BSDE - 1H24 Earnings Highly Above Our and Consensus Expectation

KBVS Update
Friday, 30 Aug 2024

BSDE- 1H24 Earnings Highly Above Our and Consensus Expectation
(BUY; TP: IDR:1,585)

Booked IDR896 bn in net profit for 2Q24, (+182.6% yoy) but down 37.6% qoq. The strong net profit growth in yoy basis was primarily due to an 89% increase in real estate revenue, driven by higher product hand-over. This resulted in BSDE reported a net profit of IDR2.3 tn (+94.2% yoy).

Earnings are expected to reach IDR3.4 tn (+76.3% yoy) in 2024, driven by ~IDR900 bn from JV-land plot sales and increased 2H24 handovers. However, short-term contract liabilities fell 15.2% ytd to IDR6.8 tn in 1H24, indicating a slower handover pace next year. For 2025, we forecast a net profit of IDR2.4 tn (-29% yoy) after a high base in 2024, still above 2023 levels.

BSDE plans to acquire a 91.9% stake in SMDM for S$195.2 mn (~IDR2.3 tn). SMDM owns 1,074 hectares of land, with an acquisition cost of IDR214k/sqm, or 1.06x 2023 P/B and 22x 2023 P/E. Despite reasonable costs, SMDM’s weak earnings (IDR104 bn profit, 3.4% ROE in 2023) raise concerns. SMDM targets IDR250 bn in marketing sales for 2024. We expect BSDE management to drive potential marketing sales to improve SMDM’s profitability.

Catalyst in 2H24. Some catalysts in 2H24 are a) more aggressive product launching, b) extension of 100% VAT discount to Dec’24, c) Serpong- Balaraja toll road opening in 3Q/4Q24 which expected to connect into BSD City Phase 3 Township into JORR 1 toll road, and d) opening of some amenities such as Eastvara mall and Living World Grand Wisata Bekasi.

We reiterate BUY on BSDE with higher TP of IDR1,585 using DCF-based TP as we roll-over the valuation to 2025, which implied to 0.8x ‘24F PB and 74.7% discount to ‘24F RNAV

Regards,
Benyamin Mikael -KBVS Research