BSDE - 9M23 profit grew 92.6% yoy; beats estimate

KBVS Update
Thursday, 2 Nov 2023

BSDE - 9M23 profit grew 92.6% yoy; beats estimate
(Reinitiate BUY; TP: IDR1,520)

•3Q23 results beat estimate. BSDE booked IDR568 bn of net profit in 3Q23 (+25.0% yoy/+79.3% qoq). This resulted in 9M23 net profit came at IDR1.77 tn (+92.6%), which is above with street’s estimate (73% of cons).  Supporting the bottom line, there was a significant 377% increase in the share of net income from associates and joint ventures, reaching IDR487 bn, which mostly contributed from PT Bumi  Parama Wisesa - Nava Park project (IDR344 bn – net profit).

• Solid 9M23 marketing sales achievement. BSDE’s booked IDR1.9 tn of marketing sales in 3Q23 (-4.2% yoy/-26% qoq). This resulted 9M23 marketing sales at 6.7 tn which contributed ~77% of FY23 target of IDR8.8 tn. Looking ahead to FY23F, we anticipate that BSDE could surpass their FY23 marketing sales target and net profit could reach a five-year all-time high, driven by the sale of land to a joint venture company amounting to IDR 1.58 tn, with realization expected in 4Q23.

•Expect marketing sales to reach IDR 9.4 t in 2024 (+8.4% yoy), primarily driven by 7% growth in the residential segment. The impact from VAT incentives could accelerate apartment sales, noted BSDE has ~IDR1.6 tn of apartment inventory. Additionally, several recurring income and amenities projects are expected to operate in 2024 which could enhance the appeal of BSD City as a desirable location for homebuyers.

• Reiterate BUY on BSDE with TP of IDR1,520 using DCF-based TP (WACC: 11.3%; LTG: 3%), which implied to 0.8x ‘24F PB and 75.7% ’ discount to ‘24F RNAV. We like BSDE due to 1) our expectation on robust marketing sales growth CAGR of 6.8% in the next 5 years a; 2) undemanding valuation, and 3) continuous development in BSD City.

Regards,
Benyamin Mikael - KBVS Research