BSDE Rekomendasi Buy

Bumi Serpong Damai Where the future lies Strong marketing sales Marketing sales reached Rp828 bn in 1Q12, up 17% yoy. The 1Q12 marketing sales are also 20% of our full year target of Rp4.1 trillion (which is 19% higher than the marketing sales achieved in 2011). The major contributor to the marketing sales is BSD city, followed by Kota Wisata and Grand Wisata. Note that as a result of seasonality, BSDE usually books 40% of its marketing sales in the first half of the year and 60% in the second half (since more clusters are launched in the second quarter). BSD City is about to launch four new clusters: FOGLIO, PLACIDO, GIARDINA HEIGHT, and ALBER EXTENTION by the end of April. The total number of units to be launched is 198, with prices ranging from Rp900 million to Rp2.1 billion. The Serpong area has great appeal Continued improvements in the infrastructure supported by the availability of access roads, suggest a bright future for the Serpong area. Given the development trend in this area, BSDE is optimistic that Serpong will become a new CBD area within the next 5 years, a significant change since 70% of the BSD City workers are still commuting to Jakarta, even up to now. Demand in BSD City remains high and the area accounts for 65%-70% of the company's total marketing sales. By selling around 100 ha per year, or about 1,000-2,000 houses, BSDE's current huge land bank of 3,055 ha in the BSD City area should be sufficient for around 30 years of development. Strong appetite for BSD City property translates into continuous land price appreciation. For the residential and commercial areas, average land selling prices reached Rp4.5 mn and Rp7mn, respectively, in 2011. This year, we forecast 15% selling price increases. Strong internal funding Despite its huge landbank, the company is eager to acquire more land, especially since the current land acquisition price is only Rp300-400k per sqm. For 2012, BSDE has earmarked Rp2 trillion for capex, of which Rp600-700 bn will be used for land acquisition and the rest for building the infrastructure and financing the construction of the office buildings. With cash of Rp3,479 bn at the end of 2011, and only a small amount of debt financing, we anticipate that the company will remain in a net cash position of 35% at the end of 2012. TP raised to Rp1,580 We remain optimistic on the company's outlook - especially the BSD City project which has plenty of room to be developed going forward. Additional growth will come from BSDE's other projects which have shown consistently good performance. Surging land prices have boosted the value of the company's assets, resulting in total NAV of Rp61,508 billion. By applying a 55% discount to the NAV of the total company, we arrive at a new Target Price of Rp1,580. BUY.