Sinarmas Land

Sinarmas Land: OSK DMG initiates Coverage with Buy call and $1.01 TP. The house notes that Sinarmas Land (SML) has one of the largest and most diversified landbanks in Indonesia and offers steady and resilient growth. Armed with a solid balance sheet and healthy cash flows, SML is embarking on an international expansion to broaden the group’s revenue base. One of the largest landowners in Indonesia. SML has one of the largest landbanks in Indonesia with more than 6000ha of land for future development. Its 51.5%-owned subsidiary, Bumi Serpong Damai Tbk (BSDE), is the largest property company in Indonesia by sales and market capitalization. BSDE pioneered the development of BSD City in Serpong, an integrated township with total development rights of 6000ha, almost half the size of the city of Paris. SML also owns 2000ha of industrial real estate and has an overseas property portfolio worth some $800m. S SML is in net cash position and generates more than $300m in operating cash flows per annum. Management intends to leverage on its strong balance sheet to embark on an international expansion, adding to its portfolio of prime commercial properties in gateway cities. Unlocking of value from legacy overseas assets. With the exception of its office property in West End London acquired last year, the rest of SML’s overseas properties in Singapore, Malaysia and China are legacy assets that are still carried at nominal cost in the balance sheet. Estimate the group could unlock as much as $600m from these properties. Trading at steep discount to SOTP valuation.