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P H
Feb 22,2017 11:18:02

Bumi Serpong Damai to boost sales of commercial segment

Bumi Serpong Damai ($BSDE) increase revenue target of commercial segment by 71% through the launching of three apartment and office building projects including The Element in Rasuna Epicentrum area, South Jakarta, South Gate Tanjung Barat, South Jakarta as well as an mixed used project that consists of office building an AEON Mall. The company targets pre-sales of commercial projects could contribute around IDR2.85trn of total pre-sales target amounted to IDR7.22trn for 2017. Furthermore, the company allocates capex of IDR3trn -IDR4trn in 2017 that would be used to fund the projects. The company expects its recurring income to grow by 20%-25% in the next five years. (Kontan, Bisnis Indonesia)

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P H
Feb 22,2017 11:14:25

Property: Real Estate - Towards a More Positive 2017

The majority of companies we spoke with have expressed more positive views for 2017, as evident in the 34% YoY growth in targeted aggregate marketing sales to IDR31.6trn. This supports our OVERWEIGHT view on the sector for 2017, where the companies’ aggregate presales target is in line with our presales target of IDR31.7trn. Indonesian developers under our coverage booked an aggregate 15% YoY decline in marketing sales in 2016, due to weaker macroeconomic conditions and uncertainties prior to the implementation of the tax amnesty programme.

  • Political factors may impact presales in 1H17. The current nationwide governers’ elections may lead to soft presales in 1H17 in our view, as developers are unlikely to launch large projects due to political uncertainty (assuming two rounds of elections). We may see more project launches starting early 2H17 after the end of the elections. Other factors that may delay property launches include the Government’s plan to tax idle land, although this is still in discussions and we believe the companies’ confidence levels remain intact despite this issue.
     
  • 2016 performance review. We believe that the drop in 2016 marketing sales was due to several factors such as weakening macroeconomic conditions (4Q16 GDP at 4.9% vs 5.2% in 2Q16), the Government’s aggressive taxation drive, concerns on IDR stability, and uncertainty prior to the execution of the tax amnesty programme during 1H16.
     
  • Catalysts in place, ready for realisation. Throughout 2016, several positive drivers were launched in the sector including:
    i. Foreigners being allowed to purchase property under “rights to use” title;
    ii. Relaxation of loan-to-value (LTV) threshold;
    iii. “Off-plan” properties being allowed for second mortgages;
    iv. Reduction in final sales tax to 2.5%;
    v. Lower mortgage rates due to the declining Bank Indonesia (BI) rate.

    We believe that the impact from these catalysts were not fully translated into 2016 presales due to several events and the realisation of aforementioned risks. Nevertheless, we see limited downside given that the sector underperformed JCI by 8.5% as at the end of Dec 2016, reflecting investors’ concerns over the sector. Going forward we believe these uncertainties should clear with the above positive catalysts in place.
     
  • Increasing demand for mortgages. Based on data points (Figure 3) we see a shift in payment method from cash instalments to mortgages, as a result of the declining BI rate in 2016, as well as relaxation of the LTV threshold. We expect this trend to continue as mortgage rates are getting more competitive in the single-digit range (Figure 4). We are still of the view that BI would cut rates by another 25bps going forward.
     
  • Attractive valuations. The sector is currently trading at a 64% discount to RNAV, around -1.6SD from its past 3-year mean of 56%. We continue to favour companies with healthy balance sheets and sufficient landbank, as landed houses remain the most popular type of property to buy. Our Top Pick is Bumi Serpong Damai ($BSDE), which currently trades at a 64% discount to its RNAV, and is supported by a huge landbank totalling 4,092ha, a low net gearing level of 0.1x, and FY17F earnings growth of 20% YoY. (Yualdo Tirtakencana Yudoprawiro)

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P H
Jan 23,2017 15:30:10

Indonesia Property
Another Day of Sun

Maintain POSITIVE; Top BUYs: $BSDE, $CTRA, $BEST
Maintain POSITIVE view on Indonesia’s property sector despite disappointing pre-sales in 2016. We’re confident there’s still room for pre-sales to grow in 2017 even though we don’t expect any further interest rate cuts. Factors that support our view are the stable currency and interest rate from rising commodity prices and benign inflation. On aggregate, we are looking at +23% YoY pre-sales growth in FY17, to be mainly driven by low-middle residential segment. We are also positive on industrial estates from tax amnesty inflow and strong inquiries from corporations. Top BUYs: BSDE, CTRA and BEST.

Prefer mass market residential segment
Even with the current interest rate, major banks are still offering competitive single-digit mortgage rates. We believe this is sufficient to support affordability of the mass market residential segment. Full-year impact of LTV relaxation in 2017 will also help to encourage demand for this segment. On the other hand, we are still wary about the middle-high residential and office segments.

Positive outlook for industrial estates
We highlight industrial estates’ notable steady growth in quarterly sales volume in 2016. Several developers mentioned they have been receiving many inquiries from both foreign and domestic corporations which have boosted their confidence on 2017 pre-sales. Domestic corporations have benefitted from their participation in the tax amnesty program, allowing them to invest their assets through industrial land.

Valuation and risks to our view
Sector currently trades at -2SD of the average 1-year forward P/BV and a discount to RNAV. Risks to our positive view on the sector include political risk, uncertainty in global economic outlook, interest rate hike, regulatory risk, currency volatility and inability to increase land banks.

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P H
Jan 23,2017 12:14:32

Bumi Serpong Damai ($BSDE), Notes

Bumi Serpong Damai is a township developer with 5,950 ha area. The company is the largest property company in term of market capitalisation, IDR36trn/USD2.6bn. Accroding to Bumi Serpong, its mortgaged buyers increased to 70% of total customers in 2016 (versus 55% in 2012) thanks to lower mortgaged rate. Although increased significantly, mortgaged loan to GDP is still very small, is around 6% of total GDP. By end this week, Bumi Serpong likely to announce figure of FY16F presales number. Notably, Bumi Serpong's 11M16 presales achieved at around 90% of its target, achieved IDR6.2trn (versus IDR6.9trn target in FY16.

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P H
Jan 20,2017 11:30:04

Bumi Serpong Damai ($BSDE): Company visit: 2017 outlook
Property: Indonesia

-  Uptrend in quarterly marketing sales of c.IDR6.1tn in 2016: Supported by its “price amnesty program” for its BSD City project, BSDE recorded around IDR2tn of marketing sales in 4Q16, cementing an uptrend since 1Q16 (Exhibit 6). The company provided discounts of up to 15% during phase I (Oct–Nov), which resulted in c.IDR1.1tn of pre-sales, while another c.IDR900bn was achieved during phase II (Nov–Dec) given lower discounting. As a result, BSDE expects 2016 marketing sales to reach around IDR6.1tn, or 90% of its full-year original target, in line with our full-year estimate. We expect to see 9% y-y marketing sales growth in 2017, of which 72% of total sales would be derived from the BSD City project. This report marks a transfer of analyst coverage.
 
-  Additional 2017 top-line growth from 2 JV projects: Backed by BSDE’s two recent JVs – the Balaraja toll road and the Mitsubishi Smart Living project – we expect the company to book an additional c.IDR1.8tn of revenue this year. Total land sales value for the Balaraja toll road should be around IDR900bn (50ha area x IDR1.8mn/sqm ASP) for the first 10km out of 30km of total toll-road length. BSDE holds 50% equity in this project, while both Astratel and Kompas control the other 50%. The Mitsubishi project, which consists of landed and shop houses, has total estimated value of c.IDR1.4tn (19ha land area x IDR7.5mn/sqm ASP), of which IDR500bn was booked in 2016 with the remainder to be recorded in 2017.    

-  New project launches in Jakarta and Surabaya: Apart from BSD City, BSDE is expanding further into regional areas, having launched two apartments in Jakarta: (1) Southgate, located in Tanjung Barat, with starting prices at IDR30mn/sqm; a mixed-use development project with a retail mall, offices, apartments, a hotel and condos for sale; and (2) Aerium, located in Taman Permata Buana, with 1.8ha of land area comprised of a two-tower condominium and several townhouses for sale. This is a JV project with Itochu, a multinational general trading company based in Japan, with BSDE owning a 51% stake. In addition, the company is planning to launch one of six new apartment towers (1,000 units/tower) in Benowo, Surabaya, with starting prices of IDR300mn/unit.  

