Hold Dec 2018 TP (IDR) 1,850 Consensus Price (IDR) 2,193 TP to Consensus Price -15.6% vs. Last Price +4.5%

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1 Bumi Serpong Damai Tbk (BSDE) Faces Challenge of Stagnant Middle- High Class Income Accomplishment in Marketing Sales Underlined by One-Off Factor In FY 2017, BSDE succeeded to post the sales of IDR10.4 trillion (+67% y-y), and the net profit of IDR4.9 trillion (+172% y-y). It also achieved the target of 2017 s marketing sales amounting IDR7.23 trillion (+16% y-y). Of note, the sales of land amounting to IDR3.1 trillion dramatically hiked compared to 2016 s sales land amounting to IDR1.25 trillion was the potent driver for the accomplishment of marketing sales. It indirectly indicated that the sales of residential products underperformed even though BSDE actively carried out the marketing program, such as price lock. Strengthening Recurring Income In 2018, it posts a flat target of marketing sales compared to 2017 s target of marketing sales amounting to IDR7.2 trillion. The lagging property sales ahead of the political year, and stagnant demand for property segmented for the middle to high class incomes are the challenges faced by BSDE in BSDE buffers the challenges by making use the positive trend of office occupation with a view to strengthening its recurring income. It acquired a number of MSIG Tower and Bakrie Tower s floors in the end-2017 and the early We estimate that it is capable of posting FY2018 s recurring income growth of 36%. Target Price IDR1,850 We use an estimate of a 57.0% discount on RNAV (the last 3-year average) as the basis of valuation method. The target price implies a 2018E P/E of 13.0x (vs 12.4x at the present time). Bumi Serpong Damai Tbk Summary (IDR bn) 2016/12A 2017/12A 2018/12E 2019/12E Revenue 6,603 10,347 8,406 8,851 Revenue growth 6.3% 56.7% -18.8% 5.3% EBITDA 2,677 5,374 3,759 4,039 Net profit 1,815 4,942 2,747 2,913 EPS (IDR) EPS growth -15.2% 172.3% -44.4% 6.0% BVPS (IDR) 1,265 1,517 1,660 1,811 EBITDA margin 40.5% 51.9% 44.7% 45.6% Net Profit Margin 27.5% 47.8% 32.7% 32.9% ROE 7.8% 18.5% 9.0% 8.7% ROA 4.9% 11.7% 5.8% 5.7% ROIC 7.8% 14.3% 8.1% 7.9% P/E 18.6x 6.9x 12.4x 11.7x P/BV 1.4x 1.2x 1.1x 1.0x EV/EBITDA 15.3x 7.5x 11.3x 11.3x DPS (IDR) Dividend yield 0.3% 0.2% 0.2% 0.2% Source: Company Data, Bloomberg, NHKS Research Please consider the rating criteria & important disclaimer NH Korindo Sekuritas Indonesia Company Report Hold Dec 2018 TP (IDR) 1,850 Consensus Price (IDR) 2,193 TP to Consensus Price -15.6% vs. Last Price +4.5% Shares data Last Price (IDR) 1,770 Price date as of Mar 19, wk range (Hi/Lo) 1,935 / 1,560 Free float 39.0% Outstanding sh.(mn) 19,247 Market Cap (IDR bn) 33,297 Market Cap (USD mn) 2,419 Avg. Trd Vol - 3M (mn) Avg. Trd Val - 3M (bn) Foreign Ownership 51.3% Property Real Estate Owner & Developer Bloomberg BSDE.IJ Reuters BSDE.JK Michael Tjahjadi , ext:114 michael@nhsec.co.id Share Price Performance YTD 1M 3M 12M Abs. Ret. 4.1% -2.7% 2.9% -3.5% Rel. Ret. 5.2% 3.2% 0.9% -17.2%

