Sentul City reported a net profit of IDR 221 billion

Sentul City: FY12 result booking Rp221bn net profit above ours (108.3%) and in-line with consensus’ estimates (100.1%)

BKSL has reported a FY12 net profit of Rp221bn which is above our estimates (108.3%) and in-line with consensus’ (100.1%). On a yearly basis, margin shows improvement from the gross level to the net margin level.

Lower booking of sales in Q4 was a result of lower number of sales despite the high level margins of the products that BKSL sold. BKSL showed a 68% yoy increase in opex as a result of higher A&P spending. Below the operating line, BKSL was supported by lower other expenses due to provisions which was booked in 2011.

BKSL has a bright 2013 in our view with exciting new and existing projects. Marketing sales booking from last year of Rp739bn from Sentul City and Rp457bn from Sentul Nirwana will most likely boost the company’s revenue this year. The company’s recently opened Pasar Apung (Floating Market) is not to be overlook as BKSL reported that the riverside dine-in spot has been a huge success. New exciting deals and projects coming include HERO’s next generation hypermart in Sentul City, the new Serpong Natura project, Pertamina Hospital, the anticipated Jungleland.

We believe that BKSL has a clear vision of its unique township which continue to offers creative and appealing products and facilities, which leads to continue to like the company. Sentul City’s ASP of approximately Rp5mn/sqm still has much upside in our view due to the unique green hillside location and improving facilities. The company expects ASP to be around Rp6.5mn/sqm this year. Re-iterate BUY on BKSL which is trading at 27.3x FY13F PE vs. industry of 16.4x.