Riset Saham, Jumat, 24 Mei 2013

RISET FR CIMB 24 MEI 2013 :


1.Property Investment   | Welcome (back) to Jakarta
OVERWEIGHT - Maintained
Author(s): Lydia TOISUTA,

Jakarta office space was reported to have the highest capital value growth rate amongst global investment cities in 1Q13. Grade-A office land lords are also enjoying a rental upcycle, which should persist for another 30 months before new supply streams in. Maintain Overweight with catalysts expected from the continuous rise in capital values and rental rates. Our top picks are ASRI and CTRA.

Long on capital gains and yields
Almost all developers are now have returned to Jakarta’s primary CBD. The main reason is under-appreciating land value. In US$ terms, Jakarta CBD’s land prices had only gone up less than 1% CAGR in the past 15 years. Also, primary land is scarce, as most land plot (even those undeveloped) in Jakarta primary CBD has been occupied by business groups. What’s more, long-term bond yields are falling faster than office yields (2.5% spread in 4Q12 vs. 0.7% in 4Q10). This means that owning offices is attractive for both capital gains and yields, as long as vacancy stays below 7%.

Making the most of it
It pays to be located in Sudirman and Thamrin where new buildings (some less than nine years) yield landlords twice the rentals elsewhere in Jakarta’s primary CBD. This has been encouraging many new developers to develop Grade-A space (85% of new supply vs. 47% current space). It makes more economic sense for the developers since land costs in rupiah terms have gone up 3x since 2009. We also suspected that many older Grade-A buildings that age above 15 years to have redevelopment as it is now can only ask for half of newer building current asking rentals.

Limited risks
In our view, most developers with exposure to Jakarta’s primary CBD are taking relatively limited risks. The cost of land for half of them is low (pre-2000 owned), with most having the tendency to sell 50% or more in presales. (23 MEI 2013)

2.Adi Sarana Armada   | Building its system
ASSA IJ / ASSA.JK | OUTPERFORM - Maintained | Rp385.00 - Tgt. Rp500.00
Mkt.Cap: US$133.9m | Avg.Daily Vol: US$0.90m | Free Float: 40.00%
Transport | Author(s): Soegiarto HADI, FRM,

ASSA is increasingly using a tender system to individually sell its used cars as opposed to selling them in batches to a wholesaler. This has increased its margin per used car despite concerns about used car prices. There could be further upside as ASSA is still refining its system. We maintain our EPS forecasts, GGM-based target price (LTG: 7.5%, ROE: 19.5%) and Outperform rating. Catalysts could come from strong execution and ROE expansion.

What Happened
We attended ASSA’s internal tender (closed auction) session at its showroom in Serpong, where 30 used car dealers bid for 58 of ASSA’s old cars. Introduced in Oct-2012, the tender is held weekly at ASSA’s showrooms in Serpong and Surabaya.95% of its old fleet disposal is now achieved through the tender process, as opposed to its previous practice of selling cars in batches to wholesalers. To support the tender system, ASSA employs marketing personnel whose jobs are to look for more used car dealers to participate in the tenders. Their incentives are tied to how many dealers under their care win the tender. By moving from wholesale disposal to tenders, ASSA undercuts wholesalers and sells straight to used car dealers, capturing more value.

What We Think
So far, the tender process has been a success as it has lifted ASSA’s 1Q13 used car margin by 4% pts yoy. The average residual value for used cars sold was around 72% in 1Q13, higher than 67% in FY12. There are margins left to be captured as ASSA is still refining the process eight months after it was initiated, introducing computerisation and an online system. (23 MEI 2013)