BSDE - Expect Earnings Turnaround in 2024F

KBVS Update
Monday, 6 May 2024

BSDE: Expect Earnings Turnaround in 2024F 
(Maintain BUY - TP: IDR1,310)

Booked strong net profit growth in 1Q24 of IDR1.4 tn (+62.6% yoy, +715% qoq). Strong profit growth was predominantly fueled by enhanced recognition of real estate revenue, which soared by 25.9% yoy to reach IDR3.5 tn, propelled by robust recognition in both residential (68% yoy) and land (72% yoy).

Expect earnings to grow by 37.8% yoy in 2024. We anticipate earnings turnaround by 37.8% to IDR2.7 tn due to JV-land plot sales margin improvement as well as lesser forex loss which arose in 2023 due to the refinancing. We view our net profit target should achievable considering the strong performance in 1Q24 as well as the optimistic target set by the company to achieve IDR3.2 tn in net profit in 2024 (+64.5% yoy).

In-line marketing sales achievement in 1Q24. In the 1Q24, BSDE achieved marketing sales of IDR2.22 tn (+3% yoy), which accounted to ~23% of 2024 target of IDR9.65 tn of our 2024F forecast. The Residential segment contributed IDR1.26 tn, which accounted for 57% of the total pre-sales. On the commercial segment, pre-sales amounted to IDR965 bn, with shophouse sales leading at IDR627 bn, followed by commercial land lot pre-sales at IDR191 bn, and apartment unit pre-sales at IDR147 bn.

Reiterate BUY on BSDE with TP of IDR1,310 using DCF-based TP (WACC: 11.3%; LTG: 3%), which implied to 0.7x ‘24F PB and 78.7% ’ discount to ‘24F RNAV.

Regards,
Benyamin Mikael -KBVS Research