EQUITY RESEARCH

BEST - Results Update - 29 October 2021

CIPTADANA SEKURITAS ASIA

BUY Bekasi Fajar Industrial Estate

First time land sold in 3Q21 after zero sales last year
TP: Rp170 (+31.8%)

Sector Property Challenging 9M21, bottom line below expectation

Bekasi Fajar Estate (BEST) booked another disappointing quarter with Rp16 bn net loss in
Bloomberg Ticker BEST IJ
3Q21 after suffering Rp20 bn net loss in 2Q21. The 9M21 revenues are below our
Share Price Performance
expectation, slid -41.9% YoY to Rp118 bn, mainly generated by maintenance fee segment
with Rp87 bn (+0.1% YoY), followed by hotel & commercials Rp22 bn (-39.3% YoY), while
Last price (Rp) 129 land sales only contributed Rp9 bn (-88.7% YoY) from recognition of 0.3 ha industrial land
Avg. daily T/O (Rpbn/USDmn) 2.6/0.2 sold. COGS only reduced by -22.7% YoY hence brought gross profit down to Rp50 bn,
slashed by -56.4% YoY with GPM decreased to 42.9% (vs. 57.1% in 9M20). Due to
3m 6m 12m
increasing opex ratio, the Company experienced an operating loss of Rp17 bn, a reversal
Absolute (%) 5.7 -14.0 -22.8 from Rp37 bn operating profit a year ago. Meanwhile below operating line, decrease in
Relative to JCI (%) -1.7 -23.6 -50.5 forex loss and interest expense each by -78.9%/21.2% to Rp11 bn/Rp76 bn respectively,
helped decelerated the drop in bottom line. The Company recorded a net loss of Rp91 bn in
52w High/Low price (Rp) 216/117
9M21, a slight improvement from Rp107 bn net loss a year ago, which is fall short of our
expectation.
250 0%
Another 3.5 ha industrial land sales targeted for 4Q21
200 -10%
Following sluggish industrial land sales this year due to the pandemic, BEST revised its
-20%
150 FY21 marketing sales target to 5 ha from previously 10 - 15 ha. Meanwhile, average
-30%
100 selling price (ASP) remains unchanged at Rp2.6 – 3.2 mn/sqm. In 9M21, the Company
-40%
50
recorded 1.5 ha of marketing sales to automotive and packaging sector with ASP of Rp2.8
-50%
mn/sqm. The Company’s added another 3-ha addition to its land bank this year making a
- -60%
total 697 ha as of September 2021. Though sales were slow in 9M21, level of land inquiry
Oct-20

Apr-21
Nov-20
Dec-20
Jan-21

Jun-21

Aug-21
Sep-21
Jul-21
May-21
Feb-21
Mar-21

remains high at 76 ha. We are optimistic sales will improve in sequential quarters with
BEST 1yr Rel. to JCI (RHS) stable ASPs, in line with gradually ease restrictions of economic and social activities post-
pandemic.

Pent up demand should boost industrial sector

Outstanding shrs (mn) 9,647 We believe weak demand for industrial estates and warehouse complexes was the result
of the wait-and-see mode of business players concerning government regulations and
Mkt. Cap (Rpbn/USDmn) 1,244/88
pandemic conditions. However, as internet of things intensify, demand for warehouses and
Estimated free float (%) 42.0 data centers should increase. Industrial estates will become more attractive as internet
Major shareholders thrives. As of June 2021, the BPKM recorded FDI from Real Estate Sector surged 12.8%
YoY with total FDI climbed 15.2% YoY. During the challenging period, real estate
PT Agro Manunggal Land Dev 40.3% contribution to total FDI only slightly contracted to 8.1% from 8.3% in 1H20. We expect the
Daiwa House Industry Co LT 10.0% condition will improve supported by pent up demand in industrial sector.

