Company Update

14 November 2019

KPIG 9M19 - MNC Sekurtas Equity Report


Office, Hospitality and Tourism Sector


Keep Moving Forward


Financial Result in 9M19: Bottom Line is Still Hiking

KPIG continues to hike, this is reflected in the 9.12% YoY rise in revenue, amounting to IDR 836.37 billion in 9M19. The hotel, resort and golf division, as the Company’s main business, weakened by 0.93% YoY to IDR382.64 billion in 9M19 although it still held the largest contribution of around 45.75% to total revenue. The Property and Security Management Services generated the highest growth of 41.25% YoY or IDR277.32 billion, followed by the office space rental division which also grew by 3.20% YoY or equals to IDR142.62 billion, while the Company’s non-recurring income declines by 26.04% YoY to IDR33.79 in 9M19. Nevertheless, KPIG has managed to maintain Gross Profit Margin at the level of 39.7% and EBITDA margin at 20,4% in 9M19. Along with the revenue growth, Net Income also surged to IDR321.29 billion in 9M19 (vs IDR2.03 billion in 9M18) with the increase in Net Profit margin at the level of 38.41% (vs 0.26% in 9M18).


Growth Prospect of Hospitality Asset Contribution

MNC Land just had a successful soft launch of Trump Residences Lido and Bali that was held on August 12th, 2019. Trump Residences Bali features a total of 144 ultra-luxurious residences offering an unparalleled exclusive lifestyle, while Trump Residences Lido features 281 luxury villas. This is followed by a Grand Opening of Oakwood Hotel and Residence in Surabaya on September 9, 2019. This hotel marks MNC Land’s strong presence in Indonesia’s 2nd largest city in hospitality business by providing 144 rooms operated by Oakwood, an award-winning and the largest service apartment operator in the world. Meanwhile Park Hyatt Jakarta, as the first and the only Park Hyatt in Indonesia, is currently in the interior finalization stage, the Company is still on track to fully commence the operations of Park Hyatt Jakarta by the end of 2019.


Diving into Co-Working Office : Koléga

The company has just held the soft opening of MNC x Koléga, its very first co-working space located at Park Tower Jakarta on October 1st and followed by a Grand Opening on November 8, 2019. MNC x Koléga is the most strategic and spacious co-working space developed by MNC Land collaborate with Koléga, one of the most reliable co-working space providers in Indonesia. Located on the 10th and 11th floors of Park Tower, this co-working space is strategically located in the heart of Jakarta, at MNC Center, Kebon Sirih. Several services and room types are available, such as hot desks, private office suites, meeting rooms, conference rooms, and spaces that can be used to hold various events. MNC Land keeps on innovating and continues to align with today’s market condition and trend, proven by the collaboration with Koléga as a starting milestone in building co-working, co-living and co-retail areas which will escalate the company’s recurring income growth.


Lido Lake Development : Getting More Exciting!

Lido Lake area is continuously being developed into various tourist attractions. MNC Land is planning to revitalize Lido Lake and transform the area to be more attractive and opening new doors for more developments. One of them being a history-based establishment called Soekarno Park, where once the First President of Indonesia had set foot in and wrote a book in the villa as well as the nearby area, which are now being built into a new destination. Soekarno Park will have a restaurant, retail establishments, a food court, a coffee shop, a lakeside pool and Soekarno Villa Preserved Building. Moving on, KPIG plans to develop the biggest outbound facilities in Southeast Asia, called Lido Adventure Park that will consist of more than 60 games on an extensive area near Soekarno Park, Lido Lake Resort. The adventure park will provide exciting and challenging courses such as an over-the-lake Flying Fox with the height of 260m, a Sky Bike, Archery and Kayaking arena, tree house and kids playground. Both of these new touristic spots are planned to be completed in FY20F.


Valuation and Recommendation : NOT RATED

Based on Company data, 3Q19 RNAV of KPIG is IDR525 per share. However the stock price is reflected at a 74% discount to RNAV and trailing PBV as of 9M19 by 0.49x, near –2.65 STD of PBV. While MNCS is affiliated with the Company, it does not offer any recommendation related to company prospects. Recommendation: NOT RATED.


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