Sep 24, 2017 09:04:18

We met with Summarecon Agung’s ($SMRA) management to get the latest insight on the company’s performance with the following key takeaways:

Management maintain FY17 presales target at IDR3.5trn and remain confident target will be achieved through several new launches in this 2H17. 8M17 presales was booked at IDR1.84trn or 53% from company’s target and 68% from our target.
o Several upcoming new launches in this 2H17 are:
o Bekasi – Burgundy phase 2 in 23 Sept, with total target proceeds of IDR210bn
o Serpong – Symphonia landed houses in Oct, with total target proceeds of IDR 450bn
o Bandung – residential and commercial launches in 4Q17, with total target proceeds of around IDR660bn.
o Karawang – Residential launch in 4Q17, with total target proceeds of IDR200bn.

Though confident for this year, management’s view towards 2018 was rather conservative with flat target marketing sales as it is near election year.

Regarding gearing position, there will IDR900bn of bonds due in 2018. The company plans to refinance the bond by using its several of internal cash plus issuing another bond. The company targets to lower its debt/equity ratio to 90%.

Maintain Neutral call with TP of IDR1,125 implying 60% discount to NAV. (Yualdo Tirtakencana)