Bekasi Fajar ($BEST): Bottom line Surprise in 1Q16
¨ Bekasi Fajar (BEST) recorded 1Q16 net profit of IDR124bn (+64% YoY, -16% QoQ), beat the street expectations.
¨ This is thanks to 3.8% rupiah strengthening to IDR13,276/USD as of Mar-16 from IDR13,795 as of Dec-15.
¨ The company has also started paying back its bank loan (principle and interest) since Dec-15. As results, BEST gearing level is now decline to 41% with total debt repayment of IDR112.5bn as of 1Q16.
¨ No sales have been recorded YTD, however the management advised there are about 2ha land area that currently under negotiation at ASP IDR3m/sqm.
¨ We still kept our forecast unchanged, where we expect:
· About 27ha booked for FY16F assuming ASP of IDR2.471m/sqm (vs 1Q16 accounting ASP of IDR2.521m/sqm)- please refer to figure 2
· With net profit expected to be at IDR253bn (+19% YoY), backed by better margin and rupiah (currency) stability.
¨ We believe the current share price has taken into account all the potential downside risks. Regardless, the counter is trading at a 48% discount to its replacement value of IDR537 per share, which grants investors the opportunity to buy at an undemanding valuation.
¨ Maintain BUY, TP of IDR430.