Maintain BUY, lower TP Rp170/sh

EPS Consensus Judging from weaker-than-expectation 9M21 financial performance, we revise down our
earnings forecast for BEST and arrive at lower 2021F/2022F bottom line of -Rp5 bn/Rp3
Ciptadana Cons. % Diff bn respectively. We apply 83% (last 5-year mean discount) to our NAV and arrive at lower
2021F -0.5 13.0 -103.7 2022F TP of Rp170/sh (previously Rp190/sh). Our new TP offers more than 30% upside
2022F 0.3 17.0 -98.3
from current price therefore we maintain BUY rating.

Exhibit 1 : Financial Highlights

Year to 31 Dec 2019A 2020A 2021F 2022F 2023F
Revenue (Rpbn) 951 242 153 250 378
Operating profit (Rpbn) 507 22 39 54 73
Net profit (Rpbn) 380 -115 -5 3 24
EPS (Rp) 39.4 -11.9 -0.5 0.3 2.5
EPS growth (%) -10.0 n/m n/m n/m 791.5
Yasmin Soulisa EV/EBITDA (x) 4.5 70.2 50.4 35.9 32.8
+62 21 2557 4800 ext. 799 PER (x) 3.3 -10.8 -267.2 457.7 51.3
soulisayasmin@ciptadana.com PBV (x) 0.3 0.3 0.3 0.3 0.3
Dividend yield (%) 6.8 0.0 0.0 0.0 0.0

http://www.ciptadana.com ROE (%) 8.5 -2.6 -0.1 0.1 0.6

Source : BEST, Ciptadana Estimates

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 EQUITY RESEARCH
BEST - Results Update - 29 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 2 : BEST 9M21 Result

(Rp bn) 9M21 9M20 YoY 3Q21 2Q21 QoQ FY21F 9M/21F
Revenues 118 202 -41.9% 43 38 11.6% 297 40%
Cost of revenue -67 -87 -22.7% -26 -20 27.7%
Gross profit 50 115 -56.4% 17 18 -6.6% 162 31%
Gross margin (%) 42.9 57.1 - 14.2 39.1 46.8 - 7.6

G&A expenses -67 -78 -14.1% -24 -22 5.3%

Marketing expenses -0 -1 -52.5% -0 -0 -35.9%
Operating expenses -67 -79 -14.4% -24 -22 5.2%
Operating profit -17 37 n/m -7 -4 52.8% 58 n/m
Operating margin (%) - 14.3 18.3 - 32.6 - 15.8 - 11.5 - 4.3

Forex gain (loss) -11 -51 -78.9% 12 5 158.0%

Interest income 11 6 79.7% 1 5 -87.7%
Interest expense -76 -96 -21.2% -25 -25 -0.2%
Other income (exp) 4 0 744.3% 4 -0 n/m
Total other inc (exp) -72 -141 -49.2% -8 -15 -47.8%

Pre-tax profit -88 -104 -14.8% -15 -20 -25.3%

Tax -2 -4 -36.2% -1 -1 26.6%

PBMI -91 -108 -15.6% -16 -20 -23.9%

MI 0 0 17.2% 0 0 -72.5%
Net profit -91 -107 -15.6% -16 -20 -23.8% 10 n/m
Net margin (%) - 77.1 - 53.1 - 24.0 - 36.2 - 53.1 16.9

Revenue breakdown
Sales of land 9 80 -88.7% 9 0 n/m
Maintenance fee 87 87 0.1% 29 29 0.4%
Hotel 4 5 -26.0% 1 1 -32.7%
Others 18 30 -41.7% 4 6 -33.0%

Gross profit margin (%)

Sales of land 63.9% 70.5% -6.6% 63.9% n/m n/m
Maintenance fee 41.0% 44.4% -3.5% 34.5% 45.2% -10.8%
Hotel -75.8% -92.6% 16.8% -122.7% -51.9% -70.8%
Others 68.7% 84.8% -16.1% 56.9% 95.6% -38.8%

