Government
plans to conduct many infrastructure projects
In spite of the
World Bank announced its prediction on Indonesia’s economic growth at 5.2 %, Government
seems self confidence to conduct many infrastructure projects to attain
economic growth at 5.8 %. There will be development of roads, power plant,
water reserve construction, sea port, bridge and incentive for home ownership.
The stimulus will appear a multiplayer effect in particular industry such as
automobile, construction, maritime and real estate.
Unfavorable
regulation on Loan to value and higher interest rate
The industry of
property in 2015 is forecasted growing slower than last year, the higher
interest rate increase the price. On other hand, the investor reduces their
investment in property because of unfavorable regulation on Loan to value which
arranges smaller loan to value ratio for more loan for purchase home, as a
result of this, investor should provide more cash to buy more property.
The central bank
wants to avoid speculation in investment of property with loan to value
regulation. Consequently, the real estate industry has to anticipate with
diversified their business such as increase recurring revenue from investment
property. For example the company increase cost of rent a space either for shop
or for office.
Commonly buyer
of real estate is sensitive to price and its financial cost; first of all, the
installment payment should suit with their monthly income.
According to
central bank, for residential property financing, it is 58 % financed from
internal fund. Bank loan is only at 29 % of total property residential
financing.
APLN
Increase
recurring revenue and internal fund
Based on its
annual report the company claims that it could increase recurring revenue from 5.3
% in 2010 to 20.5 % in to 2013. The company seems prefer to finance its project
from internal cash than bank loan. In fact, the sales in 2013 advanced slightly
at 4.5 % up than sales in 2012.
Avoid accumulating land bank and Strong available cash
with good marketing team
The company has
unique strategy in managing their assets; it does not accumulate land bank. As
a result of this, the company has high cash to sales ration in 2013. It is 47.4
% in 2013, higher than cash to sales ratio in 2012 which is at 47.4 %. The
company purchase sizeable land for its need in each project and it would rather
like to acquire another property company to get its asset than accumulating
land bank.
The company is
still doing reclamation of asset includes not yet developed land and also
interest capitalization to implement its business strategy. As a result of
this, the asset will up and the net income advances.
The activity
ratio has been longer in 2013 than 2012, the company could decrease its day’s
receivable but it experienced longer day’s inventory and days payable. There
has been an increase in land for development and the company did reclamation in
land bank at 2013.
Forecast
The revenue of
2014 is predicted increase at 10 % despite it is an increase in interest rate;
the company has strong internal cash and good reputable brand in property
industry. On other hand the multiplayer effect of decline in fuel price is
considered reducing inflation rate and increasing purchasing power of the
consumer. Based on BPS, the average growth of real estate industry in 2006 to
in 2012 is at 13 % (current price), the forecasted revenue is under the average
growth.
I took the same
ratio of profitability and activity of 2013 for forecast of year 2014 until
year 2016.
