
SBY
Kebon Melati
JKT
Whiz Hotel
SMR
Graha Pratama
JKT
Graha Natura
SBY
GF Festival Walk
SBY
Whiz Hotel
SBY
WTC Surabaya
SBY
Cengkareng
JKT
Intiland Twr Ext.
SBY
Whiz Hotel
JKT
Maja, Banten
JKT
TB Simatupang
JKT
JKT = Jakarta; SBY = Surabaya; JOG = Jogjakarta; SMR = Semarang;
Intiland’s vast land bank now enables them to cater to all customer segments, from
lower, middle to the upper level income groups. Throughout their 30 year history, one of
their core areas of expertise has been providing housing to the middle upper segment.
7
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Exhibit 8: Intiland’s Projects In Jakarta Area
Soekarno-Hatta
International Airport
Tangerang
500HA*
Regatta, 11HA
Pantai Mutiara
100HA
Megacity, 20HA
Taman
Semanan,
80HA
JORR
II
Talaga
Bestari
300HA*
Alam
Sutera
Citra Raya
Gading
Serpong
Gandaria
8.0HA
R II
JO R
Karawaci
R
yJ
wa
ail
BSD City
Me
kt-
k
ra
TB Simatupang 7.0HA
rak
t-Me
ay Jk
Railw
Railway Jkt-Merak
Banten
1090HA
= New Acquisition
Kebon
Melati 10HA
= Existing Portfolio
= Mature Portfolio
= Competitor
Exhibit 9: Intiland’s Projects In Surabaya
Graha
Residen
8.0ha
Graha Natura
100HA
Citraland
Pakuwon
Festival
Walk
6.0HA
Intiland Tower
Ext 1.0ha
Bukit
Darmo
Golf
Graha
Famili
280HA
Juada
International
Airport
= New Acquisition
= Existing Portfolio
= Mature Portfolio
= Competitor
Improving profit margins through disposing low yield assets
and new project growth
The management has been reviewing entire inventory of projects in order to develop a
which will focus upon higher- yielding projects- raising capital by selling the mature and
low-yielding assets such as:
1
Taman Semanan in Jakarta, Graha Famili and Graha Residen in Surabaya. The
company indicated that they may also convert the later into landed housing before
selling them.
2
Wisma Manulife in Jakarta.
Going forward, Intiland has indicated that they plan to focus more on developing key
projects where they control the majority of the land so that they can maximize returns.
The management expects the higher returns to come from:
1
organic growth – through their own existing land bank such as in Graha Natura, TB
Simatupang, Kebon Melati and Cengkareng
8
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
2
opportunistic acquisitions – potential land in good locations
3
joint venture with land owners – for smaller projects such as Whiz Hotel
4
capital & investment management
27 MAY 2010
One area that Intiland is targeting for future growth is the establishment of Whiz Hotel.
The first Whiz Hotel should begin operation mid-2010. The company plans to capitalize
on domestic business travelers, who up until now, have had rather limited choices for
good hotels in prime locations. They plan to offer good service at a budget price though
this 2-star+ hotel chain. Located in a strategic area (near Malioboro Street in Jogjakarta,
Jl. Pierre Tendean in Semarang and Jl. Mayjen Sungkono in Surabaya) the hotel offers
good value; with rooms starting at IDR275,000++ per night. A similar hotel chain,
Amaris Hotel (Gramedia Group), which started their operation in Jakarta and three
other cities during the past year, has an occupancy rate of 70-80%. Although we
anticipate Whiz Hotel should contribute 2% of operating profit in 2012, over the long
term, the plan is to manage 60 hotels in five years time, either wholly owned or through
joint ventures with land owners. Thus their contribution should be increasingly important
going forward.
Strong balance sheet to allow for future expansion
Intiland’s net gearing level was 27% in March 2010 but this is expected to turn into a net
cash position once the IDR2.1t rights issue proceeds are included. We expect this net
cash position to continue in the next three years, as we expect strong sales from landed
property as well as the apartment in Surabaya and Jakarta. A strong financial condition,
coupled with consumer financing for property sales are expected to allow Intiland to
continue expanding their property developments to generate more revenues.
Exhibit 10: Intiland’s Net Gearing Level
(%)
30
25
20
15
10
5
0
(5)
(10)
(15)
2007
2008
2009
2010E
2011E
2012E
Prior to 2007 Intilands growth had been hampered by the Asian crisis of 1998 with its
high debt and negative equity. After the company restructured its debts in 2007
(converting IDR1.1t debt into 70% equity), reducing its net debt position to a more
manageable level of 15% by end 2007, their improved capital structure coupled with a
change in direction with new management at the helm, helped the company to begin to
experience expansion when the economy was improving.
Peak capex in 2010 for the acquisitions
Capital expenditure is expected to peak in 2010 as Intiland acquires companies that will
boost its land bank substantially. Aside from IDR1.7t funds for the acquisition, the
company will also need to spend more on other land acquisition, infrastructure
development in new projects (Graha Natura, 1Park Residences, Talaga Bestari, Ngoro
Industrial Park) and hotel construction.
