14 February 2018

Bumi Serpong Damai (BSDE IJ)

Company Update
BUY (Unchanged)

Stock Data Solid marketing sales achievement

Target price (Rp) Rp2,400
Marketing sales growing grew by 16% in FY17 in line with guidance.
Prior TP (Rp) Rp2,400
Shareprice (Rp) Rp1,785 Management is guiding for flat marketing sales in FY18.
Upside/downside (%) +34.5 Target recurring income of 20-25% in the next 5 years.
Equity | Indonesia | Property

Sharesoutstanding (m) 19,246 Maintain Buy with unchanged TP of Rp2,400.

Marketcap. (US$ m) 2,517
Free float (%) 38.9 FY17 marketing sales accounts for 104/100% of our/company’s target.
Avg. 6m dailyT/O (US$ m) 1.9 BSDE booked marketing sales of Rp7.2tn (+16% yoy) in FY17, which is came in
line with our/company’s forecast. The marketing sales were mainly supported by
Price Performance BSD commercial land plot sales of Rp1.6tn and Rp1.4tn to local conglomerate and
3M 6M 12M China Fortune Development, respectively. Commercial sales accounts for 50% of
Absolute (%) 6.9 -1.7 -5.6 FY17 total marketing sales, while residential sales and JV sales accounts for 39%
and 12%, respectively. Residential sales in BSD City contribute for 18% of FY17
Relative to JCI (%) -1.8 -13.3 -28.3
marketing sales, which was 40% below internal target and showing negative
52w high/low (Rp) 1,910 - 1,560
growth of 48% yoy. BSDE alleged that most of the residential sales are still
130
dominated by houses and apartment below Rp2bn.
125
120
115 Expect flat FY18 marketing sales, with 22% achievement as of mid Feb.
110 BSDE targets flat marketing sales of Rp7.2tn in FY18, however they are expecting
105
100 higher contribution from the residential sales of 51% (FY17: 39%). BSDE is
95
90 targeting marketing sales of Rp1.9tn (+43% yoy) from BSD City in FY18 as the
85 company is still confident with BSD city’s growth which is still enjoying high
80
growth in ASP (±20% yoy) supported by infrastructure development in the area,
Oct-17
Oct-17
Mar-17
Mar-17

May-17
May-17
Jun-17
Jul-17
Jul-17

Jan-18
Apr-17

Aug-17
Sep-17

Nov-17
Dec-17
Dec-17
Feb-17

Feb-18

mostly Serpong-Balaraja toll road. As of mid February, BSDE has booked

BSDE-Rebase JCI Index-Rebase
marketing sales of Rp1.6tn, cumulating to 22% of FY18 target. There are several
Major Shareholders notable sales in early 2018, which came from commercial lot sales of Rp600bn,
Paraga Arta Mida 26.6% Klaska Residence of Rp400bn and Jedi Cluster of Rp280bn.

Ekacentra Usahamaju 25.0%

To increase recurring income portion to 20-25% (FY17: 18%). As the
Public 38.9% company experienced slow sales during sluggish property condition in 2014-2017,
Estimate Change; Vs. Consensus BSDE plans to increase their recurring income portion in the next 5 years. In
2017 2018 2017, company managed to acquire two investment properties, namely Sinarmas
Latest EPS (Rp) 148.8 155.3 MSIG Tower (68k NLA) and Bakrie Tower (17k NLA). Sinarmas MSIG Tower and
Bakrie tower currently has 40% and 23% occupancy rates, representing total
Vs. Prior EPS (%) 0.0 0.0
yield of 4.2%. We forecast both building will have occupancy rate of 80% by 2019
Vs. Consensus (%) (2.7) 3.9
which represent yield of 7.6% These investment properties will help expand
Source: Bloomberg BSDE’s ROE to 8.7% in FY19 (vs. prior investment 8.5%).

Maintain Buy on BSDE with TP of Rp2,400. We continue to like BSDE due to

its resilient marketing sales in FY18. Despite sluggish property condition, BSDE
managed to book 16% growth in marketing sales (peers: 13%). We maintain our
Buy call on BSDE with TP of Rp2,400. BSDE is currently trades at 66% discount to
our estimate RNAV or 11.5x FY18F PE.

