Jan 20, 2017 11:31:28

We have a quick update on Indonesia’s leading industrial estate developer, Bekasi Fajar – $BEST. It posted strong sales in last quarter of 2016 and decent start in 2017.

Strong 4Q: Bekasi Fajar booked 24.3ha marketing sales in 4Q16, 78% of its FY16 sales (~31ha). Strong 4Q16 allowed the company to meet company’s FY16 target of 30ha.

2016 ASP +23% YoY: 2016’s average selling price was IDR2.7mn/sqm, +23% YoY from IDR2.2mn in the previous year.

Indication: the company indicated relatively strong 2016’s revenue, which may reach ~IDR800bn (118% of consensus). EBITDA margin is expected to stable around 60% level. Based on the given info, we estimate 2016 bottom line may reach IDR340-400bn (121% - 143% from consensus).

2017 target: flattish volume & ASP. This year, management targets 25 – 30 Ha of marketing sales (similar to 2016 target). 2017 capex allocation will be IDR700 – 800bn that includes potential 20 Ha of land acquisition.

Decent start and outlook: Bekasi Fajar already booked 7 Ha marketing sales this January (23% of FY17 target) with similar ASP of 2.7mn/sqm. The company has received some inquiries for this year and expect to close another 10 Ha in 2Q17.

Currently Bekasi Fajar is traded at 11/9x consensus PER 2016/17 with consensus NAV per share of IDR573. (Yualdo Tirtakencana Yudoprawiro)