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27 MAY 2010
Exhibit 11: Capital Expenditure To Peak In 2010
(IDR b)
Land acquisiton
Investment
Inventory
2,500
2,000
1,500
1,000
500
0
2008
2009
2010E
2011E
2012E
With such a high capex, we expect free cash flow to remain in the negative territory in
the next few years. Given the excess funds from the rights issue, coupled with advance
from property buyers, however, the company should be able to support this negative
free cash flow.
Phenomenal sales growth in 2010 with improved margin
We expect marketing sales to reach IDR1.3t in 2010, close to four times the level
reached in 2009. The substantial marketing sales increase will likely come from land
sales as well as a new apartment project (1Park Residences) which were already
started in February 2010. The high marketing sales growth increase should continue to
IDR2.3t in 2011 when additional mixed-use and high-rise projects in TB Simatupang
and Kebon Melati come on stream. Given that revenue recognition is based on project
completion on high-rise project, accounting sales revenue is expected to more than
double in 2010 to IDR1.1t before tapering to 51% growth, which would mean revenue of
IDR1.6t in 2011.
Please note that Marketing sales of property refers to sales of property even when the
project is not completed, or the property is still on paper; accounting sales revenue is
when a company books it in P&L. Because of accounting standards, property
companies can only record the transaction of a high-rise building when at least 20% of
the project is completed.
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BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
Exhibit 12: Marketing Sales Breakdown
(IDR b)
3,000
2,500
Exhibit 13: Accounting Sales Breakdown
Sports clubs & others (LHS)
(%)
Rental, maintenance and utilities (LHS)
300
Apartments (LHS)
Growth rate (RHS)
3,000
200
Apartments (LHS)
180
Houses and land (LHS)
2,500
160
Growth rate (RHS)
200
2,000
(%)
(IDR b)
250
27 MAY 2010
140
2,000
120
150
1,500
1,500
100
1,000
80
1,000
50
500
2008
2009
40
20
0
(50)
2007
60
500
0
0
100
2010E 2011E 2012E
0
2007
2008
2009
2010E 2011E 2012E
We expect Intiland to record 49.5% gross margin in 2010, up from 41.9% recorded in
2009. We believe the higher margin will come from:
1
Land plot sales from the mature property such as Graha Famili and Graha Residen
in Surabaya and Taman Semanan Indah and Talaga Bestari in Jakarta. In addition,
sales of industrial land in Ngoro 2 will start this year. We expect gross margin from
the house and land sales to reach 54.5% in 2010 compared to 58.1% in 2009 since
margin on houses is lower than land plots.
2
Apartment sales from Regatta (already completed) in Jakarta.
Exhibit 14: Gross And Operating Margins
(%)
Exhibit 15: Gross Margin Breakdown
(%)
Gross margin
Operating margin
60
70
60
50
Apartments (LHS)
50
40
40
30
30
20
20
10
0
10
(10)
0
(20)
2005
2006
2007
2008
2005 2006 2007 2008 2009 2010E 2011E 2012E
2009 2010E 2011E 2012E
Gross margin is expected to come down to 43.2% in 2011 as new projects with lower
margins such as 1Park Residence and TB Simatupang start contributing to sales
revenue. Since they are in early- stage of development, we expect gross margin on
these projects to be 20-30%.
Intiland so far has been able to turn existing customers into repeat customers in other
property developments through various incentive programmes. For Graha Natura,
which is located 10 minutes driving from the more established Graha Famili, the
company invited Graha Famili customers to buy property in Graha Natura at discounted
price (maximum one land plot), through partnership pragramme:
11
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV

existing customers were offered an opportunity to buy 40% of the land plot at half
of the expected selling price when the proect is launched. This land would then be
valued at IDR1.4m/sqm in February 2010.

upon official launching, the customer can opt to buy the remaining 60% land plot at
market price or IDR2.8m/sqm or they can sell their share at market price.

thus if they buy the remaining land plot, they could either get a 20% discount from
the selling price if they decided to sell it, or they could double their investment in
less than a year.
27 MAY 2010
Intiland has sold all of the land plots in Graha Natura under this programme and we
expect that most of the current land owners will buy the remaining 60% of the land
considering the location and the new development concept to be implemented in the
area.
1Q10 shows strong results already
In line with the company’s plan to sell off the land, Intiland recorded IDR278b revenue
in 1Q10 (+190% y-y), compared to IDR387b in 2009. Of the revenue, houses and land
contribute 89% with land plot sales dominating the most (94% of total houses and land
sales). Given high margin in land sales overall gross margin surged to 52.7% and this
helped improve net profit to IDR85b (+2,753% y-y) compared to IDR26b in 2009.
Long track record in the property business
Intiland has been in the property business for more than 30 years with a proven track
record in Surabaya and Jakarta. Among the projects that have already been completed
are the Intiland Towers in Jakarta and Surabaya, Taman Harapan Indah, Pantai Mutiara
and Kota Satelit Surabaya. What differentiates Intiland from the other developers is
their ability to create new trends in the sector; such as sea-front reclaimed area with
jetties (Pantai Mutiara), iconic designs (Intiland Tower) & green building and golf-theme
township development (the first in Surabaya).
