SSIA:
1000ha land swap expected by 4Q
The 1,000ha land swap
between Perum Perhutani (state-owned forestry company) and SSIA is expected
to be completed by 4Q12. Perum Perhutani recently completed due
diligence on the land and is now in the midst of writing a
recommendation letter to the forestry minister. Next, the forestry ministry
will review the recommendation. Securing this 1000ha land will boost SSIA
land bank to ~1300ha (biggest industrial landbank) and serve as strong catalyst
for the share px. Ferry has factored in the 1000ha additional land in his
number, but upside could come from his conservative $100/sqm land price
assumption vs latest transaction at $145. Other updates: SSIA plans to issue
Rp500bn worth of bonds in Oct ’12 to acquire landbank and refinance Rp300bn bank
loan; plans to sell asset Glodok Plaza for Rp300bn and use the funds to go into
budget hotels. Reiterate Buy TP Rp1,450, based on 30% discount to our NAV
Rp2000. Trades on 6.2x 2013 PE (vs sector 16.2x).
Market
News
* Financing companies
cautious over motorcycle sales. Automotive
financing companies and dealerships say they will be more cautious in motorcycle
sales targets for 2H12. Adira (ADMF), a subsidiary of Bank Danamon (BDMN) lowers
its total loan target to Rp 29.34 trn from Rp 35.86 trn. Federal International
Finance (FIF), the 2W financing unit of Astra International (ASII) has been
eyeing issuing Rp 15 trn in loan this year up by 57.9% from 2011. Like ADMF, FIF
also had a higher initial target for 2012, Rp 18 trn, and lowered it due to the
regulation.
* National insurance
business to grow higher. Despite the
uncertainty in global insurance market, Indonesia insurance business grew 15.5%
y-y in 1H12 with total premium of Rp 68.9 trn. From the total premium, life
insurance contributed the most by Rp 47.97 trn. The average insurance purchase
also reached Rp 561,130 per person compared to last year of Rp 517,830 per
person.
* ASP for Industrial
Estates Land is skyrocketing. As per Q2.2012m ASP
for Industrial Estates in Jakarta, Bogor, Bekasi, and Karawang (Jabobeka) jumped
99.6% y/y to Rp1.94m/psm. Main catalysts are the increase of NJOP (Selling Value
of Taxable Object), Improvement of infrastructure, Strong FDI (Foreign Domestic
Consumptions) along with Indonesia’s promising Economic Growth and strategic
locations that can be enjoyed by business investors. Majority of Industrial
Estate buyers came from Japan, South Korea, Malaysia, and Singapore with 64.4%
demand for warehousing and 35.6% demand for factories. (Bisnis
Indonesia)
* Blackstone, Bain
Capital, KKR & Co and Dubai’s Abraaj Capital have been shortlisted for
the second phase of an auction of Lippo Karawaci (LPKR.JK)’s healthcare
unit stake, Siloam. The deal could fetch as much as US$300mn. Lippo is
seeking valuation of more than 20 times Siloam’s forward core earnings for the
stake. Global buyout fims are keen on Indonesia’s consumer healthcare and
consumer sectors despite steep valuations, as they are betting on the country’s
fast growing economy. (Jakarta Post)
* Wijaya Karya (WIKA)
expects its 1H12 revenue to increase by 15%-20%y-y. The company has
secured contract of Rp25trn or equal to 78% from 2012 target that accounted for
Rp32.09trn. As of June 2011 financial statement, WIKA booked Rp3.31trn of
revenue, hence company is expected to have revenue of about Rp3.81trn-Rp3.97trn
in the 1H12. Company will not revise its contract target and currently preparing
for Wika Beton’s IPO. (Bisnis Indonesia)
* Bank Central Asia
(BBCA) will not acquire insurance company but instead the bank plans to
establish its own company operating under subsidiary. As planned, BCA
prepares Rp100bn for the establishment of the insurance company but such capital
will be given gradually. It will distribute Rp70bn as initial capital and the
remaining capital will be given after the insurance company begins operation.
The insurance business unit will become the subsidiary of Dinamika Usaha Jaya
Securities, which has been acquired by BCA last year. The establishment of
insurance company will be parallel with the renaming process of Dinamika Usaha
Jaya’s rebranding into PT BCA Sekuritas. The life insurance business line is
expected to finish this year or at most at the end of 2013. (Bisnis
Indonesia)
* Krakatau Steel
(KRAS) to build US$400 mn hot strip mill in 2013. Currently, the
company is conducting a feasibility study and should begin land acquisition by
the end of this year. The planned hot strip mill is expected to help the company
to upgrade its total rolling capacity to 4.25 mn tons per year. (Jakarta
Post)
* Bukit Asam (PTBA)
aims 30% stake of Bukit Asam Transpacific Railways (BATR)
project. The plan is expected
to be realized after the revision of Central Banko mining permit (IUP). Central
Banko, located in South Sumatra is part of the BATR project, where PTBA holds
10% stake of the project, and the rest holds by Rajawali Group. PTBA will use
its internal cash to increase the stake in the US$ 2 bn BATR project.
(Kontan)
* Adhi Karya (ADHI)
and Hyundai form consortium. ADHI is forming
association with Hyundai Engineering & Construction Co Ltd to bid for
engineering, procurement and construction/EPC tender projects from Pertamina in
Senggoro, Bengkalis, Riau. The tender project can amount up to US$500m. In the
consortium, ADHI will have 30% stake and the remaining 70% will be controlled by
Hyundai from South Korea. Proposal has been submitted and result is expected to
come out by 4Q2012. (Investor Daily).