-  Benefiting from operation of UNVR’s new office: Unilever Indonesia ($UNVR) is moving its headquarters to BSD Green Office Park in January–February of this year, bringing some 7k workers to the benefit of BSDE’s residential area project in BSD city. As such, we expect the land ASP in BSD City to rise from IDR12mn/sqm at present to IDR13.5mn/sqm in 2017.    

BUY with unchanged IDR2,350 TP
Recent market outperformance (Exhibit 4) likely was based on solid pre-sales. We believe this is sustainable due to BSDE’s expansion beyond its property development in BSD City, providing longer-term growth and stability through geographic diversification. We apply a 55% discount to our end-2017F NAV to determine our unchanged IDR2,350 12M TP. Risks: BSD City infrastructure delays and higher high-rise property demand.

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P H
Dec 14,2016 08:06:02

Property (Overweight), ‘Tis The Season To Be Jolly About Mortgages
 
Our ground checks reveal that commercial banks are stopping their promotional mortgage rates. However, as they are aiming for double-digit mortgage growth rates next year, we expect them to re-introduce packages at lower rates as well – since the rates do not yet reflect the latest cut made by BI in Oct. Note that the combination of the relaxation of LTV thresholds and lower mortgage rates following the BI rate cut during 3Q16 resulted in a shifting of consumer preferences back to obtaining financing for properties via a mortgage.
¨ Promo on hold, but... we learnt that some banks are stopping their promotional mortgage packages this month. The current normal mortgage rate has a fixed interest rate of 9.5-10.25% for one year. Bank Central Asia (BCA) ($BBCA) is still offering the lowest mortgage rate with its latest Fix & Cap promotion, ie 7.99% pa fixed interest for the first three years and capped for a further three years at 8.99% pa. This is almost 50bps lower than what was offered in its previous Fix & Cap promotion. However, we believe IND Banks would continue to introduce lower mortgage rates in the future as:

i. Banks are aiming for double-digit growth in their mortgage segments in 2017. BCA and Bank CIMB Niaga ($BNGA) are aiming for 12% and 9-10% mortgage loan growth respectively;

ii. Based on research by rumah123.com, the most important factor in buying properties is the Bank Indonesia (BI) rate. Most buyers still utilise mortgage facilities to purchase properties. This is also reflected in the trend shifting back towards taking a mortgage as a payment method during 3Q16. This is due to a combination of the relaxation of the loan-to-value (LTV) thresholds and lower mortgage rates following BI’s rate cut.

As such, we expect banks to start re-introducing their respective mortgages at lower rates earliest by Jan 2017. Their current mortgage rates do not yet reflect the latest BI rate cut, which was made in October. Note, also, that presales activities in December are more moderate.

¨ Maintain OVERWEIGHT. We keep our OVERWEIGHT rating on the sector, as we expect a better outlook in 2017 as the following factors have already been priced in:

i. All the catalysts that include the tax amnesty;

ii. A potentially lower benchmark interest rate;

iii. The relaxation of the LTV threshold;

iv. The allowance for properties under construction to come under a second mortgage.

The share prices of property counters under our coverage have softened following public protests on 4 Nov that demanded incumbent Jakarta governor Basuki Tjahaja Purnama, commonly known as Ahok, be arrested for blasphemy. Share prices dropped further after the US election was concluded on 9 Nov. On average, share prices have plunged 9% YTD since 4 Nov. These numbers have recovered by 5% on average from their lowest level during the same period. Nonetheless, the sector is currently valued at a 65% discount to RNAV, or around -1.5SD from its 3-year mean of 56%, which looks compelling. (Lydia Suwandi)

$CTRA $ASRI $BSDE $SMRA $APLN $BKSL

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P H
Nov 30,2016 11:45:12

Indonesia Strategy: Managing Volatility
We opine that Indonesia’s fundamentals remain pointed towards long-term positives. This is underpinned by BI’s pro-growth policies to propel economic growth, the low inflation environment, continued government focus on infrastructure spending, and the security forces’ exemplary conduct in maintaining stability as political tensions rise. Thus, we expect stronger market direction post the Fed’s anticipated rate hike in December.

¨ Outflows dominate. Worries over a potential US Federal Reserve (Fed) rate increase and weakening IDR have triggered outflows in both the equities and fixed income markets. This is a reversal after months of inflows. Post Donald Trump’s win in the recent US elections, the JCI continues to trade at sub-5,200 level, with outflows recorded at IDR9.6tnin November. Similarly, outflows in the fixed income market have deepened, reaching IDR17trn over the past month, with the 10-year government bond continuing to escalate to 8.3% (August: +6.3%). Arguably, a lack of catalysts in the market have also led to the insipid performances, and we are only expecting stronger market direction post the Fed rate increase that is expected by mid-December.

¨ The three spectres are currency, interest rate trends and politics. As highlighted in our 14 Nov 2016 Currency Woes Dampen Sentiment report, the fundamentals still point towards a resilient IDR. This is underpinned by its high-yield differential vs developed market (DM) economies and peers, relatively high levels of growth among major emerging market (EM) economies, and ongoing reforms. Rising current account deficit (CAD) over the next few years is still manageable, while forex reserve levels also improved to USD115bn.

¨ Action by Bank Indonesia (BI) to intervene in the currency market is plausible to indicate direction. An influx of asset repatriation is also expected towards year-end, which would help the IDR to recuperate to a more favourable level. We opine that BI would maintain its current relaxation bias policy to propel economic growth, especially given the subdued inflationary outlook. As the series of rate cuts have yet to result in a meaningful economic trajectory, it is unlikely that the central bank would take the risk by reversing its current relaxation policy.

¨ Over the past five years, the spread between the BI rate and inflation has averaged 130bps vs the current 145bps spread. This provides room for further relaxation if needed. We expect BI to maintain its current benchmark rate until year-end, and potentially make another 25bps cut in early 2017 to further support economic growth under stable IDR circumstances.

¨ Jakarta Governor Basuki Tjahaja Purnama’s alleged religious defamation has raised the political landscape’s temperature, as seen by the magnitude of the anti-Basuki rally that occurred earlier this month. This upheaval is negatively perceived by investors, especially after >2 years of stable politics. The market is likely to take heed of the next rally and, more importantly, how the Government handles the situation. So far, the security forces have been exemplary in restoring stability. We continue to believe that the Government’s position remains strong. As long as these forces remain united under presidential control, any act that destabilises the country can be brought under control quickly.

¨ Commodity plays and blue chips. We like PP London Sumatra (Lonsum) and United Tractors as commodity plays. Bank Negara Indonesia (BBNI), Astra International, Ciputra Development, Bumi Serpong Damai (BSD), Telekomunikasi Indonesia (Telkom), Indofood Sukses Makmur and Waskita Karya are all stocks with strong fundamentals. (Helmy Kristanto)

$LSIP $BBNI $CTRA $BSDE $TLKM $INDF $WSKT

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P H
Nov 23,2016 18:54:26

Property: Stay The Course

Share prices of property counters under our coverage have fallen 25% YTD (on average) from their highest levels. With catalysts for the sector in place and with limited downside risk, the sector is currently valued at a 63% discount to RNAV, around -1.4SD from its past 3-year mean of 56% – which looks compelling. Maintain OVERWEIGHT on the sector, while we remain bullish on companies with low gearing ratios, healthy operating cash flow and sufficient landbanks.

¨ Policy rate reversal? We believe a reversal of Bank Indonesia’s (BI) policy rate (Figure 1) is unlikely, as:

i. Indonesia’s real interest rate is positive, at+1.4%;

ii. The BI’s benchmark rate has a wide discrepancy vs that of other countries.

Also, as there is greater uncertainty in the global financial markets in the wake of the US election results, we still think BI will slash its key policy rate by another 25bps to support economic growth – and this may happen as early as 1H17. This is on the expectation of moderate inflation, a manageable current account deficit amid external headwinds for the IDR due to the US Fed Funds rate hike.

¨ Currency impact on earnings. We believe currency fluctuations should have no significant impact on property developers’ earnings, as their costs and revenues are denominated in IDR. For companies with large USD debt exposure – such as Lippo Karawaci and Alam Sutera, where 84% and 80% of their debt is USD – forex gain or loss would be realised only when the debt matures. Our sensitivity calculations indicate that every 2% increase/decline in our forex assumption could result in a 9%/6% decline/increase for Alam Sutera (ASRI)’s earnings and a c.3% decline/increase to Lippo Karawaci ($LPKR)’s net profit in FY17 respectively. We think this is not significant, and would be just a paper profit (or loss) in their books – in terms of recording an unrealised forex gain(or loss) – since both companies’ bonds will mature in 2022.

