Sound marketing sales this year on the back of new projects
Ciputra Develpment Tbk (CTRA)
Shinhan Sekuritas Indonesia
Helmi Therik
Back ground. CTRA is a property development company which owned 2,521ha land that scattered widespread across the country (33 cities). This would sustain the business for the next 15 years. About 29% of the revenue was derived from the recurring income while the rest was from the development revenue. This would partially protect the revenue from the property cyclicality. Several towers or high rise building that located at central district area are: Ciputra World I & II and Tokopedia Tower. The company has 566,961 (sqm) sealable area for the apartment and office-strata title and also owned 200,000 (sqm) of net leasable area (NLA) for the mall that produced a stable recurring income ahead.
Benefited from the mid to low income demand. The potential demand for the housing and apartment in the long term is believed would remain strong, especially for the mid to low income class due to housing backlog at 11mn. About 41% of the presales marketing is coming from the below IDR1bn ticket size in the 1H18. The mid to low class segment’s (
Strong revenue growth expectation on the back of the new projects. The revenue was relatively flat in the 1H at IDR2.8tn, however the company believed to book a solid revenue growth in 2nd semester that would spur the revenue by 20% yoy to IDR7.7tn on the back of the new projects. The pre marketing sales target this year is set at IDR7.7tn which would come from the several projects such as Citra Sirkuit Residence at Sentul, Citra Maja Tanggerang, etc. The pre-sales in 1H was about IDR3.3tn or representing 42% of the company’s target this year.
Valuation. We derived our TP at IDR1,350 based on the 69% discount to our RNAV calculation which implies the 2018 and 2019 PE at 20x and 22x respectively or in line with its historical average. Risk to our call: Deteriorated of the GDP, more than expected higher interest rate.
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