Citigroup Summary Takeaways from Citi Indonesia Investor Conference – Day 2, Summarecon Agung (SMRA.JK;Rp930;Analyzed Not Rated)

 Takeaways from Jakarta — Summarecon Agung presented at Citi's Indonesia Investor Conference on Aug.4-5.Below are key takeaways.

 Pre-sales — Summarecon posted 1H10 pre-sales of Rp1,259bn,66%of revised target of Rp1,900bn for FY10 (up 19%from early target of Rp1,600bn).39%of 1H10 pre-sales was generated from Kelapa Gading, 34%from Serpong,and the remaining 27%from Bekasi Project.SMRA revised its FY10 target pre-sales target due to higher sales expectation for the Bekasi Project.The company is optimistic that eventual 2010 turnover could be even higher and may exceed more than Rp2,000bn.

 Serpong — A new cluster would be launched this year and will be called The Springs.The company is targeting to book a total sale value of Rp400bn from selling 445units this year.The Springs covers a total area of 100ha with a development period of 5-6 years up to 2016,and consists of 13 sub- clusters of residential houses.The company said that it has received 1,000 applicants keen to be the buyers,and each of them is given ballot, guaranteeing them to be prioritized in the next launches.

 Kelapa Gading — Construction of Menara Satu office will commence this year with total GFA of 29,000sqm,of which half would be sold as a strata title and another half will be rented out.Rental rate is expected to be Rp150,000/sqm (including the service charge),and the targeted selling price (for strata title office)of Rp16,000,000/sqm (~US$1800).The company also disclosed that BCA has confirmed its intention to be a tenant.

 Bekasi — Summarecon booked better-than-expected sales of Rp336bn in Bekasi this year.During the launch of the two clusters in April,the company sold 464 units within five hours.It is planning to launch two more identical clusters this October.

 Investment Property — Summarecon aims to increase its investment property portfolio from currently 39%to about 50%in the future.It has launched a new hotel,Harris Hotel,in conjunction with Mall Kelapa Gading. Harris Hotel was launched last May and has achieved an average occupancy rate of 70%and average rate of Rp500,000/night year-to-date.

 Summarecon Mall Serpong (Phase 2)— The company is spending Rp350bn to expand its Summarecon Mall Serpong,located in Serpong.It is expanding its retail space by adding a GFA of 50,000sqm and an NLA of 45,000sqm and a multi-storey carpark with a total capacity of 2,000 bays.After the expansion,it would have a total GFA of 93,000sqm,an NLA of 79,000sqm.

 Capex — The company has allocated Rp430bn for capex this year,of which Rp100bn has been used for Harris Hotel-Kelapa Gading development in the 1Q10.The remainings of Rp80bn would be used for Menara Satu development,Rp100bn for Summarecon Bekasi Infrastructure,and Rp150bn for Summarecon Mall Serpong (Phase2).