¨ Accelerated recovery in 2017. We still expect the sector’s recovery to accelerate in 2017 vs this year, based on catalysts like the tax amnesty, a potentially lower benchmark interest rate, relaxation of the loan-to-value (LTV) threshold and the allowance for properties under construction to come under a second mortgage. We note the increased presales activities in October and November. YTD, marketing sales on average have hit 63% of ourFY16F presales target, coupled with potential big commercial land lot sales in pipeline which also reached our targets. As for FY17, we expect presales to grow 12% YoY to IDR31.7trn,as developers continue targeting the middle class segments, selling property with prices ranging between IDR1bn and IDR2bn per unit.

¨ OVERWEIGHT. We continue to favour companies with healthy balance sheets and sufficient landbank, as landed houses are still the most popular type of property to buy (Figure 4). Our Top Pick for the sector is Bumi Serpong Damai ($BSDE). The counter is currently trading at a 66% discount to RNAV, supported by huge landbank totalling 4,092ha, a low net gearing level of 0.1x and FY17F earnings growth of 20% YoY.

¨ Risks include economic slowdown leading to declining purchasing power, slower revenue recognition, as well as external factors such as global financial uncertainties that may indirectly or directly influence investor sentiment. (Lydia Suwandi)

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P H
Nov 10,2016 23:01:55

Trump victory - the impact on Indonesia
 
JCI went into considerable correction, down as much as 2.4% during the intraday, following the prospect of Trump’s winning. Selling pressure were visible across sector, with IDR also depreciated 0.9%. Closer to end of trading hour, market slightly improved mainly led by a rebound on commodity counters, with index closed down 1% with IDR relatively flat.
 
The Trump’s winning undoubtedly creates uncertainty, especially on the execution and direction of what would be the policy under his administrative, on both economy and politic. According to our economist, historical facts imply that a clean sweep tends to be more positive for the US economy in general because of less gridlock. As such, with Republican sweep (Trump President and GOP Congress), fiscal policy, both from higher spending and lower taxes, is likely to be more expansionary over the next four years on average. It is still too early to conclude for any potential downward revision on economic growth at this stage.
 
One of the main concerns of the Trump administration would be on potential trade protectionist (anti-trade) issue. In regards of Indonesia, the main export products to the US would be textile, rubber product, shoes, electronics and F&B with export to US accounts for 12% of total non oil and gas export. However, the impact the share of export to GDP in Indonesia remains the lowest in the region at 22% (Vs Thailand’s 58%, Malaysia 73% and Singapore 198%), which would provide much-needed shelter under global economy volatility circumstances. Domestic consumption and government-led infrastructure spending continue to serve as the underpinning factors for economic growth improvement and we still expect economy growth at 5.3% in 2017.

Our economist still expect that the Fed is likely to go ahead with its tightening policy bias and raise rate by 25 bps this December. As such, one of the palpable risks would be on currency of which IDR has enjoyed 5% appreciation ytd. Any sudden increase in volatility could risk of escalation of importation of raw material and potential cost overrun in certain infra projects, which undoubtedly will led to inflation and growth risk. In our view, this risk would be contained, especially as: 1. Indonesia rising forex reserve of USD115b and expected to reach USD150b by 2017; 2. Repatriation fund inflow by end of the year; and 3. Record low inflation outlook at sub-4% level.
 
Acknowledging potential change in global trade and politics, Indonesia with its domestic consumption at the core, remains to offer attractive investment thesis. At this stage, we see no change on Indonesia fundamental investment story, and maintain our constructive view mainly underpin by macro improvement and government-led infrastructure investment. Our top picks in the market mainly comprise of company with strong balance and visible earnings growth and they are: $BBNI, $CTRA, $BSDE, $TLKM, $INDF and $WSKT. To play on the positive rally on the commodity, we like LSIP and UNTR. (Helmy Kristanto)

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P H
Nov 08,2016 19:08:47

Escalation in political tension; Macro improvement remains intact

While demonstration arguably has became part of life in Jakarta, last Friday’s demonstration would be one of the largest, reported to gather c. 50,000 people. The action were joined by many Moslem organisations from several regions to protest against Basuki T. Purnama (Ahok) on the allegation of religious defamation. The demonstration was mostly running in peace and calm order, but suddenly escalate into chaos at c.6 pm, the cut off time limit given by police. Couple of police trucks were burned with several casualty was reported on both side. The chaos only occurred in two specific locations, outside the Presidential Palace and one location in North Jakarta, with one Indomaret convenience store was looted. On Sunday, the police mentioned that the perpetrators of chaos in North Jakarta were unrelated to the one in Presidential Palace, and appears to be purely criminal act.

3 key messages from President Jokowi

We were encouraged by the way of the police and army to act quickly to restore the stability with tear gas, water cannon and truncheons, with strict order that rubber bullet was not allowed to be used. The situation was mostly under control past midnight.

Presiden Jokowi held press conference on early Saturday, with 3 key messages: 1. He condemned the chaos and violent demonstration;2. The legal process of Jakarta governor alleged transgressions would be concluded quickly and transparently and 3. Political actors are believed to ride on yesterday's chaos. In our view, the third points would signify escalation of political tension, which would led the government to make stronger intelligence effort and beef up security to prevent the whole situation to heighten. President Jokowi has also delayed his trip to Australia (scheduled: 6-8 Nov) to focus in restoring domestic stability.

Negative pressure is expected but macro improvement is still on tract

JCI has priced in a peaceful rally on Friday, with index closed up +0.6% ( +1.1% from Friday's low). Selling pressure is expected to happen on Monday, especially on the potential higher volatility of IDR.

There is also growing concern in relation to the prospect of asset repatriation under the current tax amnesty scheme. While the repatriation has been reported to the tax office, the physical transfer of that assets are still underway, with deadline by end of December. As such, it is imperative for the government to act quickly to restore confidence.

Despite Friday’s chaos, we see no change on Indonesia fundamental investment story, underpin by macro improvement and government-led infrastructure investment. Our top pick in the market are: $BBNI, $CTRA, $BSDE, $TLKM, $INDF and $WSKT.

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P H
Nov 08,2016 19:03:19

Bumi Serpong Damai ($BSDE) adds 141.83ha of land bank

Up to 9M16, $BSDE has increased their land bank with an additional of 141.83ha of land. The company has allocated Rp1.26tn from internal cash for land banking purposes up to 9M16. As of Sep’16, the company has raked in Rp4.1tn of marketing sales or 60% of FY16 marketing sales target and about 63% (Rp2.6tn) of the pocketed marketing sales coming from residential segment.

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P H
Sep 13,2016 21:54:09

Bumi Serpong Damai: Leaving No Stone Unturned

BSD indicated that YTD presales have reached 50% of its FY16 target. We believe the remainder should be easily achieved, given that:

1. Property demand has started to pick up;
2. New upcoming launch at Southgate Residence (Tanjung Barat) is targeted to generate presales of IDR248bn;
3. BSD is in negotiations to sell one big commercial land lot by end-2016.

SOP-based TP is lifted to IDR2,650 (from IDR2,540, 27% upside), as we roll over our valuation base year to FY17. Our TP impliesFY16/17F P/Es of18.5/16.2x. BUY call maintained.

¨ YTD presales reached 50% of target. Bumi Serpong Damai (BSD) indicated that YTD presales have reached IDR3.45trn, or 50% of ours/company’s target. Pickup in demand has been seen since July. In fact, BSD achieved presales of IDR320bn during the 10-day Gaikindo Autoshow in August, which was 28% higher than last year when they first set up a booth at the same event.

¨ Demand-side affordability should be supported by recent passing of the tax amnesty bill, low mortgage rate environment, and allowance for off-plan properties for second mortgages. Meanwhile, BSD’s diversified portfolio, which caters to all affordability ranges, and lowered final tax for developers(to 2.5%), should support the achievement of its remaining presales target.

¨ New high-rise launch. BSD will commence launching of its mixed-used superblock in Tanjung Barat, Southgate soon. It will initially launch Southgate Residence – two apartment towers to be built above AEON Mall. The company recently started gauging interest with the collection of refundable booking fees totalling IDR25m. The exact grand launching date has not been disclosed but BSD is targeting to generate presales of IDR248bn from Southgate.

