Sinarmas Land

[spiritz89]

I can't figure out why this stock is tanking despite it's strong fundamentals. I mean doesn't it have a huge land bank?

Anyone has any insight?

(Vested).

[fundamentalman]

I can't figure out why this stock is tanking despite it's strong fundamentals. I mean doesn't it have a huge land bank?

Anyone has any insight?

(Vested).

Long term story is still intact, in my view.

The huge land bank in serpong is their main asset. Serpong area would receive some more boost in future with the construction of JORR2 toll road (boosting accessibility to areas like Soekarna Hatta Int Airport). 

Their other child company, Deltamas, has industrial landbank in Karawang area. Govt is improving accessibility to that area with construction of Jakarta-Cikampek elevated road and Jakarta-Cikampek 2 toll road. The high speed train from jakarta to bandung would also pass Karawang area. But currently, sales of industrial land are not doing that well (it did experience a boom in 2011-2013 period).

Debt is low (but please note that BSDE, their child company, has done several share placement rounds in the past).

Currently, Indonesian property market is experiencing downturn after experiencing bubble a few years back. There is a glut of apartments, as affordability is way, way out of reach for ordinary Indonesians due to skyrocketing price starting from 2011 to 2013. The share of other developers listed in Indonesia Stock Exchange are not doing well too. E.g. APLN.ID/Agung Podomoro (down from 4xx to 19x, but company has some issue with Jakarta Administration regarding reclamation project off Jakarta cost), Bekasi Fajar/BEST.ID (industrial land player, from peak of 1000 to 26x).

Note that price of landed housing went really crazy during the bubble, with rental yield on landed home falling to as low as 2% (which is ridiculously low for emerging market like Indonesia), so correction is very normal.

Another short term threat is the weak currency and the central bank's move of raising interest rates, which would further dampen sentiment.

So, it is not company's specific issue... just the fact that property market in Indonesia is curently experiencing downturn.

===

Vested too @32.5c ... I am interested to buy more if price falls below 30c ... let's see.

[fanobell]

Is the management honest enough to declare all the land sale and distribute the earnings to shareholders? I am worried about Indon companies, because share holder interest isn't their top priority

[fanobell]

Followers of Sinarmas, how's the progress of the $400m investment
https://www.businesstimes.com.sg/real-es...am-project

[cyclone]

Investment in Mascot Private Trust

Sinarmas Land Limited announced that Golden Ray Development Pte. Ltd., a wholly-owned subsidiary of the Company, has subscribed for 6,042,296 stapled securities in a Mapletree Australia Commercial Trust known as MASCOT Private Trust, a stapled group comprising the Mapletree ROA Trust and the Mapletree QL Trust ("MASCOT"), representing approximately 6% of the total unitholders' equity in MASCOT, for an aggregate subscription price of Australian Dollar (AUD) 40 million (equivalent to approximately SGD37 million).

MASCOT is fully invested at closing and owns 10 Grade A office assets that are strategically located in key Australian gateway cities namely - Sydney, Melbourne, Adelaide, Brisbane and Perth - with a total asset value of about AUD1.4 billion. With a total net lettable area of approximately 160,000 square metres, the portfolio's occupancy stands at 94%. The tenant pool comprises reputable occupiers from well-diversified industries such as the technology, media and telecom, government as well as mining, oil and gas.

The Aggregate Subscription Amount for the Stapled Securities was determined based on AUD6.62 per Stapled Security. Each Stapled Security comprises 5 units in the Mapletree ROA Trust at AUD1.23 each and 1 unit in the Mapletree QL Trust at AUD0.47 each, collectively derived from the fair values of 8 of the commercial office buildings as of March 2019 and the acquisition cost of 2 commercial office buildings acquired after March 2019.

The Aggregate Subscription Amount was satisfied in full by a combination of internal resources and bank borrowings.

More details in https://links.sgx.com/1.0.0/corporate-an...ee8c628305

[weijian]

BT Mark-to-market had a column on Sinarmas Land voluntary offer and suggested some speculative play since the unfair offer is not too far from the IFA's range of values. Therefore I decided to take a quick look at the IFA's recommendation.

Pity the independent financial advisor W CAPITAL MARKETS, whom after liberally applying 2 discounts (0.63x to RNAV) and then another 20-22% holding company discount to the SOTP, still finds the offer for Sinarmas Land to be unfair but advise the directors to recommend shareholders to accept it.

SINARMAS LAND LIMITED VOLUNTARY UNCONDITIONAL CASH OFFER

Based on the above, the Offer Price of S$0.31 is below the estimated range of values of the Shares of S$0.350 to S$0.361 per Share.

Having regard to the foregoing considerations set out in this IFA Letter and information available to us as at the Latest Practicable Date, we are of the opinion that, on balance, the financial terms of the Offer are NOT FAIR BUT REASONABLE.

Accordingly, we advise the Independent Directors to recommend Shareholders to ACCEPT the Offer. Shareholders who wish to realise their investment in the Company can choose to sell their Shares in the open market if they can obtain a price higher than the Offer Price, after taking into account all transaction costs with open market transactions.

IFA offer:
https://links.sgx.com/FileOpen/1.%20Offe...eID=842651

[weijian]

The IFA has responded (luckily not to me) to SIAS. There is a lot sense and no sense, as usual. Sometimes, when a dog has 4 legs + 1 tail, you say it has 5 legs to suit you. And when 4 legs suit your situation, you call out the facade that the tail is not a leg.

Come to think of it, has any OPMI made decent money (after accounting for the risks and incurring brain damage) that is comfortably above opportunity costs by riding along with Indonesian Tycoons?

Response to The Business Times Article and The Edge Singapore Article of 5 May 2025

In addition, it should be noted that Sinarmas Land is a pure investment holding company with no immediate control over the assets owned by its IDX-listed subsidiaries which are managed by separate management teams with independent governance structures. Accordingly, the more likely and practicable way for Sinarmas Land to realise the value of its investments in the IDX-listed subsidiaries is to sell the shares of BSDE and DMAS which are actively traded and for which the market price provides an indication of fair value of the Listed Indonesia Assets as ascribed by the stock market

In our assessment of the fair value of the Remaining Unlisted Assets, as set out in paragraph 7.9.2 of our IFA Letter, we have highlighted, inter alia, that: (i) RNAV may not be a realisable value as the disposal values of such assets are likely to vary depending on the prevailing market and economic conditions; (ii) the RNAV computation does not take into account factors such as, inter alia, time value of money, legal and professional fees, liquidation costs, other potential duties, contractual obligations, regulatory requirements and availability of potential buyers, which would theoretically lower the RNAV that can be realized;

When performing a SOTP valuation analysis, it is a commonly accepted practice to apply a holding company discount to the valuation of the holding company relative to its sum of parts to reflect the true market perception of the risks and challenges associated with owning a holding company. Such discounts can also be attributable to the additional corporate expenses at the holding company, tax implications relating to dividend or capital distributions from the subsidiaries to the holding company, as well as investors’ potential lack of control over the underlying assets and their reduced marketability.

https://links.sgx.com/FileOpen/Response%...eID=844454

P.S. I had my fair share of luck when involved with China Minzhong many years ago. Thanks to Pak Antoni Salim for the rescue to make that a profitable investment (but maybe not worth it in terms of brain damage)