20250617_ADCP_Laporan Hasil Pemeringkatan_31895895_lamp1.pdf

                                                                                                                                          Rating Rationale



    Financial Highlights
     As of/for the year ended                                 Dec-2024             Dec-2023              Dec-2022         Dec-2021
     Consolidated Figure                                       (Audited)            (Audited)             (Audited)       (Audited)
     Total adjusted assets [IDR bn]                               6,820.0               6,642.1               6,318.7       5,975.7
     Total adjusted debt [IDR bn]                                 1,898.4               1,589.9                790.1         918.6
     Total adjusted equity [IDR bn]                               2,615.9               2,572.5               2,455.7       2,097.3
     Total sales [IDR bn]                                            300.3                652.0                592.7         563.7
     EBITDA [IDR bn]                                                   58.1               137.9                123.7         121.4
     Net income after MI [IDR bn]                                      42.8               116.2                105.0         130.4
     EBITDA margin [%]                                                 19.3                 21.1                20.9          21.5
     Adjusted debt/EBITDA [X]                                          32.7                 11.5                    6.4         7.6
     Adjusted debt/adjusted equity [X]                                  0.7                   0.6                   0.3         0.4
     FFO/adjusted debt [%]                                            (1.8)                   2.6                   3.7         6.1
     EBITDA/IFCCI [X]                                                   0.7                   1.7                   1.5         2.1
     USD exchange rate [IDR/USD]                                   15,416               15,592                14,278        14,278

    FFO = EBITDA – IFCCI + Interest Income – Current Tax Expense
    EBITDA = Operating Profit + Depreciation Expense + Amortization Expense
    IFCCI = Gross Interest Expense + Other Financial Charges + Capitalized Interest; (FX Loss not included)
    MI= Minority Interest                *annualized

    The above ratios have been computed based on information from the company and published accounts. Where applicable, some items have
    been reclassified according to PEFINDO’s definitions.




 Key Strengths for the Guaranteed Bonds

 A full, unconditional,                   ADCP’s bonds (Bond III Serie A & B, amounted IDR499.9 billion) are guaranteed by a corporate guarantee from CGIF that is
 and irrevocable                          unconditional and irrevocable, covering both the principal and interest payments in full, including potential payment default.
 guarantee from CGIF                      Referring to the guaranteed agreement, the guarantee is a continuing guarantee and will extend to the ultimate balance of
                                          all guaranteed amounts payable by ADCP, regardless of any intermediate payment or discharge in whole or in part. Under
                                          such conditions, we view that the instrument rating should reflect CGIF’s credit profile as the guarantor.

 CGIF’s superior                          We are of the view that CGIF has superior financial strength, supported by strong support from its shareholders and an
 financial strength                       important mandate to develop regional bond markets. CGIF shareholders (contributors) fully support CGIF by regularly
                                          providing capital injections, reflecting its sizeable total equity amount of USD1.3 billion as of Mar 31, 2024. We view that its
                                          services are essential to the development of the ASEAN bond markets by helping credible bond issuers tap into regional
                                          bond markets, including cross-border issuances in other ASEAN nations apart from the issuer’s home country. CGIF also
                                          possesses superior capitalization profile, a very strong liquidity position, and conservative underwriting criteria, despite
                                          constrained by moderate operating performance. Based on the above considerations, we are of the view that CGIF has the
                                          capability and willingness to fulfill its claim obligations should the issuer fail to make the timely coupon or principal payment.



 Key Strengths for the Corporate Rating

 Strategic importance                     ADCP is viewed as a strategically important subsidiary of ADHI, given its closely integrated business line, with ADCP focusing
 to ADHI                                  on developing properties under a TOD concept within the proximity of LRT stations developed by ADHI. The Parent’s
                                          commitment in supporting ADCP is reflected by its unwavering support during the construction progress for the
                                          corresponding project. Furthermore, we view the sharing of ADHI’s brand name as evidence of its willingness to risk its
                                          reputation for its subsidiary. Given the Company’s integral role in the group’s overall strategy, majority ownership, and strong
                                          management ties, we believe that ADCP will remain a key subsidiary of ADHI in the medium term.