¨ Discounting to narrow. Price range for the units will be between IDR1.2-2.8bn each, equivalent to IDR30m/sqm orat a 30-40% discount to surrounding peer development projects priced at IDR45-50m/sqm. Price discounting should narrow in our view (Figure 2), given that BSD’s project is:
i. Largest superblock area compared to its peers;
ii. Near to commuter lines;
iii. Integrated with the upcoming AEON shopping mall.

¨ Maintain BUY, new TP of IDR2,650. We roll over our valuation base to FY17, leading to our SOP-based TP being lifted to IDR2,650. Other potential catalysts include possible commercial land lots being sold, which will contribute to this year’s presales. No further information has been disclosed as negotiations are still underway. The stock is still trading at a hefty 61% discount to our RNAV estimate of IDR5,310/share. Key risks to our call include lower-than-expected presales, and delays in construction projects. (Lydia Suwandi)

$BSDE

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P H
Aug 29,2016 22:08:56
Indonesia Equities: Pricing In Near Term Positives

Key Points

- +9% gains in MSCI Indonesia since our country upgrade in July - Since our upgrade of Indonesian equities to overweight two months ago in the MIG publication after clarity on its tax amnesty programme emerged, sentiment has further improved following the appointment of well respected Finance Minister Sri Mulyani Indrawati. The Indonesian equity market has seen strong equity inflows in 3Q16 lifting the index up ~9% (local currency terms, +8.2% in USD), which has outpaced world equities’ gains (+5.2%) for the same period and supported our call.

- Year to date’s gains of +18.6% has also more than recouped 2015’s losses of -12%, which has supported the turnaround highlighted in our January 2016’s South East Asia Equity Strategy report. The equity market rally year to date has been supported by a benign environment of lower interest rates, stable IDR currency vs the USD, under-owned positions in global portfolios and improving confidence in Indonesia’s recovery story. Estimated equity inflows into Indonesia so far for 3Q has exceeded the total inflows for 1H16, driving the market to new highs. Since mid May this year, it is estimated that net equity inflows reached $1.7bln, vs $1.6bln net outflows over the whole of 2015 (source: JPM estimates).


- Near term positives post amnesty and cabinet reshuffle look priced in, valuations are now close to 10 year high – At 16x PER, Indonesian equities is now trading close to +2 standard deviations to its 10 year historical average multiple and at its highest valuation level since 2007, which we believe has priced in much of the near term positives. Although near term liquidity is likely to remain supportive given benign expectations on interest rates, we caution that valuations have caught up and believe it is prudent to start taking some money off the table. On domestic updates, while the recently released 2017 budget is credible, it is unlikely to lead to further corporate earnings upgrades given a moderate government spending target of 6% (planned fiscal deficit for 2017 is 2.4% of GDP, flat/lower than 2016E). Towards the end of September and December which marks the first and second phases of the tax amnesty programme’s staggered tax rates for declared wealth, investor sentiment may also be influenced by expectations over the tax collections.


- Muted start to the 9-month tax amnesty programme, although still early days - As of 23rd August 2016, the asset declaration in the Tax Amnesty Program has reached Rp51.7tn, consisting of 85% onshore/15% offshore assets (12% overseas assets declared, 3% overseas net assets repatriated), while asset repatriation has reached Rp1.6 tn. Momentum of onshore assets declared in first half of August has picked up, with the tax office reporting about Rp11.5tn worth of onshore assets declared (>4x July’s). About three-quarters of the assets declared were from private individuals, and the balance private entities, which we view as supportive of property sector’s recovery given interest rates are expected to remain low while the Ministry of Finance has allowed repatriated funds to be invested in real assets (such as property and gold).


- Looking ahead, earnings upgrades need to pick up momentum for the rally to have more legs - Earnings wise, the recent 2Q results season was mixed with single digit corporate top line growth from a year ago. Concerns on banks remain dragged by asset quality issues while commodity related earnings have been moderate. Following the latest 2Q earnings season (where consensus earnings were trimmed -2% lower for FY16E and FY17E), FY16E and FY17E earnings are now forecast to grow +7% and +14% respectively (higher than Asia ex Japan equities’ 2.2% FY16E and 11% for FY17E respectively) which we believe is priced in current valuations.

Time to lock in some profits – Switch out of names which have rallied and offer no upside to target prices
- Sectors we are cautious on are: Commodity related plays which have rallied and priced in recovery expectations (coal – Bukit Asam, ITMG, palm oil – Astra Agro, London Sumatra), Banks (loans growth will be moderate while we expect asset quality concerns to remain a near term overhang) and Utilities (in particular, Perusahaan Gas – where we think profitability will remain pressured by regulatory efforts to lower gas prices).

Preferred Picks/Switch Ideas

- Preferred Sectors we would accumulate new positions are: Property (Bumi Serpong – Western Jakarta play, large landbank catering to middle income buyers), Telecommunications (Telekomunikasi Indonesia – improving smartphone penetration and data usage supported by a young population), Consumer (Indofood and Media Nusantara, which benefit from an improving domestic economy in 2H16) and Infrastructure (Jasa Marga – No. 1 toll road operator, long term beneficiary of infrastructure development in Indonesia).


- Risks to the current rally include weaker than expected global economy, faster than expected Federal Reserve interest rate hikes which may result in global liquidity volatility and disappointments in the domestic recovery and infrastructure spending pace (continues to be a focus in the 2017 budget, with 9% yoy expected growth).


$PTBA $KKGI $HRUM $ITMG $AALI $LSIP $SGRO $SMAR $PGAS $BBCA $BBRI $BMRI $BBNI $BSDE $ASRI $LPCK $LPKR $CTRA $TLKM $INDF $ICBP $AISA $MNCN $JSMR

Bull
P H
Jul 27,2016 08:50:23
EARNINGS CALENDAR (Half Year 2016 - Estimated)

JULY 2016

Jul 25, 2016 :
$BBTN (Bank Tabungan Negara (Persero) Tbk PT)

Jul 26, 2016
$BDMN (Bank Danamon Indonesia Tbk PT)
$BMRI (Persero) Tbk PT Earnings Release - 4:00PM GMT+7

Jul 27, 2016
$AALI (Astra Agro Lestari Tbk PT)
$HMSP (Hanjaya Mandala Sampoerna Tbk PT)
$LPPF (Matahari Department Store Tbk PT)
$MPPA (Matahari Putra Prima Tbk PT)
$PTBA (Bukit Asam (Persero) Tbk PT)

Jul 28, 2016
$ASII (Astra International Tbk PT)
$BEST (Bekasi Fajar Industrial Estate Tbk PT)
$BJBR (PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk)
$DOID (Bloomberg)
$NCO (Vale Indonesia Tbk PT)
$JPFA (Bloomberg)
$PSAB (Bloomberg)
$SSMS (Bloomberg)
$SMGR (Semen Indonesia (Persero) Tbk PT)
$UNTR (United Tractors Tbk PT)
$UNVR (Unilever Indonesia Tbk PT)

Jul 29, 2016
$ASRI (Alam Sutera Realty Tbk PT)
$ADHI (Bloomberg)
$BSDE (Bumi Serpong Damai Tbk PT)
$BNGA (Bloomberg)
$BNLI (Bloomberg)
$BNII (Bloomberg)
$BKSL (Bloomberg)
$BHIT (Bloomberg)
$BISI (Bloomberg)
$CPIN (Bloomberg)
$CTRA (Ciputra Development Tbk PT)
$CTRP (Bloomberg)
$ELSA (Bloomberg)
$GIAA (Bloomberg)
$GJTL (Bloomberg)
$GGRM (Gudang Garam Tbk PT)
$NKP (Bloomberg)
$INTP (Indocement Tunggal Prakarsa Tbk PT)
$INDF (Indofood Sukses Makmur Tbk PT)
$ICBP (Indofood CBP Sukses Makmur Tbk PT)
$INDY (Bloomberg)
$KARW (Bloomberg)
$KAEF (Bloomberg)
$KIJA (Bloomberg)
$KLBF (Kalbe Farma Tbk PT)
$KRAS (Bloomberg)
$LPKR (Lippo Karawaci Tbk PT)
$LSIP (Perusahaan Perkebunan London Sumatra Indonesia Tbk PT)
$MAPI (Bloomberg)
$PWON (Bloomberg)
$PNBN, $PNLF, $PNIN (Bloomberg)
$PTPP (Bloomberg)
$RALS (Bloomberg)
$SMRA (Bloomberg)
$TBLA (Bloomberg)
$TLKM (Telekomunikasi Indonesia (Persero) Tbk PT)
$TOTL (Bloomberg)
$WSKT (Bloomberg)

