Results Review:
Bumi Serpong Damai (BSDE IJ, BUY, TP: IDR2,650),
Gearing Up For a Better Future
Bumi Serpong Damai (BSDE IJ, BUY, TP: IDR2,650),
Gearing Up For a Better Future
We are positive on
BSD’s strategic tie-up with Mitsubishi as it should bring value-add to its
estate. Potential commercial land sales from this transaction should enable it
to achieve its IDR6.9trn FY16 presales target while maintaining the firm’s
healthy balance sheet. We fine-tune our numbers and carry forward the revenue
booking to FY17, suggesting a 20% YoY earnings growth. Maintain BUY and
IDR2,650TP (22% upside).
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Unlocking
value through partnership. Bumi Serpong Damai (BSD) has just announced a strategic
tie-up with Mitsubishi Corp develop residential properties on 19ha of land in
Serpong at Bumi Serpong Damai City (BSD City) Phase 2. We are positive on this
as it ought to bring value-add to the estate, accelerate revenue growth and
mitigate risks. Further information on this tie-up has yet to be disclosed, but
BSD is to have a minority stake in the partnership.
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Cautiously
optimistic.BSD
booked YTD presales of IDR4.5trn or 65% of FY16 presales target of IDR6.9trn.
~IDR540bn was contributed by its Price Amnesty marketing programme that
was launched on 11 Oct. In addition, the company still has projects in the
pipeline that are ready for launch. These include two condominiums in Jakarta –
ie Southgate Residence (South Jakarta) and Aerium (West Jakarta) – and two shophouses
and four residential developments in BSD City. All these, plus contributions
from commercial land sales to the joint-venture (JV) with Mitsubishi, should
enable BSD to achieve its full-year presales target.
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3Q16earnings: below the line
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Maintain
BUY and IDR2,650 TP. FY16F earnings are likely to continue to be under
pressure due to a slower booking pattern from presales into accounting revenue.
Amidst that, BSD has advised that FY16 revenue should be closed at IDR6trn. We
fine-tune our forecast and carry forward the revenue booking to FY17F, suggesting
a 20% YoY earnings growth. A potential catalyst would be another possible
commercial land sale that is likely to happen in FY17. Key risks to our call
include lower-than-expected presales and delays in construction projects.
Kindly click the following link for the full report: Bumi Serpong Damai : Gearing Up For a Better Future
Best regards,
Lydia Suwandi
Vice President
Research Analyst - Property
PT. RHB Securities
Indonesia
