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

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.

Land Sales To Rise.

• 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.

Strong Construction Growth

• 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.

Valuation: Reiterate BUY with 54% Upside​

• ​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
  

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