Tuesday, January 31, 2012

Summarecon

Some key updates from Summarecon (SMRA IJ):
 Marketing sales target is Rp3.5tn for FY12 (+16.6% YoY). Last year they did
Rp3tn (+40% YoY)

 Like other developers, price appreciation will drive the growth of sales, rather
than volume.

 Profit for FY11 will most likely hit Rp340bn (prev guidance was Rp310-320bn) with
Rp2.1-2.2tn revenue. The profit guidance is in line with our forecast but 6%
above consensus expectation. Growth is expected to be 20-25% in FY12.

 Still in progress: Land acquisition on south part of Jakarta. SMRA to buy min. 200ha. Hence, no firm plan yet on rights issue or bond issuance. They said if they want to do rights issue, most
likely it will be just a non-premptive (10%). The rationale is if they can’t buy huge chunk of land,
there really is no need to raise too much money. Rp1tn is enough for future development.
 SMRA now trades at 25% disc to our NAV assumption of Rp1,610/sh.

Project Updates:
 Serpong township:
o Last year’s ave. selling price was Rp4m psm. This year, SMRA will increase
this to Rp4.4-4.5m psm (+13%)

o Total land bank remains at ~520ha. SMRA bought 60ha raw land in Serpong for
ave. Rp530k psm.

o SMRA also plans to build a small IT related mall, (10-15k sqm) in Serpong, called
Summarecon Digital Center. This is to leverage on the UMN university; now has
4,000 students), and the Scientia Garden. SMRA also plans to build convention
hall (connected to Scientia Park).

Bekasi township:
 Last year’s price was Rp3m psm, and this year will increase to Rp3.5-4m psm
(+25-30%).

 The flyover to Bekasi township is delayed from 1Q12 to Aug/Sep 2012. Due to some
technical challenges, they said. This flyover is almost 1km (elevated 600m). First
handover of units in Bekasi have started.

 This year, SMRA will only start launching housing after Sep (when the flyover is
done). So, it will first launch shophouses first. In 2011, SMRA launched
shophouse at Rp11m psm, so will increase the price by 15-20% this year.

 They are also in the design phase for Bekasi mall, and the target is in 2Q12,
they will start marketing to tenants and tendering for contractor.

Kelapa Gading township:

 This year will launch more shophouses (remaining 50 units in Orchard square, ),
and apartment units

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