Company
Update:
Bumi Serpong Damai (BSDE IJ, BUY, TP: IDR2,650)
Maintains a Solid Performance
Bumi Serpong Damai (BSDE IJ, BUY, TP: IDR2,650)
Maintains a Solid Performance
We
have mentioned in the past about our belief that 2017 is the year to be
positive on the real estate sector. As the Top Pick in the sector, BSD posted
strong 1Q17 results and marketing sales; we believe the company will be able to
maintain its solid performance in the coming quarters. Maintain BUY with TP of
IDR2,650 (47% upside), which implies a 50% discount to RNAV.
¨
Strong
1Q17 results
since Bumi Serpong Damai (BSD) posted a 59% YoY increase in revenue to
IDR1,754bn as the company was able to recognize a higher residential and
commercial marketing sales backlog into accounting revenue. The 1Q17 revenue
accounted for 25%/23% from our/consensus estimates, in-line with its average
seasonal trend (Figure 3). This revenue growth combined with non-operating
income resulted in a significant 183% YoY growth in net profit, which was
equivalent to 29%/29% from our/consensus full year estimates and above its
average seasonal trend of 25% (Figure 4).
During 1Q17, residential sales increased by
203% YoY to IDR1.1trn and contributed 63% of total revenue. However in terms of
gross margin, 1Q17 land sales booked the largest contribution at 71% while
residential margin was 64% and commercial at 53%. Overall, gross margin was
down by 762bps due to higher cost of goods sold (COGS) on houses and strata
title buildings.
¨
Balance
sheet remains healthy.
In 1Q17 BSD’s cash balance increased to IDR4.5trn as a result of additional
debt where mostly would be used for working capital. Nonetheless, the company
managed to maintain a healthy balance sheet where he 1Q17 debt to equity ratio
was booked at 30%, ie well below the bond covenant of 200%. On 17 May, BSD
issued a 5.50% USD70m senior notes that would be due in 2023 and the proceeds
are to be used for working capital and funding investment properties. Post the
notes issuance, we estimate the company would still be able to maintain a
healthy book with interest coverage ratio at above 5x.
¨
Confidence
still intact.
We maintain our view that 2017 would be a more positive year for the sector as
well as for BSD. Our view is supported by BSD’s strong 1Q17 results and
marketing sales that were booked at IDR1,595bn (+33% YoY) achieving 22% from
this year’s target of IDR7,225bn. Improvements on the company’s financials can
also be seen on the yearly growth on revenue and net profit since 1Q16 (as seen
on Figure 2). On 11 June 2017, the company plans to launch a new landed house
sub-cluster called “Avezza” as part of Mozia cluster. The houses will have an
area size ranging from 60-105sqm/unit with ASP ranges from IDR1.34 - 2.2bn per
unit or IDR18.3 - 21mn per sqm.
¨ We maintain our BUY call on the back of a 25% CAGR net profit growth forecast from FY16-19F as well as expectationS on sector improvements starting from this year. Currently, the counter is trading at 13x 2017F P/E and a 66% discount to RNAV.
Kindly click the following link for the full report: Bumi Serpong Damai : Maintains a Solid Performance
Best regards,
¨ We maintain our BUY call on the back of a 25% CAGR net profit growth forecast from FY16-19F as well as expectationS on sector improvements starting from this year. Currently, the counter is trading at 13x 2017F P/E and a 66% discount to RNAV.
Kindly click the following link for the full report: Bumi Serpong Damai : Maintains a Solid Performance
Best regards,
Yualdo Tirtakencana
Yudoprawiro
Assistant Vice
President
Research Analyst –
Property
PT RHB Sekuritas
Indonesia
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