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Danareksa Equity Snapshot - BSDE 8 Juni 2018
June 08, 2018 09:24

Bumi Serpong Damai(BSDE IJ)

Right on Track


We believe that BSDE will record indicative marketing sales of ~Rp3.5tn in1H18, largely in-line. In 2H18, themarketing sales will mostly come from residential launchings and potentially Rp1.8tn of land plot sales. We like BSDE for its huge landbank, providing operational flexibility & sustainability, and good stock liquidity. Maintain BUY with a lower TP of Rp1,930.


1H18 marketing sales should be in-line. We expect BSDE’s 1H18 marketing sales to be in-line with its FY18 target of Rp7.2tn, underpinned by the strong 1Q18 marketing sales  of Rp2.5tn. For 2Q18, the company has provided guidance for marketing sales of Rp1.0tn, primarily from the sale of existing products (high-rise: Klaska, Southgate and Casa De Parco) and residential property, culminating in expected 1H18 marketing sales of ~Rp3.5tn (49% of the FY18 target). In 2Q18, BSDE only launched the cluster Zeva @ The Savia on 3 Jun 18. According to our checks, from a total of 82 units on sale (with prices ranging from Rp1.4-1.6bn/unit), 52 units have been sold (63% take-up rate), implying marketing sales of around Rp73bn.


The 2H18 marketing sales will mostly come from land plot and residential sales. In 2H18, we expect more land plot sales and residential launchings to contribute towards the 2H18 marketing sales. The company indicated  another Rp1.8tn of land plot marketing sales in 2Q18 and 2H18. Land plot sales typically range from between 0.3-17Ha, but BSDE will focus on selling smaller plots. The remaining portion of marketing sales will come from new residential launchings in BSD City and from existing high-rise projects.


FY18 revenuesguidance of Rp8.4tn; boosting its recurring income. For FY18, BSDE has provided guidance for revenues of Rp8.4tn vs. ours Rp7.9tn (FY17 revenues reached Rp10.3tn). The lower expected FY18 revenues reflects the expectation of lower revenues recognition from land plot sales in FY18. Land plot sales revenues reached 44% of BSDE’s FY17 revenues of Rp10.3tn. Overall, we expect the development revenues to fall by 29% YoY to Rp6.3tn, with the recurring income to grow by 13%YoY to Rp1.6tn, mainly bolstered by: 4% higher rental rates, the higher occupancy of BSDE office towers and additional revenues streams (~Rp130bn) from the newly acquired MSIG and Bakrie office Towers. As of Mar 18, BSDE’s net gearing was 21.5%.


Maintain BUY with a lower TPofRp1,930. We maintain our BUY call on BSDE with a lower TP of Rp1,930 (reduced from Rp2,000), based on a higher discount to NAV of 69% (from 68%) to account for higher interest rates. BSDE currently trades at a 73% discount to NAV vs. the sector’s 70%. We like BSDE for its huge landbank, providing operational flexibility and long-term sustainability, as well as its good stock liquidity. BSDE has total landbank of 4,740 Ha as of Dec 17.



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