FLASH NOTES

Visit our website at www.trimegah.com 20 March 2007

Sector:
Property Bakrieland Development
Reasons for Report: Big Things to Come
Company Visit
(ELTY.JK/ELTY IJ - Rp220) - Not Rated
Why is it Interesting?

Sizeable land bank in CBD. With 14.8ha of land bank located on the prime area of Jl. H.R. Rasuna Said, ELTY
is notably one of the biggest CBD players among its peers, namely JIHD (20.0ha), CTRA (7.0ha) and KIJA (2.2ha).
Currently, the company is in the midst of developing the first and the biggest super block project, including:
- Rasuna Office Park: 6.0ha of strata title office complex, 80.0% of available space has been sold.
- The 18th Residence: Strata title apartment with more than 60.0% of available units already sold.
- Rasuna Epicentrum: Town walk complex complete with office buildings, condominium, concert hall, TV station,
and entertainment center with access to transportation facilities, such as monorail, shuttle bus and busway.

Other big projects in Bogor, Legian and Krakatoa: Aside from the CBD projects, ELTY is also in the midst
of developing its land bank in Bogor, Kuta-Bali and Lampung:
Equity Research

- Bogor Nirwana Residence: A 100.0ha residential estate project with 80.0% of units sold. For further
residential development, ELTY plans to buy another 140.0ha of land.
- Legian Nirwana Hotel & Suites: Claimed to be the first strata hotel with 200 units for sale and 92 units
for rent.
- Krakatoa Nirwana Resort: An integrated beach resort with 60.2ha of land bank, consisting of resort
hotels, golf course, villas, marina and 2 theme parks.

Impressive 2006 earnings and a whole lot more in 2007. In 2006, ELTY managed to post revenue growth
of 23.0% YoY to Rp393.2bn, hence a jump in operating profit level by 54.8% YoY to RpRp72.2bn. However, 2006
net profit dropped by 27.0% YoY to Rp67.6bn, primarily due to a Rp61.8bn one-time income in 2005. Excluding
the gain, 2005 net profit should only be Rp30.7bn, reflecting 2006 core profit growth of 119.9% YoY. For 2007,
the company expects a huge jump in revenue by 80.5% YoY to Rp709.9bn on the back of their Rp500.0bn sales
backlog recorded as of Dec 06. This will increase 2007 operating profit by 98.8% YoY to Rp143.6bn, hence 2007
INDONESIA

net profit is also expected to grow significantly by 51.0% YoY to Rp102.1bn.

At last ... the rights issue plan finally revealed. To speed up development of their projects, aside from
Rp50.0bn new loan from Bank Bukopin in Feb 07, ELTY is planning its 3rd rights issue of Rp2.8tr at Rp200 per
share in May 07. As a sweetener, warrants will accompany the rights (50:7), with strike price of Rp200 per share.
Post rights issue, ELTY will become the 3rd largest property company with an estimate market cap of Rp4.3tr,
following LPKR (Rp5.9tr) and CTRA (Rp5.4tr); making it more viable in terms of trading size. Learning from the
1998 economic crisis, the company has chosen equity funding over debt, although with 2006 D/E of 0.2x, it's not
difficult to raise external funds. From our assessment, ELTY can only afford Rp306.9bn of new debt, assuming:
interest coverage = 2.0x and loan rate = 14.0%. With that in mind, we believe this is the reason why ELTY
decided for equity fund raising to fund development of its projects.

Valuation is still enticing ... but be patient. The counter trades at 16.6% discount from its post rights issue
NAV of Rp264 per share. The company argues valuation should be much higher, considering latest valuation of its
land bank was conducted in June 2006 with most of it still undeveloped. Despite positive outlook, there's a
possibility of further downward pressure in the short-term on share price towards its theoretical price of
Rp209. ELTY may be interesting in the longer term.

