Waiting for next big bang - Maybank Kim Eng
Different focus; D/G to HOLD with TP of IDR1,600 Downgrade to HOLD from BUY in view of a lack of near-term catalysts. Asset monetisation is slower than expected as LPCK sells more selling residential properties and not industrial land. Our new TP of IDR1,600 is 76% lower due to a changing presales mix, overhang in Meikarta project as well as rights adjustments. This is still based on a 49% discount to RNAV, near -1SD of its 5-year mean. While we model double-digit presales growth for its peers, we model +8% YoY for LPCK for FY19E and +16%/+4% YoY for FY20-21E. Switch to Puradelta (DMAS IJ, IDR304, BUY, IDR360) in the sector for its stronger presales growth and higher profitability.
Positive on new mass-market project Since 2015, LPCK has been developing apartments to maximise the value of its 434ha land bank. But as the apartment market appears saturated, it will soon supply landed homes for the mass market, in 2H19. We are upbeat as demand for landed homes at IDR600m each is expected to be well absorbed by the market. We believe its presales target of IDR1,000b, down 4% YoY, for this year can be achieved on the back of its new focus.
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