INDONESIA

ASRI IJ
Price 17 Oct 11 12-month target Upside/Downside Valuation
- RNAV

Outperform Rp460
Rp % Rp 560 21.7 745

Alam Sutera Realty

Charging ahead
Event
We upgrade our earnings and NAV forecasts, by including Pasar Kemis launches and market value in our calculations, as the company moves closer to receiving approval for its masterplan. As a result, we upgrade our TP by 18% to Rp560/share. Maintain Outperform.

GICS sector Real Estate Market cap Rpbn 8,217 30-day avg turnover US$m 4.8 Market cap US$m 929 Number shares on issue m 17,863 Investment fundamentals
Year end 31 Dec Revenue EBIT EBIT growth Reported profit EPS rep EPS rep growth PER rep Total DPS Total DPS growth Total div yield ROA ROE Net debt/equity P/BV 2010A 2011E 2012E 2013E bn 765.2 1,406.8 2,285.4 2,360.6 bn 343.1 638.9 1,160.5 1,180.4 % 210.1 86.2 81.6 1.7 bn 290.5 533.6 972.4 1,012.4 Rp 16.3 29.9 54.4 56.7 % 202.6 83.7 82.2 4.1 x 28.3 15.4 8.5 8.1 Rp 4.0 4.0 7.4 13.5 % 3,220.5 0.0 83.7 82.2 % 0.9 0.9 1.6 2.9 % 8.4 11.8 16.6 14.4 % 14.0 21.9 31.5 26.0 % -2.9 16.9 20.0 11.2 x 3.7 3.1 2.3 1.9

Impact
Ready demand for Pasar Kemis products. We expect October sales will be successful, resulting in Rp446bn additional pre-sales from Pasar Kemis, helped by investor type buyers (typical for new township projects in Jakarta). Real demand is expected to come in after the township starts to take shape, from workers in the surrounding industrial estates, in Serpong commercial areas, and in Jakarta, as land prices have become more expensive in suburban areas. Despite its price premium to competitors, we believe Pasar Kemis will excel due to its size, facilities and ease of access. Earnings to almost double next year due to 40% increase in FY11 presales. Higher FY11 pre-sales due to Pasar Kemis inclusion and higher Serpong pre-sales, mainly due to strong demand for commercial products. Pre-sales to decline 4% yoy to Rp2.8tr, despite a 25% increase from our previous forecasts, as the company will be more focused on Pasar Kemis than Serpong, as landbank in Serpong is diminishing. The impact of higher FY11 pre-sales will be apparent in FY12 earnings, which increased by 82% yoy. We expect earnings to be flat in 2013, when the bulk of Pasar Kemis sales is recognized and this results in a 4% lower net margin than our previous assumptions. Continued land acquisition will increase gearing to 28% next year. Currently, Pasar Kemiss landbank is 1,017Ha, while the license is for 2,600Ha. The company plans to accumulate up to 2,000Ha of land in the next 2 years. We estimate this will cost the company about Rp889bn in the next 2 years, which should be manageable as the financing gap in our forecasts will only be about Rp500bn. Based on this calculation, we expect the companys net gearing and gearing will peak at 20% and 28%, respectively in 2012

ASRI IJ rel JSX performance, & rec history

Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.

Source: FactSet, Macquarie Research, October 2011 (all figures in IDR unless noted)

Earnings and target price revision

FY12 and FY13 earnings are increased 20% and 9%, respectively, due to higher presales. Pre-sales are increased by 40% in 2011 and 25% in 2012. TP is increased by 16% to Rp560 on the back of a 27% increase to NAV and higher discount to NAV of 25% to take into account the new project risk.

Price catalyst
Felicia Barus +62 21 2598 8480 felicia.barus@macquarie.com Stephanie Santoso +62 21 2598 8485 stephanie.santoso@macquarie.com

12-month price target: Rp560 based on a RNAV methodology. Catalyst: Higher pre-sales, higher pricing, higher sales volume

Action and recommendation

Maintain our Outperform recommendation. The shares are currently trading at a 38% discount to NAV, however Alam Sutera is the cheapest stock in the sector in terms of PE at 8.5x 2012E PE.

18 October 2011 PT Macquarie Capital Securities Indonesia

Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website www.macquarie.com.au/disclosures.
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