AUGUST 2016
Aug 1, 2016
$HRUM (Harum Energy Tbk PT)
$SSIA (Surya Semesta Internusa Tbk PT)

Aug 10, 2016
$ITMG (Indo Tambangraya Megah Tbk PT)

Aug 12, 2016
$EXCL (XL Axiata Tbk PT)

Aug 29, 2016
$ADRO (Adaro Energy Tbk PT)
$ANTM (Aneka Tambang (Persero) Tbk PT)
$BBRI (Bank Rakyat Indonesia (Persero) Tbk PT)
$ISAT (Indosat Tbk PT)
$PGAS (Perusahaan Gas Negara (Persero) Tbk PT)

SEPTEMBER

Sep 13, 2016
$SMCB (Holcim Indonesia)

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P H
Jul 25,2016 09:09:52
$BSDE : PT Bumi Serpong Damai Tbk mencetak pra penjualan Rp 2,5 triliun atau 37 % dari target tahun ini yakni Rp 6,86 triliun. Perolehan tersebut turun 26,7% dari periode paruh pertama tahun lalu yang tercatat sebesar Rp 3,45 triliun. (KONTAN)

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P H
Jun 15,2016 10:18:17
Oil at US$50/bbl – Sweet Spot for Indonesia; Tax Amnesty – On Schedule for June 2016 Implementation

- Higher oil price will reduce fiscal deficit — The Indonesian government now expects incremental revenue from the recent bounce in oil price to ~US$50/bbl. Despite Indonesia is a net importer of oil & gas, fiscal deficit could decline by Rp0.1- 0.9trn based on government’s calculation for every US$1/bbl of oil price increase. The government is currently using an oil price of US$35/bbl in their 2016 proposed budget and thus with higher oil prices, they should receive additional revenue from the oil & gas sector.

- Gasoline being sold at c.US$50/bbl equivalent after taking into account the distribution margins of Pertamina — The current price of gasoline at Rp6,550/litre translates to c.US$48-50/bbl of oil prices. Thus the government is already at a comfortable level in terms of the selling prices of gasoline, and should see no pressure to increase the prices unless the oil prices were to increase to a higher level, say US$55-60/bbl. At Rp6,550/litre, Pertamina is making a distribution margin of Rp1,010/litre, as per government calculations (see Fig 1 for government’s detailed calculation of fuel prices).

- Non-subsidized fuel (RON97) in Malaysia is cheaper vs that in Indonesia — RON95 gasoline price in Indonesia (Rp8,250/litre) is +22% higher than RON97 price in Malaysia (Rp6,715/litre). The RON97 in Malaysia is a non-subsidize fuel while the RON95 is still being subsidized and sold at Rp5,575/litre.

- Tax amnesty is still on schedule to be passed in June 2016 — We see such an outcome as not being priced in by the market (see our recent Indonesian strategy note - Still Positive: Spotlight on Five Key Issues for Market). The parliament head of commission XI, Ahmadi Noor Supi, mentioned that tax amnesty bill will not get delayed since it is a critical part of the government’s 2016 budget revision. As per the government, they have included proceeds amounting to ~Rp103trn (US$7-8bn) from the tax amnesty bill in the 2016 revised budget.

- Maintain our positive view on the market — At a 1-year forward PER of 15.1x, the JCI is not cheap but nor does it look overly expensive, and we maintain our 5,700 target (+16%) set last October. Sector-wise, we continue to like property, construction and infra. $ASII rejoins our top picks and we see more value in banks as gainers from the expected passage of a tax amnesty bill. Top picks: $BBNI, $BBTN, $LPPF, $TLKM, $ASII, $MIKA, $PTPP, $ADHI, $BSDE, $CTRA, $PWON and $JSMR.

- Key market catalysts and risks — 1) Tax amnesty; 2) Lower personal income tax which would lift purchasing power. Risks: 1) Fed rate hikes; 2) Delay in passage of tax amnesty; 3) Heavy-handed policy intervention

 
Bull
P H
Jun 03,2016 11:28:09
BSDE : Perusahaan properti dengan kapitalisasi pasar terbesar di Indonesia, PT Bumi Serpong Damai Tbk. (kode saham: $BSDE) menjadi salah satu pilihan teratas di kalangan investor untuk kategori saham properti di sektornya. Menurut sejumlah laporan riset dari perusahaan sekuritas, saham BSDE mendapat rekomendasi BUY (BELI) dengan rata-rata target harga di atas Rp2.000 per saham. Hal ini terutama didukung oleh fundamental BSDE yang sangat kuat, serta proyeksi profitabilitas yang cemerlang ke depannya.
Nomura, salah satu perusahaan jasa investasi ternama asal Jepang, dalam laporannya yang diterbitkan pada 26 April 2016 merekomendasikan BUY untuk saham BSDE dengan target harga Rp2.400 per saham. Menurut Nomura, BSDE memiliki semua kriteria yang diperlukan untuk menjadikannya sebagai TOP PICK di industri properti Indonesia. Sejumlah kriteria itu antara lain arus kas BSDE yang masih sangat kuat, sejumlah pipeline proyek unggulan, tingkat profitabilitas yang tinggi, serta kekuatan BSDE di segmen pasar menengah dan sejarah membuktikan BSDE mampu melewati naik-turun siklus properti dengan baik. Dari sisi fundamental, BSDE semakin memperkokoh fundamental Perusahaan dengan melakukan penambahan aset senilai Rp672 miliar sepanjang 3 bulan pertama tahun ini. Total Aset BSDE naik Rp672 miliar menjadi Rp36,7 triliun dibandingkan dengan posisi pada akhir 2015 sebesar Rp36,02 triliun. Kenaikan ini dipicu lonjakan permintaan akan proyek Perusahaan yang terbukti memiliki kualitas unggul. Seiring investasi di sejumlah proyek, kas BSDE hingga kuartal pertama tahun ini terkoreksi menjadi Rp5,65 triliun dari Rp6,11 triliun per 31 Desember 2015. Pada triwulan pertama tahun ini, BSDE telah meluncurkan 3 klaster residensial di BSD City yaitu Sevilla Park, Vanya Park “Anartha House” dan The Mozia “Amarine”. Selain itu, di pipeline proyek BSDE, Perusahaan melalui Entitas Anak, PT Duta Pertiwi Tbk. (DUTI) akan memulai pembangunan tahap pertama kawasan mixed-use di Jakarta Selatan dan apartemen Aerium di Jakarta Barat pada kuartal IV tahun ini. Selain itu, BSDE tengah dalam tahap akhir pembentukan perusahaan patungan (joint venture) dengan anak usaha PT Astra International Tbk., yakni PT Astratel Nusantara, dan PT Transindo Karya untuk mengejar target konstruksi tol Serpong-Balaraja tahun ini.
BSDE berpotensi mendapat tambahan pendapatan dari penjualan lahan miliknya kepada konsorsium. Lahan tersebut akan digunakan untuk pembangunan tahap pertama dari ruas tol sepanjang 30 km tersebut. BSDE juga berencana melakukan akuisisi lahan pada tahun ini di beberapa lokasi yang sudah memiliki izin lokasi dan yang sudah dikembangkan, antara lain di Serpong, Bekasi dan Cibubur. Ekspansi lahan merupakan langkah strategis untuk menopang pengembangan proyek BSDE secara berkesinambungan. Hingga 31 Maret 2016, luas tanah yang belum dikembangkan milik BSDE mencapai 3.954,88 hektare dengan cadangan lahan paling luas berada di proyek BSD City, yaitu mencapai 2.307 hektare, yang tersebar di Tangerang, Bogor, dan Surabaya. Sementara itu, sisanya tersebar di Jakarta, Palembang, Cibubur, Bekasi, Samarinda dan Balikpapan.
Dengan sejumlah proyek dan rencana ekspansi tersebut, Nomura menilai BSDE memiliki profitabilitas tinggi, yaitu mencapai 7% atau di atas rata-rata industri properti yang sebesar 6%. (IDX)
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P H
May 20,2016 10:56:22
Bumi Serpong Damai bagikan dividen tunai Rp96,23 miliar

Perusahaan pengembang PT Bumi Serpong Damai Tbk (BSDE) membagikan dividen tunai kepada para pemegang saham sebanyak Rp96,23 miliar atau Rp5 per saham. Sepanjang 2015, Bumi Serpong Damai meraup laba bersih Rp2,13 triliun dan dividen yang dibagikan adalah 4,51 persen dari laba bersih.
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P H
May 17,2016 13:17:33
Bumi Serpong Damai

·         acquires 800ha of land – Bumi Serpong Damai (BSDE) targeting to acquire 800ha of land this year, which will be funded by 2016 stage II bond issuance of IDR3t. BSDE’s director stated that the company will accumulate land in several developed areas, such as Serpong, Bekasi, and Cibubur. (Bisnis)

 
·         to issue IDR1.5t bonds with 9-9.25% interest rate – Bumi Serpong Damai (BSDE) will issue bonds of IDR1.5t. This is part of its plan to issue total bonds of IDR3t. BSDE’s director stated that the IDR1.5t bond will be divided into 2 series. Series Awill be offered with 5 year tenor with a coupon of 9%. Series B will have 7 yrs tenor and 9.25% coupon.

