PT Alam Sutera Realty is a property development company. Co. is engaged in the construction and management of residential area, commercial areas, industrial areas, and also the management of shopping centers, recreation centers and hospitality (mixed used development).
We believe that the recent sell-off has caused the market to decline, thus presenting an opportunity for investors to establish positions. Indonesia should weather the US-Sino trade war well and can actually benefit from it. Ytd, the JCI has outperformed the MSCI Asia Pacific Ex-Japan Index with 4.52% return compared to 2.4%. The JCI is now trading at slightly below average PE. We like interest ratesensitive stocks (financial, auto and property). Our picks are BBNI, BMRI, BSDE, GGRM, WIKA, SMRA, and ASII.
Alam Sutera Realty (ASRI IJ/HOLD/Rp322/Target: Rp340): 2Q19: Record loss, pre-sales target revised down; downgrade to HOLD. Telekomunikasi Indonesia (TLKM IJ/BUY/Rp4,280/Target: Rp4,730): 1H19: Net profit jumps 27% yoy; should post 20% yoy 2019 earnings growth. TRADERS’ CORNER Wijaya Karya Gedung (WEGE IJ): Technical BUY Semen Indonesia (SMGR IJ): Technical BUY
ASRI booked Rp1.3t in pre-sales in 1H19, or 28.4% of our full-year estimate, driven by the housing segment. We expect 2H19 pre-sales to be higher hoh as interest rate declines and on product launches. We also see higher recurring income, especially from GWK. The company’s leverage is getting healthier, assisted by the rupiah/US$ appreciating from the low of Rp15,000. Upgrade to BUY with a higher target price of Rp390, based on a 75% or -0.5SD discount to RNAV.
Tian Lun’s 1H19 results came in stronger than expected, with net profit leaping 88% yoy to Rmb405m on a revenue growth of 66% yoy to Rmb3.15b. 1H19 profit growth outpaced our and consensus’ full-year growth forecasts of 58% and 60% yoy respectively. Blended gross margin remained flat at 26.3%. We expect Tian Lun to maintain the strong growth momentum in 2H19. Maintain BUY. Target: HK$10.80.
KEY HIGHLIGHTS CHINA Sector Insurance Total premiums growth dragged by weak P&C premiums growth. Results China Longyuan Power (916 HK/BUY/HK$4.42/Target: HK$6.23) 1H19: Robust wind farm development plan with manageable low finance costs. Geely Auto (175 HK/HOLD/HK$11.04/Target: HK$10.50) 1H19: Net profit down 40% yoy, in line. Maintain HOLD. Tongda Group (698 HK/BUY/HK$0.56/Target: HK$0.78) 1H19: Better-than-expected; light at the end of the tunnel. Upgrade to BUY. Xtep (1368 HK/BUY/HK$5.52/Target: HK$6.30) 1H19: Results in-line with stronger outlook in basketball and non-core brands....
Six major insurance companies have released their premiums income data for Jul 19. The moderation in total premiums growth was caused by weak premiums growth in the P&C segment, dragged by auto insurance premiums while non-auto insurance saw robust growth. The stock market remained flat in Jul 19 while market interest rate remains at its lowest level since 2017. Maintain MARKET WEIGHT; top pick is PICC P&C (2328 HK) with a target price of HK$10.00.
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