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27 MAY 2010
Exhibit 16: Finished Projects
No
Project
Location
Year of completion
Type of property
In Jakarta
1
Cilandak Garden Housing
Cilandak, S. Jakarta
1974
Housing
2
Taman Harapan Indah
Jelambar, W. Jakarta
1982-83
Housing, commercial, apartment
3
Taman Permata Indah
Pejagalan, N. Jakarta
1983
Housing, commercial
4
Taman Mutiara
Pesing, W. Jakarta
1983
Housing
5
Taman Mutiara Prima
Kebon Jeruk, W. Jakarta
1984
Housing
6
Taman Gading Indah
Kelapa Gading, N. Jakarta
1984
Housing
7
West Jakarta Mayor staff housing
Meruya Udik, W. Jakarta
1983
Housing
8
Sidomulyo
W. Jakarta
1984
Housing
9
Youth Center, Desa Wisata
TMII, E. Jakarta
1985
Hotel
10
Cultural Information Center
Pluit, N. Jakarta
1986
Info center
11
Pantai Mutiara
Housing, marine facility
12
Bumi Sarinah Estate
13
Taman Pegangsaan Indah
14
Taman Griya Indah
15
Kondominium Kintamani
16
Menteng Prada Apartement
17
Kemang Pratama 1
18
Pluit, N. Jakarta
1989
Pasar Minggu, S. Jakarta
1989
Housing
Kelapa Gading, N. Jakarta
1991
Housing, commercial
Cipete, S. Jakarta
1990
Housing
Prapanca, S. Jakarta
1997
Apartment
Menteng, C. Jakarta
1997
Apartment
Bekasi, W. Java
1999
Housing
Regency Kemang Pratama
Bekasi, W. Java
2000
Housing
19
Apartemen Pantai Mutiara
Pluit, N. Jakarta
2003
Apartment
20
The Canary (Town House)
Town house
21
Apartemen Semanan Indah
22
Intiland Tower Jakarta (Perkantoran)
23
Pantai Mutiara Sports Club
Pluit, N. Jakarta
2004
Rawa Buaya, W. Jakarta
2004
Apartment
Sudirman, C. Jakarta
1986
Office building
Pluit, N. Jakarta
1989
Sports center
In Surabaya
1
Darmo Baru
Kota Satelit, W. Surabaya
1981
Housing, commercial
2
Wonokitri Indah
Mayjen Sungkono, Surabaya
1982
Housing, commercial
3
Chris Kencana
Mayjen Sungkono, Surabaya
1986
Housing
4
Darmo Harapan
1990
Housing
5
Darmo Indah
1991
Housing
6
Bogasari Residence
1987
Housing
7
Bank Indonesia Housing
1987
Housing
8
PT Sandang Housing
1987
Housing
9
Plaza Segi Delapan
1997
Commercial, school
10
Kondominium Graha Famili
Graha Famili, W. Surabaya
1999
Apartment
11
Grand Bromo Hotel
Probolinggo, E. Java
1990
Hotel
12
Mercure Grand Hotel
Dukuh Kupang, Surabaya
1996
Hotel
13
Apartemen Premier
Dukuh Kupang, Surabaya
1996
Apartment
14
Graha Residen
Darmo Harapan, W. Surabaya
1989
Serviced apartment
Office building
15
World Trade Center, Surabaya
16
Golf Graha Famili & Country Club
17
18
Grand Trawas Hotel
19
Intiland Towers Surabaya
CBD Surabaya
1991
Graha Famili, W. Surabaya
1995
Golf course
Ngoro, Mojokerto, E. Java
1996
Industrial Estate
Trawas, Mojokerto, E. Java
1997
Hotel
CBD Surabaya
1997
Office building
Management team
Most of the management team, excluding the CEO, has been with the company since
the 90’s while the CEO came on board in 2007. This management change followed the
restructuring when IDR1.1t of loans were converted into new shares and the company
changed its name to Intiland Development from Dharmala Intiland.
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TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Exhibit 17: Intiland Development’s Management Team
Name
Lennard Ho Kian Guan
Walman Siahaan
Position
Remarks
President Director & CEO
In the group since 2007
Vice President Director
Suhendro Prabowo
Chief Operating Officer Jakarta
Sinarto Dharmawan
Chief Operating Officer Surabaya
Independent Director
Chief Financial Officer
Irene Rahardjo
Ricky Holil
Archied Notopradono
Investment Management Direcrtor
Utama Gondokusuma
Business Dev’t and Marketing Director
Improving economy means more interest in property
Indonesian economy has been performing well; since 2004 GDP growth has been
above 5%, this growing economy increases the demand for housing. This growth has
also been supported by the availability of single digit mortgage rates, slashed from the
high double digit interest rates of the 1990’s. The ability to buy property is still out of
reach for much of the population; with Indonesia’s per capita GDP of only USD2,500.
However demand from the middle and upper income segments remains buoyant as a
result of their access to the banks and high saving rates.
Property loans only account for 14% of total loans in Indonesia, which is well below in
other Asian countries (which average 30-50%). We do not think that the property
market is saturated yet since demand continues to surpass supply. We would like to
stress that affordability to own a house remains the key driver for this sector. In view of
this, we do not believe that the authorities are likely to put any measures in place that
would place obstacles in the path for affordable homes that could negatively affect the
property market.