Financial Summary
(Rpbn) FY02 FY03 FY04 FY05 FY06
Stock Data
Issued Shares (m): 5,600.0 Revenue 33 38 174 320 393
Mkt Cap (Rpbn): 1,232 Operating Profit (2) 1 23 47 72
Avg. Daily T/O (m): 55.65 Net Profit* 10 (21) 13 93 68
52-Wk range: Rp265/Rp130 EPS (Rp) 7 (15) 26 61 12
EPS Growth (%) nm nm nm 133.5 (80.2)
P/E (x) 31.3 (14.8) 8.4 3.6 18.2
Stanley Tjiandra Operating Margin (%) (6.2) 1.7 13.1 14.6 18.4
Tel: (6221) 515 2727 Net Margin (%)* 29.6 (54.5) 7.3 28.9 17.2
[email protected] Source : Company Note : *) Excluding extraordinary items
Trimegah Research is also available electronically on : FirstCall.com, Multex and Securities.com
 Flash Notes - Bakrieland Development

NAV Calculation
Description Land bank Market Value Ownership Net MV
(sqm) (Rpbn) (%) (Rpbn)
I. PT Bakrie Swasakti Utama
1. Vacant Land, Jl. H.R. Rasuna Said, Jakarta 147,922 1,508 95.9% 1,445
2. Land & Building on Progress (The 18th Residence) 4,981 112 95.9% 107
3. Wisma Bakrie I 11,478 84 95.9% 80
4. Graha Kapital 3,500 24 95.9% 23
5. Wisma Bakrie II - BOT nm 119 95.9% 114
6. Pasar Festival, GMSB & Klub Rasuna - BTO nm 60 95.9% 58
7. Aston Rasuna Hotel & Residence (230 units) nm 134 95.9% 128
8. Strata Title Apartment Storage (161 units) 20,901 52 95.9% 50
9. Land & Building on Progress (Rasuna Office Park) 6,007 244 95.9% 234
II. PT. Krakatau Lampung Tourism Development
1. Land & Building on Progress (Krakatoa Resort) 601,690 59 90.0% 53
III. PT Samudra Asia Nasional
1. Legian Nirwana Hotel & Suites 23,575 95 99.8% 94
IV. PT Graha Andrasentra Propertindo
1. Bogor Nirwana Residence 384,005 819 99.8% 817
V. PT Bali Nirwana Resort
1. Le Meridien Hotel, Golf Course, Time Share and
Residential Resort 824,692 732 17.8% 130
VI. PT Sanggraha Pelita Sentosa
1. Graha Taman Kebayoran, Bekasi (194 units) 26,295 10 99.3% 10
2. Graha Taman Sukabumi, West Java (278 units) 26,905 5 99.3% 5

Market Value of Assets 3,349

Cash @ Dec 06 45
Cash from rights issue & warrants 3,192
Operating Assets @ Dec 06 184
Operating Liabilities @ Dec 06 (876)
Interest Bearing Liabilities @ Dec 06 (154)
New Loan from Bank Bukopin (50)
Total Net Asset Value 5,690
Total Outstanding Shares (m shares) 21,560
NAV per Share (Rp) 264
Share Price (Rp) 220
Discount (Premium) to NAV 16.6%
Notes :
1. Valuation conducted by Colliers International as of June 2006
2. Graha Kapital was sold in Nov 06 for Rp18.0 - 22.0bn
3. BOT = Build, Operate & Transfer ; BTO = Build, Transfer & Operate
4. Total outstanding shares (m shares) : current shares = 5,600 + rights issue = 14,000 + warrants = 1,960

Source : Company & Trimegah Research

2 PT Trimegah Securities Tbk - 20 March 2007

 Flash Notes - Bakrieland Development

PT Trimegah Securities Tbk

19thFl, Artha Graha Building
Jl. Jend. Sudirman Kav. 52-53
Jakarta 12190, INDONESIA
Tel : (6221) 515 2727 Fax : (6221) 515 4580

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3 PT Trimegah Securities Tbk - 20 March 2007