$BSDE

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P H
May 02,2016 17:21:11
Property Development - Weak 1Q16 results

- SMRA, CTRA and BSDE 1Q16 dropped 60-89% yoy and missed our estimates.

- Only PWON results were in line with our and consensus estimates.

- The profit misses were generally attributed to slower revenue recognition as marketing sales slowed down since late 2013 alongside stretched payment terms.

- We believe this will pose earnings risk to all developers under our coverage, although tax amnesty may provide support to share prices in the near term.

$SMRA $CTRA $BSDE $PWON
Bear
P H
Apr 29,2016 09:54:56
Bumi Serpong Damai ($BSDE)- It is just a matter of accounting booking

¨ Bumi Serpong Damai (BSD) recorded 1Q16 net profit of IDR259bn, dropped 67.5% YoY or 36.9% QoQ, below ours and consensus’ estimates.

¨ This is mainly due to decline in the sales of land and building by 42% QoQ or 50% YoY to IDR687bn, resulting contribution from development properties dropped to 72.4% of total revenue (4Q15: 79.4%)

¨ The reasons of the decline is mainly due to accounting treatment. Delay in revenue recognition of company’s previous pre-sales resulting 1Q16 revenue only booked IDR1.1trn (-32% YoY) or only 15% of market estimates.

¨ Note that revenue booked in 2016 is expected to come from the recognition of FY14 to 1H15 pre-sales and we believe accounting revenue from those pre-sales should be significantly recognized in 3Q16. This is due to FY14 and FY15’s pre-sales are mostly utilizing the in-house installment (please refer to figure 2). According to management, most buyers choose 2 years installment in FY14 and 3 years installment in FY15.

¨ Changing in cash collection pattern also resulting net cash from operating activities dropped to IDR5.1trn (-99% YoY). (please refer to figure 3).

¨ Nonetheless, we kept our earnings forecast unchaged with management advised that there are about IDR10trn sales backlog (potentially booked as revenue).

¨ Balance sheet remain healthy amid net additional short-term bank loan of IDR150bn, where net gearing stands at 9.3% as of 1Q16.

¨ Maintain BUY, at IDR2,540 TP, with the counter currently trade at 60% discount to our estimated NAV/share of IDR4,830/share, implying P/E of 15.2-13.4x for FY16-17F.
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P H
Apr 29,2016 09:42:41
Indonesia: 12th stimulus policy – Further Streamlining in Various Permits
 
The government released the details of its 12th stimulus policy, which mostly aim to further simplify various permits in doing business. While the latest policy appears to be an accentuation of previous stimulus to streamlines business process, in our view the government continues to show its focus to attract more investment into domestic economy, especially given sizeable contribution from Gross Fixed Capital Formation (GFCF) to overall Indonesia’s economy.
 
Efforts to lure more investment
President Joko Widodo through several cabinet meetings has emphasized his means to increase the rating of the country’s Ease of Doing Business (EODB) to the 40th rank. The World Bank surveyed that Indonesia stood at rank 109th from a total of 189 surveyed countries. Other ASEAN countries such as Singapore and Malaysia stand at the 1st and 18th rank of the list. Currently, there are 10 indicators that measure the EODB rank for a country. The indicators are business starting process, construction permit dealing process, tax payment, credit accessibility, contract enforcement, electricity supply, across border trading, insolvency settlement, and minority investors protection. To comply with the indicators, the Indonesian Economic Ministry along with the Investment Coordinating Board formed deregulations through the 12th Economic Stimulus.
 
Key points of the 12th stimulus policy
The 12th stimulus introduced a new deregulation scheme that will cut 94 procedures into only 49 procedures and 9 permits to only 6 permits. Furthermore, the stimulus package is followed by the release of 16 new regulations.
¨ For the business starting process, the initial regulation requires investors to go through 13 procedures that will take 47 days and IDR6.8m-7.8m to obtain Business Permit (SIUP), Company Registration (TDP), Deed of Establishment, location permit, and nuisance permit. With the deregulation, investors will only need 7-10 days procedure with IDR2.7m fee. Moreover, the government will only require 3 permits for micro, small and medium enterprises (MSME), which are SIUP, TDP, and deed of establishment.
¨ The government also released a new regulation through regulation no 7/2016 on changes in authorised capital for limited company. With the new regulation, MSME’s authorised capital will be determined by mutual agreement of the founders as outlined in the deed of establishment. However, the regulation will keep enacting the minimum requirement of IDR50m for limited company.
¨ As for building construction permit, the government will cut the process into 14 procedures within 52 days from initial of 17 procedures and 210 days of processing time. Moreover, the building construction permit fee will be reduced to IDR70m from the initial fee of IDR86m.
¨ Tax payment process will be cut into 10x payments with online system from an initial of 54x payments. While property registration will be cut into 3 procedures in 7 days with a fee of 8.3% from the value of property. The government previously imposed 5 procedures with 25 processing days and 10.8% fee for the property registration.
¨ The government also decreases the simple lawsuit settlement process to only 8 procedures in 28 days. Any disagreement on the verdict will be able to appeal with additional 3 procedures and maximum of 10 days of settlement.
 
Follow-up measure to reduce overall execution risk

Before the release of the 12th stimulus package, the government has released a total of 195 regulations from September 2015- April 2016. The government stated that as of 18 April, it has successfully completed 169 regulations or 87% from the total regulation released. There are 16 (8%) regulations that are still in the discussion process, while the remaining 10 regulations that will be taken out from the Economic Stimulus Package. The government stated that each packages received positive responses from investors and citizens. However, the government will increase its socialisation and evaluate the implementation through dissemination and business clinics. The business clinics aimed to further discuss the stimulus packages with stakeholders to ensure the on the ground efficiency of the packages. Moreover, the business clinic will also serve as the communication facility between investors and government to resolve any problems, including the export increment issues. The clinics and dissemination will be implemented in 3 regions, such as Palembang, Balikpapan, and Lombok.
 
The near term catalyst is the tax amnesty approval
We continue to believe that tax amnesty approval could serve as one of major catalyst in the near term. Post the Parliament’s recess session, the long-awaited tax amnesty bill is finally being discussed under the Commission XI, which has been holding hearing sessions with experts, business leaders and other stakeholders. Given its importance on the overall budget and the progress of infrastructure development, the Government is mulling over the fact that the bill could take effect in June. We believe the initial approval of the tax amnesty could be an important catalyst for the near term, as well as a major step taken in the right direction to finally foster the compliance of taxpayers – which could help solidify the Government’s overall budget composition going forward. As such, we expect further foreign fund inflows to support the market post the approval of the tax amnesty although we acknowledge that execution risks still remain at this juncture. Our top pick in the market are $BBCA, $BBTN, $ICBP, $INDF, $ADHI, $LPPF, $MIKA, $TLKM, $BSDE and $LSIP.


Bull
P H
Apr 26,2016 13:56:11
Bumi Serpong Damai: Solid marketing sales achievement in 1Q16 (BSDE; Rp1,845; Buy; TP:Rp2,200)

- Solid marketing sales achievement. BSDE achieved 18% of its marketing sales target of Rp6.9tn, at Rp1.2tn. Compared to last year, the marketing sales was down 46% YoY, as last year’s launches was more aggressive in 1Q. The company’s biggest contributor still comes from BSD City, which is 74% of its total marketing sales. In 1Q16, the company has plenty of project launches in BSD City, which consists of Sevilla Park, Vanya Park and Mozia.

