Contact our analyst Achmadi
23% upside, Buy
23rd September, 2022
Target price Rp10260
Net Profit up +25%
BBCA recorded a Net Profit of IDR 18.05 trillion in 1H22, up +24.86% YoY from IDR 14.46 trillion in 1H21. The growth was driven by interest income which grew +1.89% while well-managed interest expenses decreased almost -18% in 1H22. We forecast that BBCA will improve its Net Profit +30% from IDR 31.42 trillion in FY21 to IDR 40.85 trillion in FY22.
Strong Loan Growth
In the 1H22, BBCA recorded strong loan growth of +13.72% YoY. The growth was driven by corporate loans, which grew +19.12%. Other loans like Commercial/SME and Consumer grew too, by +11.12% and +8.08 respectively. We assume Total Gross Loans (bank only) will grow +10.61% YoY in FY2022 with Corporate Loans growing the fastest at 14.39% compared to last year.
Asset Quality Improvement
There was an improvement of BBCA’s Gross NPL ratio in 1H2022 which declined almost -19 bps to 2.20%. Of the three types of loans, only Commercial/SME had a higher NPL ratio, from 2.46% in 1H21 to 2.48% in 1H22. Corporate lending had the biggest improvement with a -30bps decline to 2.32%, while consumer NPLs were down -25 bps to 0.25%. We predict BBCA will be able to decrease its NPL ratio further to 1.88% in FY2022.
Valuation: 23% Upside, Buy
Based on our DDM Valuation, we have a target price within one year of IDR 10,260 or trading at 5.6x PBV which gives 23% potential upside, Buy.