Indonesian Companies in Focus: Bumi Serpong Damai
Indonesian real estate developer Bumi Serpong Damai, part of the Sinar Mas Group, has ample room for expansion. According to its latest quarterly financial report, the company owns 3,954.88 hectares of land that has not been developed yet, 70 percent of which is located near BSD City, an ambitious urban planning scheme that combines housing, business and commercial properties not far from Indonesia's capital city of Jakarta. The company also has land banks in Jakarta, Bogor, Surabaya, Palembang, Balikpapan and Samarinda.
Meanwhile, Bumi Serpong Damai (BDS) has cash and cash equivalents reserves of IDR 5.9 trillion (approx. USD $443.6 million) and IDR 22 trillion worth of equity. Furthermore, with an interest cover ratio of 9.6 the company is in a safe position, implying it has plenty of room for further expansion.
In 2016, BSD plans to add 800 hectares to its existing land banks, gradually. The company set aside IDR 1 trillion in capital expenditure (capex) - about 25 percent of total capex this year - for the acquisition of new land this year. Initially, BSD targeted to collect IDR 1.5 trillion from a bonds issuance to cover its expansion plans. However, it cut its June bonds issuance target by more than a half to IDR 650 billion as BSD expects to be able to issue the remaining debt notes at lower interest rates in the future. The company offers 5 and 7-year bonds at 9 percent and 9.25 percent interest, respectively, until Monday (13/06). These bonds are scheduled to be listed at the Indonesia Stock Exchange coming Friday.
BSD targets to raise IDR 6.8 trillion in marketing sales in 2016, roughly similar to last year's result, supported by sales of commercial projects. In the second half of 2016 the company will launch three projects: (1) a multi-functional estate in West Jakarta, (2) the Aerium apartments in West Jakarta, and (3) the Klaska Residence in Surabaya. BSD also aims to have sold 50 percent of the Element apartment in South Jakarta by the end of 2016. After this project was launched in March 2015 it only managed to sell 30 percent of the total amount of 372 units.
Up to May 2016, BSD sold IDR 2 trillion in marketing sales, or about 29 percent of its full-year target. This implies that the company is still on track to achieve the full-year target.
UOB Kay Hian Securities set the target range of BSD's shares at IDR 2,390 per piece. So far this year, the company's shares have risen 3.06 percent to IDR 1,855 a piece.
Stock Quote Bumi Serpong Damai - BSDE:
BSD has also expanded into the toll road sector. Together with Astratel Nusantara, Transindo Karya, it formed Trans Bumi Serbaraja (BSD controls a 50 percent stake in this entity) that will operate the 30-kilometers long Serpong-Balaraja toll road in West Java. Land acquisition for this project has been concluded for 80 percent already.
Bumi Serpong Damai's Financial Highlights:
| 2014 | 2015 | 2016F | 2017F | 2018F | |
| Operating Income |
2,796 | 3,097 | 3,202 | 3,558 | 4,002 |
| EBITDA | 5,614 | 6,210 | 6,451 | 7,329 | 8,305 |
| Net Income | 3,798 | 2,139 | 2,104 | 2,298 | 2,646 |
| P/E Ratio (x) |
9.5 | 16.9 | 17.2 | 15.7 | 13.6 |
| P/BV (x) | 2.4 | 1.9 | 1.7 | 1.6 | 1.4 |
in billion IDR rupiah unless otherwise stated
Source: UOB Kay Hian (10/06/2016)
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