- New project launches in upcoming quarters. We think that the company is growing more confident on its new project launches, as the company would launch its Jagir, Surabaya project in May. BSDE plans to launch the first tower of Klaska residence, the Azure, in Jagir, Surabaya on May. Apt unit size ranges from 25.67sqm to 52sqm with ASP starts from Rp400mn, implying starting ASP/sqm to stand at Rp16mn/sqm. The installment methods is 36x, or 30% down payments for 36x installments followed by mortgage. Marketing sales from this project is estimated to be around Rp300bn. The company also plans to launch Permata Buana and Tanjung Barat projects in 2Q16 or 2H16. Permata Buana ASP would start at around Rp22mn per sqm.

- Maintain Buy. We maintain our Buy rating for BSDE with PT of Rp2,200. The stock is currently trading at 59% discount to NAV and FY16F P/E of 12.3

$BSDE

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P H
Apr 20,2016 08:50:54
Akhirnya, Pemerintah Terbitkan Aturan Kepemilikan Hunian untuk Orang Asing http://kom.ps/AFuuNb

Berikut daftar harga minimal pembelian rumah tinggal oleh orang asing:

DKI Jakarta Rp 10 miliar
Banten Rp 5 miliar
Jawa Barat Rp 5 miliar
Jawa Tengah Rp 3 miliar
Yogyakarta Rp 3 miliar
Jawa Timur Rp 5 miliar
Bali Rp 3 miliar
Nusa Tenggara Barat Rp 2 miliar
Sumatera Utara Rp 2 miliar
Kalimantan Timur Rp 2 miliar
Sulawesi Selatan Rp 2 miliar
Daerah lainnya Rp 1 miliar

Berikut daftar harga minimal pembelian satuan rumah susun (apartemen) oleh orang asing:

DKI Jakarta Rp 5 miliar
Banten Rp 1 miliar
Jawa Barat Rp 1 miliar
Jawa Tengah
Yogyakarta Rp 1 miliar
Jawa Timur Rp 1,5 miliar
Bali Rp 2 miliar
Nusa Tenggara Barat Rp 1 miliar
Sumatera Utara Rp 1 miliar
Kalimantan Timur Rp 1 miliar
Sulawesi Selatan Rp 1 miliar
Daerah lain Rp 750 juta

Akhirnya, Pemerintah Terbitkan Aturan Kepemilikan Hunian untuk Orang Asing

Kementerian Agraria dan Tata Ruang/Badan Pertanahan Nasional (ATR/BPN) akhirnya mengeluarkan aturan kepemilikan hunian bagi orang asing.

Aturan tersebut tertuang dalam Peraturan Menteri ATR/Kepala BPN Nomor 13 Tahun 2016 tentang tata cara pemberian, pelepasan, atau pengalihan hak atas pemilikan rumah tempat tinggal atau hunian oleh orang asing yang berkedudukan di Indonesia.

"Sudah saya tanda tangani dan ini menjadi tindak lanjut dari Peraturan Pemerintah Nomor 103 Tahun 2015," ujar Menteri ATR/BPN Ferry Mursyidan Baldan di Batam, Kamis (14/4/2016).

Aturan kepemilikan hunian bagi orang asing dikeluarkan untuk mendorong iklim investasi di Indonesia. Menurut Ferry, selama ini investor asing membutuhkan fasilitas perumahan untuk mendukung bisnis mereka di Indonesia.

"Ini bagian kemudahan perizinan. Kita berikan percepatan, ketepatan, dan kepastian bagi investor," katanya.

Kepemilikan dapat berupa rumah tunggal ataupun rumah susun dan hanya diberikan kepada orang asing yang memiliki izin tinggal di Indonesia.

Selain itu, pembelian hanya berlaku untuk pembelian baru langsung dari pengembang atau pemilik.

$BSDE $ASRI $CTRP $CTRA $CTRS $PWON $APLN $LPCK $LPKR
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P H
Apr 11,2016 09:44:59
Infrastructure is a hot commodity in ASEAN. With global economy remains uncertain, the focus has shifted to domestic sectors such as infrastructure. Today we published a 130-page report on ASEAN infrastructure where we look at, among other things, opportunities, funding requirements and challenges across countries in ASEAN. In Indonesia, we continue to be positive on infrastructure sector, and believe the country has reached a point where it is in a desperate need for infrastructure. You can see from various publications and statistics that Indonesia needs infrastructure in almost all sectors, such as power, roads, airports, seaports, etc. So, it is the right strategy by the government not to prioritize one sector over another. In terms of sector attractiveness, we think power sector is on top of our list due to, among other things, less risk in currency mismatch and abundant sources of energy. The next attractive one is road sector. That is our first takeaway.
 
Our second takeaway is that government has strong support for infrastructure as shown by big allocation for infrastructure in the state budget (over 2% of GDP which is the highest ever). However, state budget is not the only funding source because funding from SOE and private sectors accounts for more than 50% of total funding needs, suggesting diversified funding. Despite high reliance on SOE and private sectors, the government does not provide any guarantee for projects, suggesting fiscal prudent policy. The government will continue providing their supports through, for instance, accelerations of permit issuances.
 
In conclusion, we reiterate our positive view on the sector. Construction, toll road and property companies will be the main beneficiaries. We have chosen three stocks as top picks in Indonesia: $PTPP, $WSKT and $BSDE.
 
In terms of risk factor, implementation especially in land acquisition is the biggest one.
Bull
P H
Apr 08,2016 09:09:22
Property: Demand is still there based on rumah123.com survey
Rumah123.com have performed a survey to 12.000 respondents in Indonesia, Malaysia, Singapore and Hong Kong for their
appetite in Indonesia’s property market. They found that demand for property is still high, with the majority of respondents
thinking that now is the right time to buy. According to the survey, landed house is the most popular type of property, while
land follows it in second place. The most favorite pricing range is Rp300mn to Rp1bn; with terms of payment still focus on
KPR. Rumah123.com predicts that property sales will increase by 5%-10% in FY16.

$BSDE $ASRI $MDLN $BKSL $CTRA
Bull
P H
Apr 05,2016 15:34:07
Property: New in the Hood

- We forecast a slow 1Q16 marketing sales, with most property companies only meeting 5-15% of their FY16F. Most property companies are still waiting for tax amnesty before launching a brand new project.

- Another strong launch from BSDE. BSDE has just introduced a new complex called The Mozia within the BSD area. They have launched a cluster called “Amarine” in the 27th of March, 2016. The Amarine cluster has a total of 207 units (37 land plots and 170 houses). Take up rate has been pretty good at 87%. Houses’ land size ranges 60sqm – 96sqm; while land plot size ranges 98sqm – 154sqm. The house pricing is Rp2-2.5bn. The land ASP is around Rp14.7mn/sqm; implying around Rp280bn of marketing sales.

- Weak take-up rate from JRPT. JRPT introduced a new Japanese smart living concept through its newly launched product called “Piazza”. The housing complex is designed by Osamu Nishida, a Japanese winning architect. Land size in “Piazza” is ranging from 60sqm to 97sqm, while selling price starts from Rp1.8bn to Rp2.7bn, with average land ASP at Rp22.5mn/sqm. Based on our channel check, only 15 units were sold during the launch (20% take up rate), with estimated marketing sales of around Rp30-40bn. We think take up rates are weak as the design does not suit Indonesian taste.

- Citra Raya Tangerang is aiming at the sweet spot. In the beginning, the company launched the Cluster Vernazza, however due to strong take up rates (3x oversubscribed), the company has launched the second cluster. Prices range is Rp450-600mn per unit. CTRA has earned more than Rp160 billion of sales from the launch of Vernazza and Bolzano in Citra Raya Tangerang.

- APLN is on-track, others are trying to catch-up. We forecast APLN to be on-track due to its Podomoro Golf View project. Most of the property companies are starting their first launch in April. MDLN will launch a low rise in JGC and SMRA also will launch another cluster in Bandung.

$BSDE $JRPT $CTRA $APLN
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P H
Apr 05,2016 14:55:46
South East Asia (SEA) – Growth Reset Underway

SEA equity markets added on to gains in March with improving foreign inflows, as risk appetite improved following some stabilization in China and a weaker USD from delayed Fed hike rate expectations. With a dovish Fed and likely tightening only in June, investor concerns on the global economic recovery are expected to ease further near term, which will be supportive of risk assets.

Within the region, we view Indonesia and Philippines as offering relatively stronger structural growth stories. Apart from infrastructure plays such as Jasa Marga ($JSMR), sectors we favour in Indonesia include the property sector where we see potential catalysts from improving presales helped by a lower interest rates environment and progress in the government’s tax amnesty programme. We highlight Bumi Serpong ($BSDE), which is well positioned to benefit from a recovery in property demand while valuations remain undemanding. We also favour market leader Telekomunikasi Indonesia ($TLKM) following more rational competition in the telecommunications sector. With a stable earnings outlook driven by continued growth in voice and data revenues, we view TLKM as a core holding within the SEA telecommunications sector.