We expect interest in the property sector to continue as interest rates will likely remain
low for the next few years while banks still have ample liquidity and inflation rates are
under control. Supported by the expected 5-7% GDP growth in 2010-13 we anticipate
strong demand for property products which should enable developers to reap the
benefit for this cyclical upturn in this industry.
Exhibit 18: Property Loans Have Been Increasing
(IDR t)
250
Total property loan (LHS)
To Total Loans (RHS)
200
Exhibit 19: Correlation BI Rate And Property Index
(%)
(%)
BI rate (LHS)
18
14
JAKPROP index (RHS)
16
12
100
10
10
8
8
6
250
200
150
6
50
300
14
12
150
(index)
4
4
2
2
0
0
Jun-05 Aug-07 Feb-08 Aug-08 Feb-09 Aug-09 Feb-10
100
50
0
0
Jul-05 Apr-06 Jan-07 Oct-07 Jul-08 Apr-09 Jan-10
Sources: Bank Indonesia; Bloomberg; BNP Paribas
Sources: Bank Indonesia; Bloomberg; BNP Paribas
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TJANDRA LIENANDJAJA
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27 MAY 2010
Portfolio overview
Intiland has a diversified portfolio, located primarily in the Jakarta and Surabaya areas,
two most densely populated areas in Indonesia. The portfolio is divided into office
building (investments), township, mixed use & high rise building and others (industrial
estate, hotel chain).
Investment portfolio
Intiland Tower Jakarta
Located in Jl. Jend. Sudirman, Jakarta, the building was built in 1986 as one of the
earliest distinctive high-rise building, designed by Paul Rudolph. It occupies 0.86ha land
with total gross floor area (GFA) of 45,856 sqm and net lettable area of 30,068 sqm.
Occupancy rate is 87% with average gross rental rate of IDR130,000/sqm including
service charge.
Intiland Tower Surabaya
Located in Jl. Jend. Sudirman (CBD), Surabaya, this building is also designed by Paul
Rudolph, occupying 0.47ha land with GFA of 29,413 sqm area. It was completed in
1997 while a 1ha land next to it has been acquired for mixed-use project. Occupancy
rate is 73% with average gross rental rate of IDR128,000/sqm including service charge.
Wisma Manulife
The building, located in Cikini area, was completed in 1995 with land area of 0.46ha
and GFA of 18,211 sqm and net lettable area of 11,687 sqm. Since Manulife, the major
tenant. left the building in 2008, the building has been relatively empty, which has
created the impetus for management’s intention to sell it.
Wisma Sarinah
This is a small office building in Harmoni, Central Jakarta, under a build, operate and
transfer (BOT) until September 2012. It has 69% occupancy rate with average gross
rental rate of IDR87,000/sqm including service charge.
Graha Pratama and WTC Surabaya
Graha Pratama is located in Jl. MT Haryono, Jakarta, with 18,428 sqm net lettable area
and 97% occupancy rate. Average gross rental is IDR86,000/sqm including service
charge. Intiland has 30% stake in the Graha Pratama. WTC is a six-storey building
offering an exhibition hall, multipurpose hall and a trademart in Surabaya. Built in 1991,
Intiland has 32% stake in it with the remaining owned by Bank Mandiri’s pension fund.
Occupancy rate is 98% with average gross rental rate of IDR220,000/sqm including
service charge.
Townships, mixed-use and high-rise projects
Most of the future earnings growth will likely be coming from the township and mixeduse developments in Jakarta.
Talaga Bestari
This 160ha property development was launched in 1996, located in Cikupa, Tangerang,
about 55km West of Jakarta CBD area. The project was not given full attention since
then, however the management now plans to revamp the area again by acquiring more
land to 300ha before relaunching the project targeting for the middle market segment.
The closest competitor in the area is Ciputra’s Citra Raya, which has been popular
despite Talaga Bestari’s easier access to the Jakarta-Merak toll road. Citra Raya’s
owner’s commitment to develop the property and their better financial statement are
likely to be the reasons for their popularity.
Taman Semanan Indah
Started in 1989 TSI is located in West Jakarta as a middle income landed property
development. Total area is 75ha with current land bank of 5.3ha. Intiland plans to sell
the remaining land bank this year to concentrate on new area.
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INTILAND DEV
27 MAY 2010
Pantai Mutiara
This reclaimed area in Pluit, North Jakarta, is intended for up market property with total
area of 100 ha. Started in 1991, most of the area has been sold with remaining 11ha for
the Regatta, consisting of 10 towers for apartment, one hotel and a water park.
Cengkareng
Intiland acquired 232ha land bank in Cengkareng from PT Permata Ratnamulia using
the recent rights issue proceeds. A down payment has been given to the middleman for
the acquisition of another 120ha in the same area, out of the total license to develop
500ha area, located West of the Jakarta International Airport. The company developing
the master plan for the project, which is expected to be launched in 2011. Considering
its proximity to the airport, the project is caters to business travelers who have high
mobility around the region but continue to make Jakarta as their home base. Access to
the area will be through the planned Jakarta Outer Ring Road (JORR) 2, which will
connect to the Jakarta-Merak toll road, Serpong area and Jakarta-Bogor toll road.
