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Puradelta Lestari (DMAS.IJ IDR 183 BUY.TP: IDR 230)
September 23, 2022 13:34

Puradelta Lestari(DMAS IJ)

Strong presence in data center industry

We visited Deltamas industrial estate to gain insight of the current development of its property. We like the development of its industrial zone including the new data center zone, but the residential and commercial might need more time to bring more value. We maintain our BUY call on DMAS for its strong presence in data center and potential dividend yield.

A third to full occupancy. Currently DMAS has sold 12 land plots in its data center zone. These tenants consists of several top global names, Telkom, and Ministry of Communication and Information. Land plot size varies for each tenant ranging between 5-10ha and for a combined total size of c. 70-75ha in the data center zone, a third of total land in the zone. This leave c. 150ha in the data center zone for sale. If it can be sold with ASP of IDR2.7mn/sqm, it could generate marketing sales of c. IDR4tn for DMAS. PLN has 990MW electricity to support DMAS which should be enough for the next 10 years.

Strong infrastructure and facilities to support top tier data center. Supported by its premium PLN services which only three industrial estates have, dedicated fiber optic, multiple (three) Internet Service Providers, and other facilities, DMAS has proven as one of the main choices for data center players. Currently, 12 data center tenant in Deltamas are all Tier IV and have global standards. Thus it should be able to cater requirements of other data center players as well, in our view.  

More time needed for residential and commercial land. To unlock its residential and commercial value, we believe more time are needed as we have yet to see crowd in the area. We think this might be due to its strong presence of auto and data center industry, which typically has less labors. Positive short-term potential are coming from the development of high-speed train and AEON mall which is expected to finish in the next two years.

Maintain BUY with TP of IDR230. We like the stocks for its strong presence in data center sector as well as its potential dividend. We value the stock using 55% discount to NAV to arrive at TP of IDR230 and thus maintaining our BUY call with 26% upside and 10% potential dividend yield.

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