Incoming data releases from the Philippines indicate that domestic demand trends remain on a positive track in 1Q16. January’s remittances growth was also broadly in line with trend, growing 3.4% yoy (vs 2015’s 4.1% growth). The next key event domestically is the upcoming elections in May where we expect election rhetoric to cast some uncertainties in the equity market. Post elections, we expect the gradual reform pace to be maintained and highlight Ayala Corp  as one of our preferred large cap picks to accumulate on weakness, which offers a portfolio of stable and growth companies leading in their respective sectors and well positioned to benefit from the country’s economic growth
Bull
P H
Mar 07,2016 09:17:16
Indonesia Property Sector: Modest Improvement in Outlook

Stay Selective – Focus on Quality Property Names In this paper, we provide an update on the Indonesia property sector and highlight the top recommendations in our coverage. Conditions have improved since our sector update in October 2015 – the rupiah has stabilised, consumer confidence has recovered from a 3Q15 trough, and mortgage rates are declining. Developers are guiding cautiously for 2016 presales (+9% YoY) and physical property price gains remain subdued but we expect further gradual improvement in the outlook for the sector over the coming months. We recommend accumulating selected property names in stages with a 12-month view, staying focused on quality developers with long operating histories, strong balance sheets and solid execution records.

We remain positive on developers with large exposure and landbanks in Greater Jakarta, despite a temporary softening in property prices there, as we expect it to remain Indonesia’s main economic hub for the foreseeable future. We believe that rising incomes, ongoing urbanisation and further improvements in infrastructure such as the high-speed rail, MRT and LRT projects will continue to drive long term demand for quality residential and commercial property in the area. Potential short term catalysts for the developers under our coverage are better than expected presales in 1H16, stronger economic growth, and further regulatory changes that are supportive of the property sector, such as allowing mortgage financing for second homes that are still under construction.

Our top pick is Bumi Serpong Damai ($BSDE), Indonesia’s biggest property developer by market cap and landbank. BSDE has the strongest balance sheet among the developers in our coverage, with net gearing of just 6% at end-3Q15. Current valuations are attractive at more than one standard deviation below its 5-year average PB and PE, given its vast, low cost landbank centred on BSD City in Greater Jakarta, and wide product range, which gives it flexibility to vary its product mix in response to changes in demand or regulations affecting a particular segment. We think the company is in an excellent position to ride a recovery in property demand as buyer sentiment improves and the macro environment turns more supportive.

We also like Lippo Karawaci ($LPKR) for its diversified property portfolio within Greater Jakarta and new projects in Makassar, as well as its market-leading Siloam private hospital business. Its shares sold off in early December following a weak 3Q15 earnings report and a cut in its FY15 presales guidance but we think the correction is overdone and we believe the longer term outlook for LPKR remains positive, given its large Greater Jakarta footprint and exposure to healthcare.

We also continue to favour Pakuwon Jati ($PWON) for its large recurring revenue contribution from a high-quality mall portfolio in Jakarta and Surabaya; we expect revenue support from rental increases this year as 21% of its mall leases are up for renewal.

Bear
P H
Feb 15,2016 09:03:46
Visit to property expo

First property expo in 2016 was encouraging
Over the weekend, we visited a property expo in Jakarta, organized by
Bank Tabungan Negara (BBTN IJ). During the event, BTN offered a
promotional mortgage rate of 6.6% fixed for one year. We found that a
large number of visitors to the expo showed enthusiasm regarding the
event. Besides BTN, we note that other big banks are also starting to
lower their rates to single digits. We see this trend as positive for
property sector especially for BSDE and CTRA.

Interesting mortgage rate promotion by BTN
As the organizer of the expo, Bank Tabungan Negara ($BBTN) specializes
in the mortgage segment and is the anchor bank for the Government
subsidized mortgage program. As of FY15, BTN had a market share of
~30% in mortgage lending. To boost its mortgage portfolio by ~20% in
FY16, during the expo, BTN offered a promotional non-subsidized
mortgage rate of 6.6% fixed for one year. For subsidized mortgages, BTN
offered a flat 5.0% for 20 years and LTV of 99%.

Targeting the low-middle segment
There were 209 developers participating in the event offering about 660
projects mainly in the Greater Jakarta area and several other cities in
Indonesia. Listed developers that participated in the expo were $CTRA,
$ASRI, $PPRO and $MTLA. Based on our visit to most of the exhibition
booths, we note that most of the properties offered were mainly
targeting the low-middle market segment with price tags starting from
IDR100m/unit (USD7,500). Further, many private developers offered low
cost housing that can be eligible to be financed by subsidized mortgage.

Other banks also starting to offer lower rates
Besides BTN, we also note that other big banks, such as BCA, Bank
Mandiri, BNI, BRI and CIMB Niaga offered promotional mortgage rates
below 10% starting in Feb’15. We view this positively for the property
sector, especially for $BSDE and $CTRA as most of their buyers use
mortgages for their purchases.

Bull
P H
Feb 05,2016 08:59:29
BSDE mentargetkan marketing sales tahun 2016 untuk tumbuh flat sebesar 2% menjadi Rp6,85 triliun di tahun 2016. Dari target tersebut 56% akan berasal dari penjualan produk – produk residensial dan 44% akan berasal dari produk komersial. Meskipun memiliki target yang konservatif, manajemen BSDE melihat adanya kemungkinan untuk merevisi target marketing sales keatas apabila kondisi ekonomi membaik di semester II 2016.

$BSDE
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P H
May 11,2015 12:57:19
Indeks Harga Saham Gabungan (IHSG) menguat +0,1% (+3 poin) di level 5184,45 poin pada penutupan perdagangan sesi 1, Senin (11/5). Indeks LQ45 naik +0,15% ke posisi 900. Jakarta Islamic Index (JII) naik +0,27% ke posisi 699 poin. Indeks Kompas 100 naik +0,19% ke level 1.134 poin. IDX30 naik +0,15% ke level 466 poin. Pemodal asing membukukan transaksi net sell (jual bersih) -Rp37 miliar. Transaksi yang tercapai Rp2,136 triliun dengan volume trading sebanyak 5,755 miliar saham. Sektor: Agri +2,07% Mining +1,70% Properti -0,69% Infrastruktur +0,16% Finance +0,04% Trade -0,14% Manufaktur -0,17% Consumer -1,17% Basic ind -0,07% Misc-ind -0,25% Kini sektor agro dan mining menjadi penopang utama laju IHSG pada perdagangan sesi siang awal pekan ini. Saham agri ditunjang oleh naiknya AALI +3,07%. BWPT ++3,75%. DSNG +1,41%. GZCO +1,12%. SIMP +2,34%. SSMS +1,01%. Adapun saham-saham mining yang bergerak naik antara lain: ADRO +5,23%. ANTM +0,63%. ARTI +4,44%. HRUM +2,97%. INCO +1,24%. ITMG +5,51%. Kelompok saham properti bergerak negatif seiring terbitnya Revisi PMK No 90 /PMK.03/2015 tentang pengenaan pajak barang super mewah (PPh 22) untuk properti. Saham-saham properti yang melorot adalah: APLN -1,73%. BSDE -0,28%. CTRA -2,92%. JRPT -7,34%. LPCK -0,90% . LPKR -1,19%. Adapun sektor yang turun paling dalam adalah consumer -1,17%. Koreksi consumer dimotori saham: DVLA -1,11%. KAEF -0,84%. GGRM -0,16%. TSPC -1,67%. ULTJ -2,35%. UNVR -0,06%. Bursa Asia Sentimen kebijan Tiongkok yang memangkas suku bunga menjadi sentimen utama bagi market regional. Bank Sentral Tiongkok (People`s Bank of China (PBOC) menurunkan suku bunga kredit dan deposito bertenor 1 tahun sebesar 25 bps. Indeks Nikkei naik +1,27% (+245,32 poin) ke posisi 19.624,51 poin. Indeks Hang Seng naik +0,50% (+132,29 poin) ke level 27.714,63 poin Indeks Shanghai naik +1,18% (+49,62 poin) ke posisi 4.255,54 poin Indeks Straits Times +0,46% (+15,72 poin) ke level 3.467 poin (pukul 12.00 WIB).
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