REMINDER BKSL: Flashnote – Sentul City (BKSL) – 9M’12 result*

PT Sentul City Tbk (BKSL) just released its 9M'12 result. The following are
our comments:

- Revenue grew by 88.3% YoY to Rp545 billion, while the net income only
grew 50.7% YoY to Rp181 billion.
Net profit margin retreated to 33.2%
in 9M'12 from 41.5% in 9M'11 as a result of lower net income portion from
associated company (Bukit Jonggol Asri or Sentul Nirwana).

- On quarterly basis, revenue and net profit declined by 53.8% QoQ and
50.1% QoQ respectively on the back of lower property delivery. However, we don't see this as a bad sign since accounting sales is a lagging indicator. On the contrary, we believe that marketing sales could serve as a
leading indicator to measure the Company's performance ahead.

- BKSL's 9M'12 *revenue seems below our forecast as it only achieve
65.9% of our full year number of Rp828 billion, which is caused by some
delay in planned block sales. Meanwhile, 9M'12 net income is in-line
with our estimate, forming 75.9% of our full year number of Rp238
billion.

-Marketing sales in first 10 month of 2012 reached Rp507 billion,
forming 84.5% of its FY'12 target of Rp600 billion. So far, we see a significant improvement on marketing sales trend this year compared to 2011's full year achievement of Rp310 billion. (please see the chart below)

-Pertamina hospital construction has been completed and the interiors
is currently being installed. As this hospital will specialize in liver, kidney and heart illness, its completion will attract more traffic to Sentul City area. This hospital will begin its commercial operation in the first quarter next year.

Currently
BKSL is traded at a very attractive discount to NAV of 76%, which is still lower than its comparable peers (on average traded at 41% discount to NAV).

We continue to like BKSL & reiterate our Buy call with
TP of Rp440/share.

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By : Listri Valsa
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