Intiland Development: Interim results below expectations (Tjandra) - BNP Paribas

Price 325, TP 600, Mkt cap $396m, Avg t/o $1.0m

* Intiland Development reported net profit of IDR102b in 1H11, representing 33% of our full year expectation.

* Of the total revenues, net sales on property (including housing development, high-rise apartment and industrial land) was IDR442b or 88% of total revenues. This is divided into sales from residential areas of IDR232b (46% of total revenues - housing IDR120b and apartment IDR112b) and industrial land IDR211b (42% of total revenues). The rest of the revenues came from office rental of IDR37b (7% of total revenues), hotel IDR4b (1%) and others IDR18b (4%).

* Despite a 10% increase revenues, operating profit declined 18% y-y to IDR139b with operating margin of 27.7% vs. 37.2% in 1H10. We believe the decline in margin was due to the lower margin for the apartment project, 1Park Residences, which is 75% presold, and about 40% completed in June 2011. We only expect 7% operating margin for this project this year, going up to 15% in 2012 while operating margin for the landed property is projected at 30-35%.

* Pretax profit declined 53% as there was a one-off item when the company booked IDR137b gain on the gain on the sale of Grand Interwisata (Isen in Graha Residen, Surabaya) in 1H10.

* Maintain our projection as we expect more revenues to come from 1Park Residences, Talaga Bestari and the Surabaya projects (Graha Natura and Spazio) in 2H11. Trading at 67% discount the estimated NAV, we keep our Buy rating with TP of IDR600.

2011E: Rec EPS 29, P/E 11.1, P/B 0.9, ROE 8.2, Yld -
2012E: Rec EPS 45, P/E 7.3, P/B 0.8, ROE 12.1, Yld 2.7