Source : BEST, Ciptadana Estimates

Exhibit 3 : Forecast Changes

New Original Diff (%)
2021F 2022F 2021F 2022F 2021F 2022F
Financials (Rp bn)
Revenue 153 250 297 344 -48.5 -27.3
Gross profit 68 104 162 203 -58.2 -48.6
Operating profit 39 54 58 72 -32.2 -24.4
Net profit -5 3 10 16 -146.6 -83.0

Margins (%)
Gross profit 44.2 41.8 54.5 59.0
Operating profit 25.7 21.8 19.5 20.9
Net profit -3.0 1.1 3.4 4.7

Source : Ciptadana Estimates

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 EQUITY RESEARCH
BEST - Results Update - 29 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 4 : ESG Assessment

Company description Industrial estates developer and operator

Environmental
1. Bekasi Fajar’s land development activity brings added value to
land surrounding area.
2. The company develops commercial, hotel and industrial estate
while maintains balanced environment through development
of green areas.
3. Large green area is regarded as moderately important factor
by most tenants.

Social
1. Company’s recurring income projects (e.g. office and
industrial complex) could open large scale of job employment.
ESG-related
opportunity or risk 2. Company’s industrial estates are equipped with large roads
assessment that accessible to public and not exclusive for tenants only.
3. Better job opportunities brought by Bekasi Fajar’s property
add intangible and economic value to surrounding
communities.

Governance
1. The Company applies Code of Conduct which guides positive
employee and company behavior in terms of employment
relationships, work relationships and when the work is carried
out.
2. The Company has Audit Committee which is responsible for
giving directions and suggestions to BOC related to
recommendations from BOD.

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 EQUITY RESEARCH
BEST - Results Update - 29 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 5 : Income Statement

Year to 31 Dec (Rpbn) 2019A 2020A 2021F 2022F 2023F
Revenue 951 242 153 250 378
COGS -317 -115 -85 -146 -224
Gross profit 633 127 68 104 154
Oper. expenses -126 -105 -28 -50 -82
Oper. profit 507 22 39 54 73
EBITDA 514 32 53 64 83
Interest income 36 7 53 43 46
Interest expense -163 -138 -97 -91 -86
Other income (exp.) 0 -1 0 0 0
Pre-tax profit 409 -109 -4 7 33
Income tax -29 -6 0 -4 -9
Minority interest 0 0 0 0 0
Net profit 380 -115 -5 3 24

Exhibit 6 : Balance Sheet

Year to 31 Dec (Rpbn) 2019A 2020A 2021F 2022F 2023F
Cash & cash equivalent 679 799 371 695 281
Acct, receivables 542 50 32 52 79
Inventory 1,144 1,577 1,798 1,583 2,080
Other curr, asset 236 296 578 607 639
Total current asset 2,601 2,723 2,779 2,936 3,079
Fixed assets - net 185 163 142 122 103
Other non-curr.asset 3,447 3,231 3,114 3,021 2,989
Total asset 6,399 6,282 6,209 6,262 6,362

ST debt + curr. maturity 111 174 161 151 142

Acct, payable 42 43 32 54 84
Advances received 0 0 0 0 0
Other curr. liab 76 42 28 52 85
Long term debt 1,661 1,629 1,622 1,612 1,603
Other non-curr, liab, 42 38 14 38 68
Total liabilities 1,931 1,926 1,857 1,907 1,983
Shareholder equity 4,468 4,356 4,352 4,354 4,379
Minority interest 0 0 0 0 0
Total liab + SHE 6,399 6,282 6,209 6,262 6,362

Exhibit 7 : Per Share Data

(Rp) 2019A 2020A 2021F 2022F 2023F
EPS 39.4 -11.9 -0.5 0.3 2.5
BVPS 463.2 451.6 451.1 451.4 453.9
DPS 8.8 0.0 0.0 0.0 0.0
FCF per share -23.0 9.3 -39.9 33.2 -44.2

Source : BEST, Ciptadana Estimates

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 EQUITY RESEARCH
BEST - Results Update - 29 October 2021
CIPTADANA SEKURITAS ASIA

