KPIG IJ - MNC Sekuritas Equity Report 1 April 2021

PT MNC LAND Tbk (KPIG IJ)

Tourism, Restaurant, and Hotel Sector

The World-Class Entertainment Hospitality

Office Space Rental Performance Continues to Grow During The Pandemic

•  KPIG record a revenue of IDR519.59 billion in 9M20 (-37.9% YoY, vs IDR836.37 billion in 9M19).
•  The largest contribution came from Security and other Services revenue arround 50.1% from total revenue of IDR260.48 billion in 9M20. Furthermore, office rental grew 6.69% YoY to IDR152.16 billion 9M20 (vs IDR142.62 billion 9M19).
•  KPIG managed to implement efficiency, shown in the decrease on Company expenses by -19.5% YoY to IDR406.11 billion 9M20 (vs IDR504.55 billion 9M19). While, gross profit margin stood at 21.84% in 9M20 (vs 39.67% in 9M19).
•  Thus, KPIG recorded a net profit of IDR186.50 billion 9M20.

Better Tourism Outlook

•  KPIG have just obtained a Special Economic Zone (SEZ) for MNC Lido City for tourism purpose.
•  By obtaining the SEZ Tourism status, businesses the MNC Lido City area (Cigombong, Bogor, West Java) will receive incentives for: 1) Income tax; 2) VAT; 3) Import Duty; 4) Luxury Goods Tax (PPnBM); as well as other permits.
•  After the completion, the SEZ is expected to be the host for 3.17 million tourists every year, further develop MSMEs and the creative economy, as well as increasing local government revenue.

MNC Lido City: The All-Round Residence and Destination

•  Currently MNC Lido City is developing commercial, tourist destinations and integrated resorts covering an area of 3,000 hectares, namely: 1) MNC World Lido which will become the first world-class theme park in Indonesia with advanced technology; 2) International Golf Club Lido featuring 18-hole PGA standard championship golf course; 3) Transit Oriented Development; 4) Lido Music & Arts Center; 5) Movieland; 6) Lido World Garden; & 7) International circuits, various hotels, retail and dining, techno park and data center, universities and office areas will be built soon.
•  MNC Lido City is located about 60 km from Jakarta making it one of the integrated tourism SEZ areas and the closest to the most populous area in Indonesia. In addition, with a cold atmosphere in the mountainous area, MNC Lido City is a strategic location for a vacation and enjoying a beautiful views in the middle of an urban atmosphere

Movieland: The most Comprehensive Film Production Area

•  MNC Studios International (MSIN) will build Movieland which will offer integrated indoor and outdoor premium sets and props for films, TV and OTT drama-related productions, and a lodging for talents and production team which will lower production cost.
•  In addition, Movieland will also have an indoor studio covering an area of ​​1,500 square meters with a giant green screen to support film and drama series productions. Furthermore, MSIN is also preparing various other areas for shooting colossal scenes with royal backgrounds in Indonesia such as Islamic and Hindu kingdoms are also being developed.

Valuation and Recommendation : NOT RATED

Based on the Company data, KPIG 9M20 RNAV was IDR472 per share. However the stock price is reflected at a 70% discount to RNAV and trailing PBV currently at 0.39x, near –1.5STD PBV. While MNCS is affiliated with the Company, it does not offer any recommendation related to company prospects. Recommendation: NOT RATED.

KPIG