BBTN
Contact our analyst Lingga
35% Upside. Buy.
29th April 2021
Price Rp1585
Target price Rp2140
High Profit Growth
BBTN recorded a 36.75% YoY increase in net profit. This growth was caused by an increase in Net Interest Income of 27.32% YoY because Interest expenses decreased by -10.28% YoY from a decrease in the cost of funds by 3.69% due to a reduction in Time Deposit rates and less expensive savings products like Batara Prima Savings. In addition, the expensive IDR 11tr debt issue (approx. 3% of total funding) will mature in 2021. Profit from Operations rose 51.40% due to a sharp decline of Provisions by -25.73%. Operating Expenses increased by 18.07% due to an increase in insurance premiums, an increase in DTA reserves, remuneration for human resources, and new recruitment in specialist fields.
Higher NIM
In 1Q21, NIM increased to 3.31% in line with our previous expectations. For the future, we estimate that NIM will be stable at around 3,30% in 2021F as BBTN loan interest rates are relatively sticky because they are linked to subsidized KPR loans.
Loan Growth
Loan growth increased by 3.19% YoY, mostly supported by the subsidized KPR segment which grew by 9.0% YoY while non-subsidized mortgage growth was 0.20% YoY. Quarterly loan disbursement in 1Q21 has shown a recovery as BBTN is focused on subsidized and non-subsidized KPR as well as other consumer loans which are higher than the same period last year. We are forecasting a 8% increase in credit growth in 2021F.
Restructured Loan
As of March 31, 2021, the total number of borrowers in the Covid-19 restructuring was 343,641 with total loans of IDR 58.96 trillion. 32% are from subsidized mortgage schemes, 34% non-subsidized mortgage schemes, 17% Construction & Commercial loans, and under 10% from corporate, sharia financing, and other housing & consumer loans. BBTN expects that 85% will be restructured by 2022 at the latest. 7.5% of the total restructured loans are classified as NPL which will reduce to around 4.12% in FY21F 3.74% in FY22F.
Valuation: 35% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 2140 or trading at 0.8x PBV which gives 35% potential upside, Buy.
BBTN recorded a 36.75% YoY increase in net profit. This growth was caused by an increase in Net Interest Income of 27.32% YoY because Interest expenses decreased by -10.28% YoY from a decrease in the cost of funds by 3.69% due to a reduction in Time Deposit rates and less expensive savings products like Batara Prima Savings. In addition, the expensive IDR 11tr debt issue (approx. 3% of total funding) will mature in 2021. Profit from Operations rose 51.40% due to a sharp decline of Provisions by -25.73%. Operating Expenses increased by 18.07% due to an increase in insurance premiums, an increase in DTA reserves, remuneration for human resources, and new recruitment in specialist fields.
Higher NIM
In 1Q21, NIM increased to 3.31% in line with our previous expectations. For the future, we estimate that NIM will be stable at around 3,30% in 2021F as BBTN loan interest rates are relatively sticky because they are linked to subsidized KPR loans.
Loan Growth
Loan growth increased by 3.19% YoY, mostly supported by the subsidized KPR segment which grew by 9.0% YoY while non-subsidized mortgage growth was 0.20% YoY. Quarterly loan disbursement in 1Q21 has shown a recovery as BBTN is focused on subsidized and non-subsidized KPR as well as other consumer loans which are higher than the same period last year. We are forecasting a 8% increase in credit growth in 2021F.
Restructured Loan
As of March 31, 2021, the total number of borrowers in the Covid-19 restructuring was 343,641 with total loans of IDR 58.96 trillion. 32% are from subsidized mortgage schemes, 34% non-subsidized mortgage schemes, 17% Construction & Commercial loans, and under 10% from corporate, sharia financing, and other housing & consumer loans. BBTN expects that 85% will be restructured by 2022 at the latest. 7.5% of the total restructured loans are classified as NPL which will reduce to around 4.12% in FY21F 3.74% in FY22F.
Valuation: 35% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 2140 or trading at 0.8x PBV which gives 35% potential upside, Buy.
