Growth catalyst from IDR 600bn rights to acquire prime land assets in Bali. BUVA, a leading Indonesian developer of eco-friendly hotels and resorts, is streghtening its recurring income business over the next five years on the back of (1) IDR 416bn development synergies with its flagship Alila Villas Uluwatu, (2) IDR 184bn land purchase in Pecatu, Bali and (3) Labuan Bajo hotel expansion. To fund these projects, BUVA conducted IDR 600bn rights issue, of which IDR 416bn was utilized for the 99.99% acquisition of PT Bukit Permai Properti (BPP) in November 2025. This is strategically important, as BPP owns 19.3 ha landbank in Uluwatu, located near BUVA’s flagship Alila Villas Uluwatu, enabling development synergies. Notably, Alila Villas Uluwatu was BUVA’s largest 2024 revenue contributor (65%), supported by its prime location and high ASP of >IDR 10mn/night. Given that BPP’s land area is three times larger than Alila’s, future developments are likely to command premium pricing, further reinforcing BUVA’s medium-term growth prospects. Additionally, in January 2024, BUVA, through its subsidiary Bukit Savanna Raya, purchased IDR 112bn land (2.7ha) in Labuan Bajo, West Nusa Tenggara and on this site is building 126-room hotel, expected to potentially boost pre-tax income by 16.8% in 2026 and 17.3% in 2027.

Recent rights issuance boosts potential MSCI Small Cap inclusion in 1H26. MSCI will announce its next index review on 10 February 2026, with changes effective 2 March 2026. Our assessment suggests that BUVA has a credible chance of being included as a member of MSCI Small Cap, supported by its recent price rally (+176% since November), partially fueled by its rights issue, which increased BUVA’s adj. free-float market cap to USD 543mn, above the USD 330mn inclusion threshold. Furthermore, its 12M ADTV has risen to USD 6.1mn/day, exceeding the USD 1.0mn/day minimum requirement for MSCI eligibility. Inclusion in MSCI would enhance BUVA’s visibility among global investors and attract passive inflows from index-tracking funds, especially as global monetary conditions shift toward broader easing cycle.

Spec-Buy with IDR 3,000 TP on further market-cap re-rating. Beyond its expansion initiatives, BUVA is poised to benefit from Bali’s rapidly recovering tourism sector, projected to grow at +8.3% CAGR in 2025–30F. Coupled with its potential MSCI inclusion, BUVA represents a solid investment case. In terms of rating, BUVA is a Spec-BUY with IDR 3,000 TP (+63% upside), implying 33.7x P/B. Key risks: 1) weaker-than-expected purchasing power, 2) lower-than-expected tourist arrivals, and 3) project execution delays.