Become a new occupant of the LQ45 Index, refer to the Summarecon Agung (SMRA) stock recommendations

Reporter: Akhmad Suryahadi | Editor: I knew Laoli

KONTAN.CO.ID – JAKARTA. The Indonesia Stock Exchange (BEI) announced a major evaluation to determine the list of shares and weight adjustments for shares used in the LQ45 Index.

The calculation is valid from August 2020 to January 2021.

Quoting the announcement on the Indonesia Stock Exchange (IDX) page, Friday (24/7), there are three new shares included in the LQ45 range, one of which is PT Summarecon Agung Tbk (SMRA).

Also Read: Summarecon Agung (SMRA) managed to sell 101 shophouses at the first online launch

Sucor Sekuritas analyst Joey Faustian assessed that the inclusion of SMRA shares in LQ45, which is an index containing 45 liquidated shares, would be a positive sentiment for SMRA.

“But for preferences in the property sector, I am more inclined to its peers who have lower net gearing levels,” Joey told Kontan.co.id, Sunday (26/7).

Joey explained, SMRA is no longer a top pick (top pick) of Sucor Sekuritas in the property and residential sector because of the high level of net gearing. Joey said, currently the level of SMRA net gearing is the highest compared to other property issuers, reaching 0.77 times. In fact, the SMRA net gearing is higher than the industrial net gearing which is only 0.35 times.

Also Read: Check out the complete list of issuers in the LQ45 index for the period August 2020-January 2021

In addition, SMRA has fewer product portfolios with prices below Rp 2 billion per unit. However, the plus value of this issuer is due to its high exposure to end users (80%) and landed house projects (77%).

Joey maintained the buy recommendation for SMRA shares with a target price of Rp 1,000, down from the previous target price of Rp 1,300. Friday (24/7), SMRA shares closed down 2.48% to the level of Rp 590.