Maja, Banten
Intiland acquired 1,090ha of land bank in Maja, Banten, through the acquisition of PT
Wirasejati Binapersada. There is no immediate plan to develop this area, which is
located 50km West of Central Jakarta. The company will develop the area for the
middle income segment when the infrastructure, including double-track railway is
realized.
Graha Famili
Located in West Surabaya, this up market property development has total area of
280ha, including an 75ha, 18-hole golf course, which is designed by Arnold Palmer.
Started in 1992 remaining land bank is 10.8ha and Intiland has 75% stake in the
company.
Isen
Located next to Graha Residen in West Surabaya this 3.1ha development consists of
46 villas, developed since 2007. Most of the units have been sold with only three units
left unsold as of 8 April 2010.
Graha Natura
Located near Citra Raya of Ciputra Group and Graha Famili this will be the next large
property development in West Surabaya, targeting the upper income segment. Total
development area is 86ha of which the company has secured 56ha with official
launching soon. The company has sold off some 250 units to the Grand Famili buyers.
In order to differentiate from other development Graha Natura will have a contemporary
design and open concept with increased green areas to create a healthier environment.
Exhibit 20: Graha Natura – Artist Impression
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27 MAY 2010
Regatta
Pantai Mutiara, North Jakarta: planned for 10 apartments and hotel in 11 ha area. It is
designed by Tom Wright of WS Atkins. The first development is four apartment towers
(three for sale and one serviced apartment - 65% of 276 units are sold with current
price of IDR17.3m/sqm) had been completed and delivered in November 2009. The
second development is 3 towers to start in 2010 and Intiland has 50% stake in the
project.
Exhibit 21: Regatta Apartments In Pantai Mutiara
Megacity
Located in Daan Mogot, West Jakarta, this 20ha area is dedicated for low-cost and
government subsidized apartment project. It is divided into 15 clusters with the first two
clusters consisting of 2,149 units was started in 2009. Intiland has a 40% stake in the
project.
1Park, Gandaria
Intiland will use 1.2ha land in Jl. Gandaria, South Jakarta, to develop 1Park
Residences, 3-tower consisting of 379 unit apartment. About 41% has been sold as of
April 2010 at IDR12m/sqm. Construction is expected to start this year with completion
slated for 2012. The company plans to develop up to 8.7ha in the area; 3.1ha have yet
to be acquired.
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TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Exhibit 22: 1Park Residences – Artist Impression
Graha Famili Festival Walk
Located in Graha Famili, West Surabaya, the area will be turned into a lifestyle area
with al-fresco dining, divided into three zones: office in 2ha land, residential-retail in
4.8ha land and hospital, hotel and serviced apartment.
Intiland Tower Extension
This 1.1ha land, next to Intiland Tower Surabaya, will be developed into a mixed-use
property. The company expects to acquire more land adjacent to it before commencing
construction in the area.
TB Simatupang
This 7.2ha land is currently known as Pondok Klub Villas, located in South Jakarta, with
easy access of Jakarta Outer Ring Road. The area is now developed into commercial
property area with various international companies having their country offices moving
in given the easy access and relatively cheaper prices than in the CBD area. Intiland
buys 90% the company that owns the land from PT Putra Sinar Permaja (PSP) using
the recent rights issue proceeds for IDR450b (IDR7.1m/sqm). The site is
conceptualized as a mixed-use project containing two office towers, two residential
towers with supporting retail space. The current townhouses will be demolished for the
project which will start in 2011.
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TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Exhibit 23: TB Simatupang (Pondok Klub Vila) – Artist Impression
Kebon Melati
The area is located in Central Jakarta, next to Grand Indonesia Shopping Town with
development area of 10ha of which 1.35ha has been acquired and another 1.85ha is
partly (28%) owned by the company. The area will be developed for residential, hotel
and retail, starting late 2011. Intiland plans to develop 10ha in the area, which is close
to the Hotel Indonesia roundabout and Dukuh Atas, the future major interchange hub
for public transportation in Jakarta.
Exhibit 24: Kebon Melati – Artist Impression
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TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Others (industrial estate, small housing cluster, sports centre
and hotel)
In addition to investments, township and mixed-use developments, Intiland has other
projects as well:
Ngoro Industrial Park (NIP)
Intiland has a 50% stake in NIP 1, a 220 ha (left 35ha) industrial estate located 50 km
south of Surabaya (the remaining 50% owned by RSEA, a Taiwanese construction
company). Intiland controls 100% of NIP 2, a 240ha land next to NIP 1, which can only
be sold when NIP 1 has been sold or a company needs extra land that can not be
fulfilled by NIP 1. Infrastructure development on NIP 2 has been started in May 2010
with the plan to sell 30ha of land each year.
Pinang Residence
This is an up-scale residential community with total area of 1.9ha in South Jakarta,
divided into 33 smaller housing units. Intiland starts buying and develop smaller land
plots in order to improve the capital through a faster development. As of April 2010, 10
units have been sold.
Graha Residen
Located in an 8.6ha land in West Surabaya, it has been in operation since 1989 as the
first serviced apartment in town with 124 units. Occupancy rate is 63% but given the low
yield from this mature project, Intiland is considering to either sell the land, rebuild the
project and sell them as landed property or retain some are for investment property
after rebuilding them.
