SSIA
Contact our analyst Eka
Focus on industrial estates leads to construction growth & land sales to rise, 54% upside. BUY
29th November 2017
Price Rp520
Target price Rp800
29th November 2017
Price Rp520
Target price Rp800
Focus on Subang Industrial Estate
- In Subang, SSIA has location permits for 2,000 ha of industrial estates and plans to develop 350 ha in 2018.
- The land is located near the Patimban toll road project which will start development in 2018.
- We expect the Subang Industrial Estates will earn a profit in 2019.
- Selling prices have continued to increase CAGR 2012-9M2017 of 12%.
- Along with the Patimban Port development, we expect SSIA’s ASP to increase further and, going forward, improved land sales demand.
- We estimate NRCA, SSIA’s construction subsidiary, will grow in 2018F from developing the 350 ha land bank in Subang.
- As of 9M2017, NRCA booked new contracts worth IDR 2.13 trillion or growth of 66.4%
- We expect the construction sector will be the biggest contribution to SSIA’s revenue, helping 2017F revenue to reach IDR 3.67 trillion and 2018F to rise to IDR. 4.0 trillion.
- Based on 9M2017 results, we make some adjustment to our forecast & we estimate SSIA shares will rise by 54% to IDR 800 within a year. BUY
