Bumi Serpong Damai (BSDE IJ)

Trimming Our FY25F/26F Net Profit by -34%/-25%, Well-Connected Township Thesis Remains Intact

 

  • BSDE’s weak 1Q25 result was due to delays in handovers, which also reflected its projects’ high concentration risks.
  • We trimmed our FY25F/26F net profit by -34%/-25% to incorporate risks of delays in handover execution.
  • Maintain Buy with a lower TP of Rp1,450; BSDE is an attractive laggard play in the sector as thesis of well-connected township remains intact.

 

1Q25 Financial Results Impacted by Fewer Working Days

BSDE’s weak 1Q25 net profit of Rp321bn (-31% qoq; -78% yoy) formed only 8%/9% of our/cons. FY25F estimates of Rp3.92tr/Rp3.56tr were primarily driven by significant decline in property development revenue (-32% yoy) from Rp3.3tr to Rp2.3tr. BSDE noted that this was due to fewer working days, postponing several projects’ handover and land sales negotiation process. In addition, several projects’ handovers, such as Grand Wisata were accelerated in 4Q24 to fulfill the eligibility for the VAT-waiver. These timing effects highlight developers’ revenue recognition risks, particularly for those with concentrated pre-sales (BSDE 89% in Greater Jakarta), which we previously identified in our scorecard (Exhibit 10).

 

Trimming FY25F/26F Net Profit by -34%/-25%

Despite management’s expectation of an improvement in 2Q25 product handover, we still see the risks of delays continuing to impact execution. Thus, we trimmed our overall revenue recognition schedule, resulting in a lower FY25F/26F revenue by -25%/-18% to Rp11.1tr/Rp11.3tr and net profit by -34%/-25% to Rp2.6tr/Rp2.8tr. We maintain our FY25F pre-sales at Rp9.6tr, yet raise our FY26/27F pre-sales forecast by 15%/15% to Rp9.9tr/Rp10.2tr to incorporate potential JV land sales of ~Rp1tr/year, which was previously not factored into our model.

 

Maintain Buy with lower TP Rp1,450; Choice of Laggard Play in the Sector

We maintain our Buy rating with an unchanged 67% disc. to RNAV, yet lower our TP slightly to Rp1,450 to reflect a potentially reduced net cash position. This is mainly due to expected debt drawdowns to fund landbanking and development capex (~Rp4.5tr in FY25). We believe headwinds in 1Q25 financial results should have already been priced-in, while the market continues to overlook BSDE’s well-connected townships. This shall support a stable 3% FY25F-29F CAGR of pre-sales, Rp10-11tr in value (2nd only to CTRA at Rp11-13tr), despite ~48% being contributed by BSD City. YTD stock price -5.8% vs. CTRA +0.5%, PWON -0.5%, SMRA -15.1%, makes BSDE a choice for laggard play in the sector. Key risks: lower pre-sales, handover execution.

 

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