Pantai Mutiara Sports Club (PMSC)
Fully owned by Intiland, it is located in a 3.5ha beach land with around 2,500 members.
It also manages several other smaller sports clubs in Villa Meruya, Taman Surya and
Splash Swimming pool & gym.
Golf Graha Famili and Country Club (GGFCC)
75% owed by Intiland, it covers 70ha land in Graha Famili it is the first golf course
located in a township in Surabaya. Open to public, this country club has around 800
members.
Whiz Hotel
With the experience of a resort hotel for domestic tourists, Intiland is preparing to open
its own hotel chain called “Whiz”, aimed to serve the domestic business travelers in this
2-star plus hotel. The first hotel will be open in Yogyakarta (102 rooms) in June 2010
followed by Semarang (146 rooms) and Surabaya (150 rooms) in 2011. The plan is to
set up 60 Whiz hotels in various major cities in Indonesia, either wholly owned or
through joint ventures with land owner. Investment for the hotel is around
IDR150m/room with half of the staff to be outsourced in order to minimize operating
costs. A typical room (including shower) is 16m2, however room sizes may be as small
as 10m2. Room rate starts from IDR275,000 a night.
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TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Exhibit 25: Whiz Hotel Jogjakarta – Artist Impression
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BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Devil’s advocate
Intiland is expected to show significant improvement in revenue and earnings starting
2010 based upon the assumptions that the condition of the economy remains stable or
shows slight improvement. However, there are certain factors that would have a
negative impact to the expected performance.
Unexpected significant hike in interest rate
A significant increase in interest rate could be a negative for the stock’s valuations for
two main reasons. First, a higher interest rate would likely considerably dampen
demand. However, we reckon that mortgage rates would have to increase at least
200bp from the current level to have an adverse impact on demand. Additionally, we
expect interest rate to remain stable and begin to increase in 2H10 at less than 100bp
within the next 12 months. Second, any interest rate increase should directly affect the
company’s RNAV for the investment projects.
Project development execution
Intiland is developing several property projects simultaneously in Surabaya and in
Jakarta. Although each area has its own management team, there may be some
disruption in terms of time allocation which could potentially delay project completion.
Furthermore, other competitors are also expanding, which could pose a threat to the
group’s human resources.
Land rights issue
Land title dispute, which is not uncommon in Indonesia, could impede the shares from
reaching our target price since court’s decisions can be unpredictable. This risk is
mitigated by the fact that the company has extensive experience so we can reasonably
assume that the company has taken adequate steps to avoid these land rights issue.
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BNP PARIBAS
TJANDRA LIENANDJAJA
FINANCIAL
INTILAND DEV
27 MAY 2010
STATEMENTS
Intiland Dev
Profit and Loss (IDR b)
Year Ending Dec
2008A
2009A
2010E
2011E
2012E
332
(193)
139
0
(89)
51
(10)
0
41
(25)
6
23
0
46
(26)
19
(5)
0
0
14
0
14
387
(203)
184
0
(101)
83
(22)
0
61
(46)
14
29
0
59
(20)
39
(13)
0
0
26
0
26
1,088
(527)
561
0
(148)
413
(22)
0
391
(24)
21
27
0
415
(104)
311
(26)
0
0
285
0
285
1,644
(908)
736
0
(192)
544
(25)
0
518
(4)
25
27
0
567
(142)
425
(34)
0
0
391
0
391
2,776
(1,598)
1,179
0
(258)
920
(31)
0
889
5
29
27
0
950
(238)
713
(41)
0
0
672
0
672
3.93
3.93
0.00
7.11
7.11
0.00
54.97
61.05
0.00
72.71
75.44
0.00
118
130
22.63
1.8
(31.9)
21.6
(30.7)
(30.7)
16.4
64.5
49.8
80.8
80.8
181.4
396.9
537.6
673.3
758.7
51.1
31.6
32.6
32.3
23.6
68.9
69.2
71.5
62.0
71.8
Operating performance
Gross margin inc depreciation (%)
39.1
Operating EBITDA margin (%)
15.2
Operating EBIT margin (%)
12.3
Net margin (%)
4.3
Effective tax rate (%)
57.4
Dividend payout on recurring profit (%)
0.0
Interest cover (x)
2.8
Inventory days
961.1
Debtor days
111.6
Creditor days
384.4
Operating ROIC (%)
2.0
Operating ROIC – WACC (%)
ROIC (%)
3.4
ROIC – WACC (%)
ROE (%)
1.3
ROA (%)
1.8
* Pre exceptional, pre-goodwill and fully diluted
41.9
21.5
15.9
6.6
33.8
0.0
2.3
1,133.5
76.7
382.0
2.9
4.8
2.2
