High project concentration. Execution risk associated with rapid expansion. Established industrial estate developer in eastern Jakarta. Stable recurring income from infrastructure services. Moderately high leverage due to high capital spending. Volatile cash flows from cyclical property development segment. Adequate liquidity. The negative outlook reflects our view that PT Kawasan Industri Jababeka Tbk. (KIJA) may not reduce capital spending in the next 18 months, at a time when we believe earnings could remain under pressure. We may lower the rating on KIJA if the company's debt-to-EBITDA ratio fails to recover towards about 3.5x by year-end 2018. This could materialize if the company does not prove disciplined in terms of capital expenditure, or if revenue does not recover in 2018. We estimate
