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BBTN
Contact our analyst Lingga

15% Upside. HOLD.
14th August 2020
Price Rp1330
Target price Rp1670

NIM  still low
In 1H20, BBTN posted a net profit of IDR 768 billion, down -41.24% YoY. The decrease was due to provisioning costs, up +115.03% YoY. Net Interest Margin was at 3.16% which is smaller than 3.53% in 1H19. BBTN managed to reduce operating expenses by -3.4% YoY with rental, service & maintenance costs falling by -16.76% YoY. BBTN plans to close several more branches in the next two quarters and a total of 115 branches this year. BBTN also won the trust of the government with a deposit of IDR 5tn, which can reduce the Cost of Funds.

Focus on smaller loans
BBTN posted loan growth of +0.32% YoY in 1H20, slower than 1Q20 of +4.14%. In June, an increase in non-subsidized loans was in line with BBTN's strategy to focus on smaller size loans. BBTN is still maintaining a cautious expansion strategy. They will have a cooperation with Semen Indonesia, for construction of subsidized houses which can be significant. The process of completing the house for sale is faster. We still estimate loan growth to be around +4% in FY2020.

Restructured loan process
As at 30 June 2020, BBTN has restructured IDR 36.46 trillion or 15% of total loans, which consisted of 38.03% non-subsidized KPR, 34.30% Subsidized KPR, 16.01% Construction & Commercial Loans and the rest from Sharia Financing and Housing & Other Consumer loans. The amount of loans restructured in July only reached IDR 4.5 trillion, or half of the total loans restructured in June which was IDR 9.9 trillion. By the end of the year, BBTN estimates that loan restructuring will reach IDR 45 trillion, 18% of the total loans and will be dominated by Subsidized and Non-Subsidized loans.

Valuation: 15% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 1670 or trading at 0.7x PBV which gives 15% potential upside, Hold.
Download full report here
​BBTN May2020
​BBTN Mar2020
​BBTN Oct2019
PT. Binaartha Sekuritas

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