CLSA BSDE 2Q10 result

BSDE reported a good 2Q10 result, broadly in-line with our forecast. While revenue booking was down 5% QoQ, the GP margin expanded to 58.6%, hence resulting in a 3% expansion in gross profit.

Net profit expanded 23% QoQ due to lower ‘other expenses’.

1H10 revenue booking was 41% of our FY10 forecast, however as pointed out before, GP margin (56.4% in 1H10) was higher than our expected 50.5%. Net profit for 1H10 was Rp183bn, 50% of our FY10 forecast. Net profit for 1H10 increased 46% YoY.

We remain bullish on BSDE as one of our top picks. BUY, now trading at 48% discount to NAV. Strong property sales, and margin expansion continue to be catalysts for BSDE. Marketing sales reached Rp900bn in 1H10 (up 22% YoY) and we believe it can reach the targeted Rp2tn this year.