Contact our analyst Lingga
8% upside. Hold.
28th December, 2021
Target price Rp2,610
Net Income declined
BDMN's Net Profit in 9M21 of IDR 1.4 trillion was down 5% YoY from IDR 1.5 trillion in 9M20. The decline was due to a significant decline in non Interest Income of -24% YoY. Net Interest Income was stable from a year ago, but decreased by 2% on a quarterly basis. BDMN is looking for alternatives to channeling funds through P2P Lending (UKM).
Loan Growth Declined
BDMN loan growth in 9M21 was down -6% YoY. This was caused by a -19% YoY decline in SME loans as subsidiary PT Adira Dinamika Multi Finance (ADMF) continued to reduce loans so that ADMF credit fell -13% YoY. However, the Enterprise Banking and Financial Institutions segment still recorded a positive growth of 8% YoY, from an increase in collaboration through the MUFG network and a focus on bluechip and SOE customers. In terms of CASA, there was an overall increase of 10% YoY with growth of 9% for Current Accounts and 58% for Saving Accounts which brought the CASA Ratio to 57.6% in 9M21.
Quality Asset Improved
Non Performing loans decreased to 3.1% from 3.2% in 9M20, Special Mention Loans also decreased compared to 9M20. This improvement came from loans to the trade, household, transportation and construction sectors.
Valuation: 8% Upside, Hold.
Based on our DDM Valuation, we set a target price within one year of IDR 2,610, which means the shares trading at 0.6x PBV and gives 8% potential upside. Hold.