2 A Glance at BSDE BSDE is one of the biggest property developers in Indonesia with its landmark project: Kota Mandiri (A Self-Sufficient City) BSD City. BSDE is a subsidiary of Sinar Mas Group, one of the biggest conglomerates in Indonesia. Its developed projects consists of housing, business and commercial properties embodied in the concept of Kota Mandiri located in big cities across Indonesia. Compared to its peers, BSDE has the second-biggest landbank covering on area of approximately 4,000 hectares. During the last two years, it intensively promotes Price Amnesty and Price Lock programs offering the reduction in price in form of discount, shopping voucher, or door-prize scheme. Indonesia s Real Estate Development Industry in ASEAN Indonesia is a country with the largest area of land and the biggest population in ASEAN. Such qualities recognize Indonesia as the preferred location for the real eatate development business. Indonesia s real estate developers have a larger number of landbank than its ASEAN s peers do. For instance, BKSL and BSDE respectively have the landbank of 14,666 hectares and 3,966 hectares. Indonesia and the Philippines real estate sector are the most competitive amongst their peers in ASEAN. The property developers in those two countries post better gross margins yet lower total asset than their peers do. ASEAN Property Developer Company Market Cap (USD mn) Total Asset (USD mn) Sales Growth Gross Margin Operating Margin Net Profit Growth ROE P/E Dividend Yield BSDE 2,427 3, % 73.4% 48.9% 172.3% 18.5% 6.9x 0.2% PWON 2,205 1, % 57% 46.0% 26.5% 19.6% 17.0x 0.7% CTRA 1,619 2, % 49% 27.5% 0.6% 8.7% 22.3x 0.4% SMRA 975 1, % 48% 26.1% 254.0% 6.1% 35.9x 0.5% Singapore Capitaland Ltd 11,811 45, % 40% 47% 30.3% 8.6% 10.1x 2.7% Malaysia SP Setia Bhd 2,965 6, % 33% 22% -5.2% 8.7% 13.3x 5.0% IOI Properties Group Bhd 2,343 7, % 44% 32% -27.7% 4.7% 11.2x 3.6% Thailand Land & Houses PUB Co Ltd 4,211 3, % 34% 30% 21.4% 21.6% 12.6x 6.4% WHA Corp Ltd 1,836 2, % 47% 39% 12.7% 14.0% 18.0x 5.1% Philippines Megaworld Corp 2,884 5, % 59% 39% 11.1% 9.4% 12.0x 1.2% Source: Bloomberg, NHKS research PT NH Korindo Sekuritas Indonesia Company Research Page 22

3 Operational Performance Quarterly Sales (IDR bn) 1Q15-4Q17 Marketing Sales (IDR bn) 1Q15-4Q17 Source: Company, NHKS research Annual Sales Annual Net Profit Gross, EBIT & Net Margin Sales Breakdown 4Q17 PT NH Korindo Sekuritas Indonesia Company Research Page 33

4 Multiple Valuation Forward P/E band Last 3 years Discount to NAV band Last 3 years Rating and target price Date Rating Target Price Last Price Consensus vs Last Price vs Consensus 03/21/2018 Hold 1,850 1,770 2, % -15.6% Source: Bloomberg, NHKS research Analyst Coverage Rating Closing and Target Price Source: Bloomberg NH Korindo Sekuritas Indonesia (NHKS) stock ratings 1. Period: End of year target price 2. Rating system based on a stock s absolute return from the date of publication Buy : Greater than +15% Hold : -15% to +15% Sell : Less than -15% PT NH Korindo Sekuritas Indonesia Company Research Page 44

