Jun 1, 2010

CLSA raises BSDE's profit forecast

CLSA Asia-Pacific Markets in a research report  published on May 31 2010 said that the brokerage has raised profit forecasts of PT Bumi Serpong Damai Tbk (BSDE) by 11% and 19% to Rp366 billion and Rp474 billion in 2010 and 2011 respectively. The new numbers are based on higher margin assumption and lower revenue assumption as explained in previous sections. 
"Hence, we expect revenue to grow by 16%-25% YoY in 2010 and 2011, with net profit up by 19% YoY in 2010 to Rp366 billion and 29% YoY in 2011 to Rp474 billion," said CLSA's analyst Sarina Lesmina said in her report.
According to the report, CLSA estimates BSDE's bet asset value (NAV) per share at Rp1,572/share. "We raised our NAV/share by 5% from Rp1,495/share previously, mostly to reflect higher cash position of the company. In June 2009, Colliers estimated BSDE’s NAV per share at Rp1,665/share," Sarina said.
The new target price for BSDE is Rp1,100/share,from Rp1,000/share previously, representing 66% upside and 58% discount to NAV and maintain BUY. CLSA believes the company will continue to benefit from
the growth prospect of residential in the Greater Jakarta area.
Bumi Serpong aims to finish their phase 2 development of 2,000ha by 2020 since first launched in 2008. An initial 850 ha is planned to be completed by 2013. Hence, the company targets to finish phase 2 faster than their phase 1 project of 1,500 ha which took 18 years to complete since 1989. There are still some pockets of lands in phase 1 which is in final stage of completion.
Bumi Serpong has a permit over 5,950ha in Serpong, West Greater Jakarta. Besides residential developments, phase 2 will include commercial properties to add demand for its residential properties such as educational town, shopping mall, and Office Park.
BSDE allocates 50ha for its Edu Town, targeting 5 universities to set up location there. Swiss German University just opened recently this year and Prasetya Mulya Business School to open end of this year as well.
Also, for 2010, BSDE will spend Rp50 billion to start developing their corporate office in the Office Park which is part of the 125 ha commercial land allocated. The property developer also targets to have minimum 10% of recurring revenue by end of phase 2 and 30% by end of phase 3, from none currently.
"We expect marketing sales to reach Rp1.9 trillion in FY10, a 40% YoY increase from FY09 at Rp1.32 trillion. Soft property market had caused sales to dip 19% YoY in FY09 despite a recovery in the second half. First quarter 2010's sales reached Rp545 billion (up 69% YoY, 32% QoQ); if annualized will reach Rp2.1 trillion. The company has targeted Rp2 trillion for FY10," she said.
Unofficial sales data for 4M10 was Rp750 billion. CLSA expects sales to grow by 20% in 2011. In FY09, 66% of the marketing sales were housing units, while the remaining was shop houses, commercial land-lots and industrial units.
Hence, BSDE is expected a revenue growth by 16% and 25% YoY in 2010 and 2011 respectively (note that our revenue numbers are reduced from previous forecasts by 12% due to lower marketing sales in FY09 than expected). "We estimate revenue to reach Rp1.5 trillion in 2010 and Rp1.8 trillion in 2011."

No comments: