Nusa Raya Cipta Rising High on Infrastructure Entry

Company Profile
Nusa Raya Cipta engages in commercial, residential, industrial and civil construction works. It was first listed on the Indonesian Stock Exchange in June 2013. NRCA is a subsidiary of industrial property developer PT Surya Semesta Internusa Tbk (SSIA, BUY, TP IDR1,470).

Highlights
NRCA at a glance
NRCA is one of the leading private high-rise construction specialists in Indonesia, having built some of the most high profile luxury projects in Indonesia, including the Bulgari Resort, Banyan Tree, The Mulia, and Ayana (previously Ritz-Carlton) in Bali, as well as Jakarta’s Ciputra World Complex. NRCA’s repeat customers include Indonesia’s most reputable property developers including the Ciputra Group (CTRA, CTRP), Alam Sutera Group (ASRI), and Agung Podomoro Group (APLN).

The Saratoga connection and entry into infrastructure development
SSIA locked a deal with influential private equity group Saratoga Capital to swap 7.0% of SSIA’s pre-IPO stake at NRCA with 14% of Saratoga’s ownership at PT Bhaskara Utama Sedaya, holder of 45% stake at PT Lintas Marga Sedaya (LMS) – concession holder of the Cikampek-Palimanan toll road. Upon completion of the swap, SSIA owns 27% effective shares at LMS, with Saratoga owning 18% and Pluss Expressway Bhd owning the remaining 55%.

In effect, NRCA has been mandated as the main contractor at Cikampek-Palimanan, directly constructing the IDR1trn Section 5 of the project. The project is expected to contribute ~IDR49bn to NRCA’s JO profits, pushing its revenue from IDR91.9bn in FY12 to IDR151.3bn in FY13E. The project also marks NRCA’s serious entry into infrastructure construction, after a low profile coal jetty construction in East Kalimantan (note: Saratoga’s ADRO mines are located in South Kalimantan).

High-rising growth
NRCA’s share price shot up by 50% within two days of its listing, but we think there is still a looming upside potential as we look into FY14. Over the past two years, NRCA has booked strong 30%-55% revenue growth and 25%-40% bottomline growth. We expect the company to book 41.8% net profit CAGR over the next two years as a result of its entry into the infrastructure constructions.