Year To 31 Dec 2015A 2016A 2017F 2018F 2019F

Revenue (RpBn) 6,210 6,522 8,094 8,452 8,737
EBITDA (RpBn) 3,018 2,965 3,880 4,046 4,205
EBITDA Growth (%) 10.9 (1.7) 30.8 4.3 3.9
Net Profit (RpBn) 2,139 1,796 2,865 2,988 3,027
EPS (Rp) 111 93 149 155 157
EPS Growth (%) (44.0) (16.0) 59.5 4.3 1.3
Net Gearing (%) 8.2 16.1 4.2 1.0 (0.7)
PER (x) 16.1 19.1 12.0 11.5 11.3
Joey Faustian PBV (x) 1.6 1.4 1.2 1.0 0.9
PT Indo Premier Sekuritas Dividend Yield (%) 0.3 0.8 0.5 1.7 1.7
joey.faustian@ipc.co.id EV/EBITDA (x) 12.0 13.0 9.2 8.6 8.1
+62 21 5793 1168 Source: BSDE, IndoPremier Share Price Closing as of : 13-February-2018

Refer to Important disclosures in the last page of this report

BSDE Company Update

Fig. 1: Marketing Sales trend 2013-2018F Fig. 2: Revenue Breakdown 2014-2019F

(Rp bn) Recurring income Property sales

7,600 100%
7,354 18% 18% 19% 17%
7,400 90% 20% 22%
7,225 7,200
7,200 80%

7,000 70%
6,758
6,800 60%

6,600 6,507 50%

6,400 40% 82% 82% 81% 83% 80% 78%

6,252
6,200 30%

6,000 20%

5,800 10%

5,600 0%
2013A 2014A 2015A 2016A 2017A 2018F 2014A 2015A 2016A 2017A 2018F 2019F

Source: Company, IndoPremier Source: Company, IndoPremier

Fig. 3: Gross Profit trend 2014-2019F Fig. 4: Operating Profit trend 2014-2019F

Operating profit Operating margin

Gross profit Gross margin

(Rp bn) (Rp bn)

7,000 74.7% 75% 4,500 47.5% 48.0%

74.2%
75% 4,000 46.7%
6,000 47.0%
73.5% 74% 46.1% 46.1%
3,500 45.9%
5,000 73.1% 74% 46.0%
72.9% 3,000
73%
4,000 2,500 45.0%
73%
3,000 71.8% 2,000 43.5% 44.0%
72%
1,500
2,000 72% 43.0%
71% 1,000
1,000 42.0%
71% 500

- 70% - 41.0%
2014A 2015A 2016A 2017F 2018F 2019F 2014A 2015A 2016A 2017F 2018F 2019F

Source: Company, IndoPremier Source: Company, IndoPremier

Fig. 5: Net Profit trend 2014-2019F Fig. 6: Quarterly Marketing Sales growth 1Q12-4Q17

Net profit Net margin

(Rp bn)
41%

4,500 80.0%
35% 34%
68.0% 34%
4,000 33%
70.0% 32% 32%
31%
3,500 29% 28%
60.0% 27%
3,000 24% 24%
50.0% 22%
22% 21%
2,500 19%
34.5% 35.4% 35.4% 34.6% 40.0%
19%
17%
2,000 27.5% 14% 18%
30.0%
1,500 12%
13%
20.0%
1,000 7%

500 10.0%

- 0.0%
1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17
2014A 2015A 2016A 2017F 2018F 2019F

Source: Company, IndoPremier Source: Company, IndoPremier

Refer to Important disclosures in the last page of this report 2

BSDE Company Update

Year To 31 Dec (RpBn) 2015A 2016A 2017F 2018F 2019F

Income Statement

Net Revenue 6,210 6,522 8,094 8,452 8,737

Cost of Sales (1,572) (1,840) (2,195) (2,276) (2,312)
Gross Profit 4,638 4,681 5,900 6,176 6,425
SG&A Expenses (1,737) (1,846) (2,165) (2,297) (2,400)
Operating Profit 2,901 2,835 3,734 3,879 4,025
Net Interest (324) (390) (387) (109) (154)
Forex Gain (Loss) 139 (116) 0 0 0
Others-Net 0 96 307 52 51
Pre-Tax Income 2,715 2,425 3,655 3,822 3,922
Income Tax (364) (387) (405) (433) (488)
Minorities (212) (241) (385) (402) (407)
Net Income 2,139 1,796 2,865 2,988 3,027