Exhibit 8 : Cash Flow

Year to 31 Dec (Rpbn) 2019A 2020A 2021F 2022F 2023F
Net income 380 -115 -5 3 24
Depreciation 7 10 13 10 10
Chg in working cap. -324 52 -215 222 -490
Other -15 -87 -308 -19 -13
CF-Oper activities 48 -140 -515 216 -469

Capital expenditure -13 21 28 21 21

Others -257 209 101 84 22
CF-Investing activities -270 230 129 104 43

Net change in debt -146 32 -20 -19 -18

Net change in equity 0 0 0 0 0
Dividend payment -84 0 0 0 0
Other financing 4 -1 -23 23 31
CF-Financing activities -227 31 -43 4 12

Net cash flow -450 120 -428 324 -414

Cash - begin of the year 1,129 679 799 371 695
Cash - end of the year 679 799 371 695 281

Exhibit 9 : Key Ratios

Year to 31 Dec 2019A 2020A 2021F 2022F 2023F
Growth
Revenue (%) -1.3 -74.5 -36.9 63.4 51.3
Operating profit (%) -11.0 -95.6 77.5 38.4 33.6
Net profit (%) -10.0 n/m n/m n/m 791.5
Profitability Ratios
Gross margin (%) 66.6 52.6 44.2 41.8 40.8
Operating margin (%) 53.3 9.1 25.7 21.8 19.2
EBITDA margin (%) 54.1 13.2 34.4 25.7 21.8
Net margin (%) 40.0 -47.5 -3.0 1.1 6.4
ROA (%) 5.9 -1.8 -0.1 0.0 0.4
ROE (%) 8.5 -2.6 -0.1 0.1 0.6
Liquidity Ratios
Current ratio (x) 11.4 10.5 12.6 11.4 9.9
Quick ratio (x) 6.4 4.4 4.4 5.3 3.2
Cash conversion cycle (days) 1,417.7 5,393.9 7,704.8 3,965.3 3,387.3
Activity Ratio
Inventory turnover (days) 1,315.5 5,011.5 7,696.0 3,967.2 3,390.9
Receivable turnover (days) 116.4 446.4 98.2 61.2 63.1
Payable turnover (days) 14.1 64.0 89.4 63.1 66.7
Solvency Ratio
Interest cover (x) 3.2 0.2 0.5 0.7 1.0
Debt to equity ratio (x) 0.4 0.4 0.4 0.4 0.4
Net debt to equity (x) 0.2 0.2 0.3 0.2 0.3

Source : BEST, Ciptadana Estimates

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 EQUITY RESEARCH
BEST - Results Update - 29 October 2021
CIPTADANA SEKURITAS ASIA

EQUITY RESEARCH

HEAD OF RESEARCH ANALYST ANALYST

Arief Budiman Erni Marsella Siahaan, CFA Yasmin Soulisa
Strategy, Automotive, Heavy Equipment, Banking Property, Plantations
Construction, Oil & Gas and Shipping T +62 21 2557 4800 ext 919 T +62 21 2557 4800 ext 799
T +62 21 2557 4800 ext 819 E siahaanerni@ciptadana.com E soulisayasmin@ciptadana.com
E budimanarief@ciptadana.com

ECONOMIST ANALYST ANALYST

Nicko Yosafat Fahressi Fahalmesta Robert Sebastian
T +62 21 2557 4800 ext 820 Cement, Toll Road, Poultry Retail, Healthcare
E yosafatnicko@ciptadana.com T +62 21 2557 4800 ext 735 T +62 21 2557 4800 ext 760
E fahalmestafahressi@ciptadana.com E sebastianrobert@ciptadana.com

ANALYST ANALYST ANALYST

Gani Thomas Radityo Muhammad Fariz
Telco, Tower, Media Coal, Metal Mining Consumer, Cigarette
T +62 21 2557 4800 ext 734 T +62 21 2557 4800 ext 795 T +62 21 2557 4800 ext 740
E gani@ciptadana.com E radityothomas@ciptadana.com E farizmuhammad@ciptadana.com