 Captive market from                      We are of the view that the TOD concept will shift commuters’ behavior in purchasing property over the near to medium
 LRT commuters                            term, given its proximity to LRT stations, allowing them to avoid traffic congestion and reduce travel time. Commencing
                                          operation in August 2023, LRT is projected to reach 900,000 passengers daily, by serving dense urban and heavy traffic areas.
                                          Therefore, the LRT is expected to promote the market value of ADCP’s properties, leading to a higher take-up rate in the
                                          future. ADCP gains a competitive advantage in capturing this potential market from LRT commuters over other developers
                                          targeting the same segment, backed by its synergy with ADHI as the contractor for LRT projects. As of 2024, the LRT network
                                          comprises 18 operational stations, with eight situated in direct proximity to ADCP’s property developments.


http://www.pefindo.com                                                                                        2/4                                                June 2025

                                                                                                                Rating Rationale


 Good asset quality            We view ADCP’s asset quality as good, underpinned by its strategically located projects, with easy access to toll roads, LRT,
                               bus rapid transit (BRT) stops, and commuter line stations in high-density areas. In addition to the already built TOD projects,
                               Royal Sentul Park and Adhi City Sentul are two of ADCP’s signature projects located along the Jagorawi toll road in Sentul,
                               surrounded by the Sentul Industrial Estate. With the first phase of construction completed, Adhi City is planned to be the first
                               superblock in Sentul, covering more than 100 ha of land bank, designed to be built in phases up to 2033. ADCP’s projects for
                               its low to middle-income segment, Cisauk Point and Oase Park, are strategically located near the Cisauk commuter line station
                               and Ciputat Transjakarta pool, respectively, with the former being close to the mature BSD City. ADCP is also developing
                               several projects located in prime areas in East Bekasi, Ciputat, and Bogor.



 Key Weaknesses for the Corporate Rating

 Aggressive capital            We expect ADCP’s capital structure to remain aggressive amid its heavy reliance on debt to finance its working capital for the
 structure and weak            development of its vertical residential projects after previously being supported by shareholder loans and equity injection
 cash flow protection          from ADHI. The Company’s constrained liquidity profile is further evidenced by the two years maturity extension of its Bond
 measures                      II/2022 Series B of IDR102 billion, initially maturing on May 24, 2025. We expect the Company’s debt to EBITDA to remain
                               elevated, averaging around 60x in 2025-2027. In line with its high leverage, we also anticipate the Company’s cash flow
                               protection measures to remain weak, with interest coverage averaging less than 2x over the same forecasted period.

 Limited recurring             We view that ADCP will remain exposed to the highly cyclical property development market as ADCP’s earnings will remain
 income                        highly dependent on the sale of vertical residential developments, while the contribution from recurring income will remain
                               limited. We expect recurring profits in 2025-2026 to remain insignificant compared to its financing expenses, given ADCP’s
                               plans to operate several hotels under the Stay G and GranDhika brands and monetize commercial areas around the LRT
                               stations are not expected to raise the recurring income substantially.

 Sensitivity to changes        Property sales are vulnerable to adverse changes in the economy. Unfavorable economic conditions caused by the intensifying
 in macroeconomic              geopolitical conditions, as well as weaker disposable income owing to higher inflation and interest rates, will dampen demand
 conditions                    for property, particularly the segment ADCP serves, as most of the presales are funded by mortgages. We also note that
                               ADCP’s projects are mainly concentrated in the high-rise segment, which provides it with less flexibility to scale back
                               construction expenditures in the event of weaker presales, thus exposing it to higher debt utilization for cost-to-complete or
                               a delay in construction progress. As buyers from this segment tend to purchase once the property is available, construction
                               delays will impair ADCP’s marketing ability and consequently aggravate its revenue generation.



 Environmental, Social and Governance (ESG) Factors in the Rating Assessment

 ESG factors are largely a neutral consideration in our credit rating analysis of ADCP. We believe that ADCP is more exposed to social risk, particularly the
 relationship between ADCP and its customers. As ADCP’s property products are marketed towards the middle-income segment, their high dependency on
 mortgage financing amid a high-interest rate environment may expose ADCP’s presales and profitability to a greater degree, which may impact its revenue
 and cash flow targets.




http://www.pefindo.com                                                        3/4                                                                   June 2025

                                                                                                                           Rating Rationale




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http://www.pefindo.com                                                                 4/4                                                                         June 2025