Balance Sheet

Cash & Equivalent 6,793 4,181 7,383 6,405 7,486

Receivable 168 422 524 547 565

Inventory 6,548 7,441 6,985 7,398 7,483

Other Current Assets 4,179 5,240 6,408 6,272 6,705

Total Current Assets 17,688 17,284 21,299 20,621 22,240

Fixed Assets - Net 12,675 14,900 17,255 20,572 23,865

Goodwill 9 9 9 9 9

Non Current Assets 5,650 6,098 6,098 6,098 6,098

Total Assets 36,022 38,292 44,662 47,300 52,211

ST Loans 1,897 377 377 377 1,377

Payable 317 261 0 215 212

Other Payables 4,050 4,454 6,750 7,050 7,290

Current Portion of LT Loans 158 577 1,783 469 1,093

Total Current Liab. 6,422 5,669 9,133 8,111 9,971

Long Term Loans 5,869 6,527 5,879 5,410 4,317

Other LT Liab. 1,634 1,576 937 959 977

Total Liabilities 13,925 13,772 15,949 14,480 15,265

Equity 8,122 8,168 8,168 8,168 8,168

Retained Earnings 10,728 12,412 15,097 17,513 19,942

Minority Interest 3,247 3,772 5,447 7,139 8,836

Total SHE + Minority Int. 22,097 24,353 28,713 32,820 36,946

Total Liabilities & Equity 36,022 38,125 44,662 47,300 52,211

Source: BSDE, IndoPremier

Refer to Important disclosures in the last page of this report 3

BSDE Company Update

Year to 31 Dec 2015A 2016A 2017F 2018F 2019F

Cash Flow

Net Income (Excl.Extraordinary&Min.Int) 2,351 2,038 3,250 3,390 3,434

Depr. & Amortization 196 225 286 319 355

Changes in Working Capital (2,503) (1,777) 1,540 (68) (270)

Others 121 85 (183) (326) (181)

Cash Flow From Operating 165 571 4,892 3,315 3,338

Capital Expenditure (6,924) (2,899) (2,640) (3,635) (3,648)

Others 5,068 293 320 405 400

Cash Flow From Investing (1,856) (2,605) (2,320) (3,231) (3,249)

Loans 3,618 (445) 558 (1,783) 531

Equity 1,771 12 0 0 0

Dividends (94) (289) (180) (573) (598)

Others (197) (160) 393 1,256 1,212

Cash Flow From Financing 5,098 (881) 772 (1,099) 1,146

Changes in Cash 3,406 (2,916) 3,344 (1,015) 1,235

Financial Ratios

Gross Margin (%) 74.7 71.8 72.9 73.1 73.5

Operating Margin (%) 46.7 43.5 46.1 45.9 46.1

Pre-Tax Margin (%) 43.7 37.2 45.1 45.2 44.9

Net Margin (%) 34.5 27.5 35.4 35.4 34.6

ROA (%) 6.7 4.8 6.9 6.5 6.1

ROE (%) 10.5 7.7 10.8 9.7 8.7

ROIC (%) 10.3 7.4 10.5 10.5 10.1

Acct. Receivables TO (days) 9.0 16.5 21.3 23.1 23.2

Acct. Receivables - Other TO (days) 0.0 0.0 0.0 0.0 0.0

Inventory TO (days) 0.3 0.3 0.3 0.3 0.3

Payable TO (days) 55.1 57.3 40.2 35.1 33.7

Acct. Payables - Other TO (days) 0.0 0.0 0.0 0.0 0.0

Debt to Equity (%) 35.9 30.7 28.0 19.1 18.4

Interest Coverage Ratio (x) 0.2 0.2 0.2 0.1 0.1

Net Gearing (%) 8.2 16.1 4.2 1.0 (0.7)

Source: BSDE, IndoPremier

Refer to Important disclosures in the last page of this report 4

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analysts personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty nor accept any
responsibility or liability as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for
general circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, financial situation and the
particular needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or
sell any securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this
report.