3.4
49.5
38.0
35.9
26.2
25.0
0.0
18.1
457.7
58.0
248.3
11.9
13.2
12.2
9.2
43.2
33.1
31.5
23.8
25.0
0.0
149.1
297.3
75.4
250.1
11.3
12.2
10.5
8.1
41.3
33.1
32.0
24.2
25.0
19.2
214.0
74.9
193.9
17.2
17.8
16.1
12.0
Revenue By Division (IDR b)
2008A
2009A
2010E
2011E
2012E
215
47
27
43
0
269
45
26
46
0
916
85
48
39
0
1,473
82
47
42
0
2,534
125
71
46
0
Revenue
Cost of sales ex depreciation
Gross profit ex depreciation
Other operating income
Operating costs
Operating EBITDA
Depreciation
Goodwill amortisation
Operating EBIT
Net financing costs
Associates
Recurring non operating income
Non recurring items
Profit before tax
Tax
Profit after tax
Minority interests
Preferred dividends
Other items
Reported net profit
Non recurring items & goodwill (net)
Recurring net profit
Per share (IDR)
Recurring EPS *
Reported EPS
DPS
Growth
Revenue (%)
Operating EBITDA (%)
Operating EBIT (%)
Recurring EPS (%)
Reported EPS (%)
Investment and property development
Rental
Service fees
Others
Already booked IDR278b
revenue with IDR85b net
profit in 1Q10
Supported by high margin
from land sales
Mostly from Graha Natura
and Graha Famili in
Surabaya and 1Park
Residences, TB
Simatupang, Kebon Melati
and Cengkareng in Jakata
23
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
Intiland Dev
Cash Flow (IDR b)
Year Ending Dec
2008A
2009A
2010E
2011E
2012E
14
10
(1)
0
23
(236)
0
(43)
(257)
0
0
0
(257)
0
164
(92)
26
22
(1)
0
46
(73)
0
(41)
(68)
0
0
0
(68)
0
(8)
(76)
285
22
5
0
312
288
0
(2,370)
(1,770)
0
0
0
(1,770)
2,073
49
352
391
25
9
0
425
(105)
0
(500)
(180)
0
0
0
(180)
0
(200)
(380)
672
31
12
0
714
(406)
0
(775)
(467)
0
(117)
0
(585)
0
25
(560)
Per share (IDR)
Recurring cash flow per share
FCF to equity per share
6.26
(71.23)
12.90
(18.85)
66.91
(379)
81.99
(34.73)
138
(90.16)
Balance Sheet (IDR b)
Year Ending Dec
2008A
2009A
2010E
2011E
2012E
Working capital assets
697
783
1,013
Working capital liabilities
(504)
(517)
(1,034)
Net working capital
194
267
(21)
Tangible fixed assets
1,325
1,290
3,378
Operating invested capital
1,519
1,556
3,356
Goodwill
12
9
6
Other intangible assets
0
0
0
Investments
0
0
0
Other assets
12
18
49
Invested capital
1,544
1,583
3,412
Cash & equivalents
(64)
(40)
(600)
Short term debt
366
358
407
Long term debt *
1
1
1
Net debt
303
319
(192)
Deferred tax
0
0
0
Other liabilities
97
78
48
Total equity
1,128
1,154
3,512
Minority interests
15
33
45
Invested capital
1,543
1,583
3,412
* includes convertibles and preferred stock which is being treated as debt
1,391
(1,307)
84
3,457
3,541
3
0
0
76
3,620
(570)
207
1
(362)
0
26
3,903
54
3,620
2,019
(1,529)
490
3,743
4,233
0
0
0
125
4,358
(485)
232
1
(252)
0
89
4,457
64
4,358
Recurring net profit
Depreciation
Associates & minorities
Other non-cash items
Recurring cash flow
Change in working capital
Capex - maintenance
Capex – new investment
Free cash flow to equity
Net acquisitions & disposals
Dividends paid
Non recurring cash flows
Net cash flow
Equity finance
Debt finance
Movement in cash
Per share (IDR)
Book value per share
Tangible book value per share
313
310
320
318
678
676
753
752
860
860
26.5
14.3
0.9
(7.5)
26.8
14.9
0.9
0.4
(5.4)
(3.8)
1.1
25.8
(9.2)
(6.6)
1.3
84.6
(5.6)
(4.0)
1.4
-
2008A
2009A
2010E
2011E
2012E
Recurring P/E (x) *
262.0
144.9
18.7
Recurring P/E @ target price (x) *
317.9
175.8
22.7
Reported P/E (x)
262.0
144.9
16.9
Dividend yield (%)
0.0
0.0
0.0
P/CF (x)
164.6
79.9
15.4
P/FCF (x)
(14.5)
(54.7)
(2.7)
Price/book (x)
3.3
3.2
1.5
Price/tangible book (x)
3.3
3.2
1.5
EV/EBITDA (x) **
49.3
32.0
10.0
EV/EBITDA @ target price (x) **
59.2
38.3
12.1
EV/invested capital (x)
2.6
2.6
1.5
* Pre exceptional, pre-goodwill and fully diluted
** EBITDA includes associate income and recurring non-operating income
14.2
17.2
13.7
0.0
12.6
(29.7)
1.4
1.4
8.6
10.5
1.4
8.7
10.6
7.9
2.2
7.5
(11.4)
1.2
1.2
5.2
6.4
1.2
Financial strength
Net debt/equity (%)
Net debt/total assets (%)
Current ratio (x)
CF interest cover (x)
Valuation
For the acquisitions of
land bank in Jakarta,
Cengkareng and Maja,
Banten as well as new
projects
IDR2.1t rights issue in
April 2010
Net cash from 2010 after
the rights issue and sales
of new projects
24
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
NOTES
25
BNP PARIBAS
TJANDRA LIENANDJAJA
INTILAND DEV
27 MAY 2010
NOTES
26
BNP PARIBAS
TJANDRA LIENANDJAJA
DISCLAIMERS
&
INTILAND DEV
27 MAY 2010
DISCLOSURES
ANALYST(S)
Tjandra Lienandjaja, PT BNP Paribas Securities Indonesia, +6221 2358 4935, [email protected].
