BBRI
Contact our analyst Lingga
21% UPSIDE, Buy
7th January, 2022
Price Rp4,160
Target price Rp5,050
A strong November
In Nov 2021, Revenue grew 70.1% YoY to Rp27.8tn which was driven by an increase in NIM to 7.6% and loan growth of 9% YoY. Despite the lower KUR yields, we still expect BBRI's NIM to be strong from the high proportion of micro loans and further progress on restructuring. BRI's target for Micro & KUR is 18-20 million borrowers by 2024F and NIM will be higher in the range of 2-4Bps in 2022F due to an increase in the proportion of micro loans which are projected to grow by 48% in 2022. We estimate NIM to be around 7% in 2022F.
KUR is the Main Drive
In 2022, BBRI will receive a KUR allocation of IDR 260 trillion, up from IDR 195 trillion in 2021, which is 70% of the total budget. This includes IDR 210 trillion of micro-KUR loans, IDR 20 trillion of Super Micro KUR loans, IDR 30 trillion of Small KUR loans, and IDR 500 billion Kupedes loans. This will be positive as KUR has a lower risk premium. BRI expects slower loan growth from micro (14%) and Kupedes (5%) in 2022F, as MSMEs need longer to recover from the pandemic. The government has reduced the level of KUR subsidies, with micro-KUR reduced by 0.5% to 10.0% and super micro-KUR by 1% to 12%. The yield obtained by the micro-KUR is 16% and the super micro-KUR is 18%. The government have also relaxed the upper limit for Micro KUR starting from >IDR 10-50 million to >IDR 10-100 million.
Valuation: 21% Upside, Buy
Based on our DDM Valuation, we have a target price within one year of IDR. 5,050 or trading at 3,0x PBV which gives 21% potential upside, Buy.
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