CLSA Asia-Pacific Markets cut its target price on shares of
Indonesian property developer PT Bumi Serpong Damai Tbk
to 1,400 rupiah from 1,800 because of uncertainty over
its purchase of an industrial estate and expectations of lower
profits in the next two years due to interest payments on a
recent bond issue.
The profit forecast was cut by 2-5 percent, CLSA analyst
Sarina Lesmina wrote in a note on Tuesday.
But CLSA maintained its 'buy' rating on the stock, saying
Bumi Serpong's shares trade at below replacement value.
Bumi Serpong's operational performance is good but the
company's share price performance has been weak in the past
quarter because of uncertainty over its acquisition of Deltamas
industrial estate, which is awaiting approval from the estate's
operator, Japan's Sojitz. Sojitz holds a 25 percent stake.
Deltamas has a 2,200 hectare land bank. The estate,
expandable to 3,000 hectares, was started around 10 years ago
with mostly Chinese companies as tenants.
The property company's shares were down 1.92 percent at
1,020 rupiah, while the broader index was down 0.47
1130 (0430 GMT)
(Reporting by Andjarsari Paramaditha)