This report was produced by a member company of the BNP Paribas Group (“Group”)1. This report is for the use of intended recipients only and
may not be reproduced (in whole or in part) or delivered or transmitted to any other person without our prior written consent. By accepting this
report, the recipient agrees to be bound by the terms and limitations set out herein.
The information contained in this report has been obtained from public sources believed to be reliable and the opinions contained herein are
expressions of belief based on such information. No representation or warranty, express or implied, is made that such information or opinions is
accurate, complete or verified and it should not be relied upon as such. This report does not constitute a prospectus or other offering document or
an offer or solicitation to buy or sell any securities or other investments. Information and opinions contained in this report are published for reference
of the recipients and are not to be relied upon as authoritative or without the recipient’s own independent verification or taken in substitution for the
exercise of judgement by the recipient. All opinions contained herein constitute the views of the analyst(s) named in this report, they are subject to
change without notice and are not intended to provide the sole basis of any evaluation of the subject securities and companies mentioned in this
report. Any reference to past performance should not be taken as an indication of future performance. No member company of the Group accepts
any liability whatsoever for any direct or consequential loss arising from any use of the materials contained in this report.
The analyst(s) named in this report certifies that (i) all views expressed in this report accurately reflect the personal views of the analyst(s) with
regard to any and all of the subject securities and companies mentioned in this report and (ii) no part of the compensation of the analyst(s) was, is,
or will be, directly or indirectly, related to the specific recommendation or views expressed herein.
This report is prepared for professional investors and is being distributed in Hong Kong by BNP Paribas Securities (Asia) Limited to persons whose
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Where this report has been distributed by BNP PARIBAS SECURITIES ASIA it is intended for distribution in the United States only to “major
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accordance with FINRA requirements concerning third party affiliated research.
All U.S. institutional investors receiving this report should effect transactions in securities discussed in the report through BNP Paribas Securities
Corp. BNP Paribas Securities Corp. is a member of the New York Stock Exchange, the Financial Industry Regulatory Authority and the Securities
Investor Protection Corporation. Reproduction, distribution or publication of this report in any other places or to persons to whom such distribution or
publication is not permitted under the applicable laws or regulations of such places is strictly prohibited.
Information on Taiwan listed stocks is distributed in Taiwan by BNP Paribas Securities (Taiwan) Co., Ltd.
Distribution or publication of this report in any other places to persons which are not permitted under the applicable laws or regulations of such
places is strictly prohibited.
1
No portion of this report was prepared by BNP Paribas Securities Corp personnel.
Disclosure and Analyst Certification
BNP Paribas represents that:
Within the next three months, BNPP or its affiliates may receive or seek compensation in connection with an investment banking relationship with
one or more of the companies referenced herein.
The analyst(s) named in this report certifies that (i) all views expressed in this report accurately reflect the personal view of the analyst(s) with
regard to any and all of the subject securities and companies mentioned in this report; (ii) no part of the compensation of the analyst(s) was, is, or
will be, directly or indirectly, relate to the specific recommendation or views expressed herein; and (iii) BNPP is not aware of any other actual or
material conflicts of interest concerning any of the subject securities and companies referenced herein as of the time of publication of the research
report.
Recommendation structure
All share prices are as at market close on 26 May 2010 unless otherwise stated. Stock recommendations are based on absolute upside (downside),
which we define as (target price* - current price) / current price. If the upside is 10% or more, the recommendation is BUY. If the downside is 10% or
more, the recommendation is REDUCE. For stocks where the upside or downside is less than 10%, the recommendation is HOLD. In addition, we
have key buy and key sell lists in each market, which are our most commercial and/or actionable BUY and REDUCE calls and are limited to at most
five key buys and five key sells in each market at any point in time.
Unless otherwise specified, these recommendations are set with a 12-month horizon. Thus, it is possible that future price volatility may cause a
temporary mismatch between upside/downside for a stock based on market price and the formal recommendation.
*In most cases, the target price will equal the analyst's assessment of the current fair value of the stock. However, if the analyst doesn't think the market
will reassess the stock over the specified time horizon due to a lack of events or catalysts, then the target price may differ from fair value. In most cases,
therefore, our recommendation is an assessment of the mismatch between current market price and our assessment of current fair value.
Rating distribution (as at 26 May 2010)
Out of 545 rated stocks in the BNP Paribas coverage universe, 356 have BUY ratings, 110 are rated HOLD and 79 are rated REDUCE. Within
these rating categories, 2.81% of the BUY-rated companies either currently are or have been BNP Paribas clients in the past 12 months, 3.64% of
the HOLD-rated companies are or have been clients in the past 12 months, and 1.27% of the REDUCE-rated companies are or have been clients in
the past 12 months.
Should you require additional information please contact the relevant BNP Paribas research team or the author(s) of this report.
© 2010 BNP Paribas Group
27
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