by Trimegah :
• SSIA posted 3Q12 bottom line of Rp178bn, +18.3% QoQ and +250.1% YoY, formed 81% of our and 78 % of the street’s expectations.
• 9M12 earnings reached Rp553bn, +205.3% YoY, accounting for 104% of our and 93% of the street’s FY12 estimates.
• SSIA’s 9M12 gross margin improved by 9.7% to 36.3% and net margin grew by 12.5% to 20.8%.
Top line Discussion
• SSIA posted 3Q12 revenue of Rp891bn, slightly improved 0.8% QoQ while grew 41.6% YoY, +8% higher than our 3Q sales forecast.
• SSIA’s 9M12 top line surged by 22.4% YoY to Rp2.6tr, accounting for 81% of our FY12 estimate and 78% of the street’s expectations.
Our recent discussion with management reveals that SSIA may complete the land-swap agreement for 1,000ha land in Karawang within 4Q12 to 1H13. With the successful bond issue (Rp500bn), SSIA is ready to acquire the lands soon after an agreement reached. We perceive this land acquisition is vital, as SSIA’s land reserve in Karawang is depleting, with only around net 250ha left (2-3 years development life), due to strong land sales in this year. While for Bekasi areas, SSIA owned 2,000ha license area to acquire within the next 3-4 years. To date, SSIA has acquired Bekasi’s land around 120ha-150ha (40%-50% from acquisition target of 300ha in 2012) with acquisition price of below Rp30k/sqm.
We maintain our HOLD rating on SSIA, due to limited upside from our target price of Rp1,200/share (30% discount to NAV). We have not take into account the possible 1,000ha addition of land bank in Karawang, until we see more progress on the process. The stock currently trading at 45% discount to NAV, 2013PE of 8.2x and 2013PBV of 2.2x.