TECHNICAL ANALYST RESEARCH ASSISTANT

Asrul Husni Sumarni
T +62 21 2557 4800 ext 780 T +62 21 2557 4800 ext 920
E husniasrul@ciptadana.com E sumarni@ciptadana.com

EQUITY SALES

DIRECTOR OF INSTITUTIONAL EQUITY SALES

Dadang Mulyana
Plaza ASIA Office Park unit 2
Jl. Jend. Sudirman Kav. 59
Jakarta - 12190
T +62 21 2557 4800 ext 838
F +62 21 2557 4900
E mulyanadadang@ciptadana.com

BRANCH OFFICES

JAKARTA - MANGGA DUA SURABAYA SURABAYA

Komplek Harco Mangga Dua Intiland Tower Surabaya
Rukan Blok C No.10 Ground Floor Suite 5 & 6
Jl. Mangga Dua Raya Jl. Panglima Sudirman 101-103
Jakarta - 10730 Surabaya - 60271
T +62 21 600 2850 T +62 31 534 3938
F +62 21 612 1049 F +62 31 534 3886

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 EQUITY RESEARCH
BEST - Results Update - 29 October 2021
CIPTADANA SEKURITAS ASIA

Analyst Certification

Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her personal views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not
and will not be influenced by any part or all of his or her compensation.

Disclaimer

This report does not constitute an offer to buy or sell any security/instrument, invitation to offer or recommendation to enter into any
transaction. Nor are we acting in any other capacity as a fiduciary to you. When making and investment decision, you should determine,
without reliance upon us or our affiliates, the economic risks and merits (and independently determine that you are able to assume these
risks) as well as the legal, tax and accounting characterizations and consequences of any such transaction. In this regard, by accepting this
report, you acknowledge that (a) we are not in the business of providing (and you are not relying on us for) legal, tax or accounting advice,
(b) there may be legal, tax or accounting risks associated with any transaction, (c) you should receive (and rely on) separate and qualified
legal, tax and accounting advice and (d) you should apprise senior management in your organization as to such legal, tax and accounting
advice (and any risks associated with any transaction and our disclaimer as to these matters.

The information contained in this report is based on material we believe to be reliable; however, we do not represent that it is accurate,
current, complete, or error free. Assumptions, estimates and opinions contained in this report constitute our judgment as of the date of the
document and are subject to change without notice. Any projections are based on a number of assumptions as to market conditions and
there can be no guarantee that any projected results will be achieved. Past performance is not a guarantee of future results. PT
CIPTADANA SEKURITAS ASIA AND ITS AFFILIATES SPECIFICALLY DISCLAIMS ALL LIABILITY FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL
OR OTHER LOSSES OR DAMAGES INCLUDING LOSS OF PROFITS INCURRED BY YOU OR ANY THIRD PARTY THAT MAY ARISE FROM ANY
RELIANCE ON THIS REPORT OR FOR THE RELIABILITY, ACCURACY, COMPLETENESS OR TIMELINESS THEREOF.

Disclaimer: This document is not intended to be an offer, or a solicitation of an offer, to buy or sell relevant securities (i.e. securities
mentioned herein or of the same issuer and options, warrants or rights to or interest in any such securities). The information and opinions
contained in this document have been compiled from or arrived at in good faith from sources believed to be reliable. No representation or
warranty, expressed or implied, is made by PT CIPTADANA SEKURITAS ASIA or any other member of the Ciptadana Capital, including any
other member of the Ciptadana Group of Companies from whom this document may be received, as to the accuracy or completeness of the
information contained herein. All opinions and estimates in this report constitute our judgment as of this date and there can be no
assurance that future results or events will be consistent with any such opinions, forecasts or estimates. The information in this document
is subject to change without notice; its accuracy is not guaranteed; and it may be incomplete or condensed.

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