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Danareksa Equity Snapshot - DMAS 13 Februari 2018
February 13, 2018 09:36

Puradelta Lestari(DMAS IJ)

Cautiously optimistic


DMAS yesterday said that it targeted marketing sales of IDR1.25tn in 2018. The marketing sales will still be mostly contributed by the industrial estates segment. In terms of area, however, DMAS only expects to record 40ha of land sales, lower than 2017’s achievement of 59.1ha. Nonetheless, we retain our industrial land sales target of 60ha as we expect the company to beat its target considering: (i) plenty of inquiries remaining (100-130ha), (ii) marketing sales in January 2018 of 14ha. Maintain BUY.

Setting a conservative marketing sales target, both in rupiah terms… DMAS announced a marketing sales target of IDR1.25tn in 2018, down by 11.2%yoy. Nonetheless, should we exclude the one-off land sales to JV Panahome Deltamas Indonesia of IDR213bn, the target implies 0.8%yoy growth. The company still expects the majority of its marketing sales to come from industrial land sales.

… and in terms of industrial estates sales area. In terms of area, the company expects to record land sales of 40ha, or lower than 2017’s land sales achievement of 59.1ha. Nonetheless, we retain our industrial land sales target at 60ha as we expect the company to beat its target considering (i) plenty of inquiries remaining (100-130ha), (ii) marketing sales in January 2018 of 14ha.

To raise prices slightly. This year, DMAS targets more sales of smaller land plots. This should help lift ASP, we believe. The company targets 5-10% higher blended ASP in 2018 from IDR1.7mn/sqm in 2017. From existing inquiries, the company claims that 30-40% of its total inquiries of 100ha are from more than 5 potential smaller-land size inquiries. In our forecast, we use a more conservative assumption of 3% higher ASP in 2018.

Minimal capex allocation in 2018. The company has earmarked IDR200-300bn on its 2018 capex, which will mainly be used to build infrastructure in existing areas. With abundant cash remaining of IDR541bn in addition to strong operational cash flow that may reach more than IDR300bn/pa, we believe DMAS can finance its planned capex from internal financing.

Maintain BUY. We reiterate our BUY call on DMAS with an unchanged target price of IDR240 (NAV based valuation with 65% target discount to NAV). DMAS currently trades at a 72.6% discount to NAV, slightly lower than the historical +1SD discount of 71.9%.

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