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Apr 12, 2017 12:48:49

Intiland Development ($DILD), Meeting Notes:

  • This year the company will launch two projects; Kebon Melati and Darmo Harapan, which was delayed from its original schedule in 4Q16.
     
  • The company formed a joint-venture with GIC Singapore to manage South Quarter mixed-use complex. The announcement was released on 3 April2017.
     
  • Intiland will have 60% in the JV and GIC 40%. The JV will develop South Quarter Phase 2 which comprises of two condominium towers and expected to launch in 4Q17 or 1Q18 the latest.
     
  • Management also indicates there were inquiries for more than 10 ha of industrial lands that is potential to be closed soon.
     
  • 1Q17 marketing sales has yet to come out, but management gave a hint it may be less than IDR300bn.
     
  • This year, the company targets marketing sales to reach 2.3trn (+41% YoY)with revenue to reach IDR2.5trn (+10% YoY) - 2.7trn (+19% YoY).
     
  • Capex is allocated around IDR1trn – 1.5 trn that will be used to construct currently on-going high rise projects such as Praxis tower 4, Spazio Tower, 1 Park Avenue tower 4, and Regatta Phase 2.
     
  • Currently the stock is trading at 12.3x FY17F P/E. We have yet to make adjustments to our forecasts. Maintain BUY with TP IDR675 implying 50% discount to RNAV.
     

Cancellation of Property Progressive Tax Plan:
Regarding the regulation about progressive tax, the Government has said that they will not implement progressive tax for unoccupied property due to the weakness in the sector. The regulation will be reconsidered and there are currently no immediate decisions. The Ministry of Agraria and Spatial Planning said that the notion of progressive tax must be appropriate with the economic condition, and it will be discussed with other ministries.

We view this as positive news for property sector because we see the progressive tax to be a burden for property owners and buyers. We understand that the Government wishes to increase their tax revenue through property sector, however we have not seen any clear direction by the Government regarding the planned progressive tax. We also view that the plan for progressive tax overlaps current policies such as LTV and final sales tax for property. Therefore, the cancellation of this plan brings relief to the property sector. (Yualdo Tirtakencana)

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