5 Summary of Financials BSDE Summary Last Price (IDR) March 19, ,770 Target Price (IDR) Dec , /12A 2017/12A 2018/12E 2019/12E Analyst: Michael Tjahjadi Rating: Hold ROE 7.8% 18.5% 9.0% 8.7% ROA 4.9% 11.7% 5.8% 5.7% INCOME STATEMENT ROIC 7.8% 14.3% 8.1% 7.9% EBITDA/Equity 11.5% 20.1% 12.3% 12.1% In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E EBITDA/Assets 7.2% 12.8% 7.9% 7.9% Sales 6,603 10,347 8,406 8,851 Cash Dividend (IDR bn) Growth (% y/y) 6.3% 56.7% -18.8% 5.3% Dividend Yield (%) 0.3% 0.2% 0.2% 0.2% Cost of Revenue (1,882) (2,757) (2,348) (2,433) Payout Ratio (%) 5% 2% 3% 2% Gross Profit 4,721 7,590 6,059 6,418 DER 31% 31% 31% 31% Gross Margin 71.5% 73.4% 72.1% 72.5% Net Gearing 53% 48% 46% 44% Operating Expenses (2,276) (2,528) (2,654) (2,779) LT Debt to Equity 27% 24% 25% 25% EBIT 2,445 5,062 3,405 3,639 Capitalization Ratio 24% 24% 24% 24% EBIT Margin 37.0% 48.9% 40.5% 41.1% Equity Ratio 64% 64% 65% 67% Depreciation Debt Ratio 20% 20% 20% 21% EBITDA 2,677 5,374 3,759 4,039 Financial Leverage 160% 157% 156% 152% EBITDA Margin 40.5% 51.9% 44.7% 45.6% Current Ratio 294% 237% 251% 270% Interest Expenses (638) (549) (652) (717) Quick Ratio 82% 93% 82% 60% EBT 2,086 5,228 3,108 3,296 Cash Ratio 75% 87% 74% 51% Income Tax (29) (39) (140) (149) Cash Conversion Cycle 1, ,140 1,267 Minority Interest (241) (246) (221) (235) Par Value (IDR) Net Profit 1,815 4,942 2,747 2,913 Total Shares (mn) 19,247 19,247 19,247 19,247 Growth (% y/y) -15.2% 172.3% -44.4% 6.0% Share Price (IDR) 1,755 1,770 1,770 1,770 Net Profit Margin 27.5% 47.8% 32.7% 32.9% Market Cap (IDR tn) BALANCE SHEET In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E Cash 4,181 6,557 5,468 3,272 Price /Earnings 18.6x 6.9x 12.4x 11.7x Receivables Price /Book Value 1.4x 1.2x 1.1x 1.0x Inventories 7,444 7,915 8,449 8,696 Price/Revenue 5.1x 3.3x 4.1x 3.8x Total Current Assets 16,341 17,965 18,513 17,357 PE/EPS Growth -1.2x 0.0x -0.3x 1.9x Net Fixed Assets 14,900 19,266 21,640 24,113 EV/EBITDA 15.3x 7.5x 11.3x 11.3x Other Non Current Assets 7,050 8,720 9,213 10,883 EV/EBIT 16.8x 8.0x 12.5x 12.6x Total Assets 38,292 45,951 49,367 52,353 EV (IDR bn) 41,017 40,443 42,519 45,683 Payables 261 1, Revenue CAGR (3-Yr) 4.8% 22.6% 10.6% 10.3% ST Debt 1,121 2,051 2,026 2,206 EPS CAGR (3-Yr) -12.3% 9.0% 8.7% 17.1% Other Current Liab. 4,184 3,751 5,121 3,867 Basic EPS (IDR) LT Debt 6,527 7,027 7,956 8,661 Diluted EPS (IDR) Other Non Current Liab. 1,846 2,158 2,095 2,407 BVPS (IDR) 1,265 1,517 1,660 1,811 Total Liabilities 13,939 16,754 17,424 17,491 Revenue PS (IDR) Shareholders' Equity 24,353 29,197 31,943 34,861 DPS (IDR) CASH FLOW STATEMENT DCF, RIM & EVA In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E Net Income 1,796 4,920 2,747 2,913 DCF (IDR bn) Deprec & Amortization NOPAT 2,411 5,024 3,252 3,475 Chg. In Working Capital (2,637) (625) (1,809) (2,169) +Depr./Amor CFO (610) 4,607 1,292 1,144 -CAPEX (126) (142) (2,728) (2,872) Capex (126) (142) (2,728) (2,872) -Incr. (Decr.) in Working Cap. (2,637) (625) (1,809) (2,169) CFI (1,467) (3,520) (3,284) (4,230) (Unlevered) FCFF (121) 4,569 (931) (1,166) Dividends Paid - (96) (83) (83) WACC Net Borrowing (PMT) (466) 1, Cost of Debt (Tax Adj.) 10.6% 8.9% 9.4% 9.4% CFF (375) 1, Cost of Equity (COE) 10.5% 11.7% 12.3% 12.3% Net Changes in Cash (2,451) 2,244 (1,090) (2,196) WACC (%) 10.5% 11.1% 11.6% 11.6% RIM OWNERSHIP PROFITABILITY & STABILITY VALUATION INDEX Spread (FROE-COE) (%) -2.3% 8.6% -2.9% -3.2% Residual Income (IDR bn) (507) 2,096 (844) (1,015) By Geography % Shareholders % Equity Charge (IDR bn) 2,322 2,846 3,591 3,928 Indonesia 48.7 PT Paraga Artamida 26.6 EVA United States 43.7 PT Ekacentra Usahamaju 25.0 Invested Capital (IDR bn) 30,022 32,001 38,275 41,924 Luxembourg 2.0 PT Sereasi Niaga Sakti 3.1 ROIC-WACC (%) -2.5% 4.6% -3.1% -3.3% Norway 1.7 PT Simas Tunggal Centre 2.0 EVA (IDR bn) (751) 1,471 (1,205) (1,388) DISCLAIMER This report and any electronic access hereto are restricted and intended only for the clients and related entity of PT NH Korindo Sekuritas Indonesia. This report is only for information and recipient use. It is not reproduced, copied, or made available for others. Under no circumstances is it considered as a selling offer or solicitation of securities buying. Any recommendation contained herein may not suitable for all investors. Although the information here is obtained from reliable sources, it accuracy and completeness cannot be guaranteed. PT NH Korindo Sekuritas Indonesia, its affiliated companies, respective employees, and agents disclaim any responsibility and liability for claims, proceedings, action, losses, expenses, damages, or costs filed against or suffered by any person as a result of acting pursuant to the contents hereof. Neither is PT NH Korindo Sekuritas Indonesia, its affiliated companies, employees, nor agents liable for errors, omissions, misstatements, negligence, inaccuracy arising herefrom. All rights reserved by PT NH Korindo Sekuritas Indonesia PT NH Korindo Sekuritas Indonesia Company Research Page 55