BJBR
Contact our analyst achmadi
16% upside, Hold
28 March 2024
Price Rp1210
Target price Rp1400
Negative growth in Net Income
In 2023, BJBR still managed to generate a profit, albeit lower than in 2022, with a decrease of -22.83% year-over-year (YoY), to only IDR 1.68 trillion. This decline was primarily due to the increased provision for loans and Shariah financing, along with receivables, which rose by 233.72% YoY. Additionally, interest expenses also experienced significant growth, increasing by 37.62% YoY. We forecast that in 2024, BJBR will generate a profit growth of 12.46% YoY, reaching IDR 2 trillion.
Loan Growth Fueled by Consumer Segment
As of December 2023, BJBR’s loan and financing portfolio stood at IDR 125.08 trillion, marking an 8.05% growth year-over-year (YoY). The most substantial growth was observed in the mortgage loan segment, which increased by 14.08% YoY, while the consumer segment, the leading contributor, also grew by 6.33% YoY. From an economic sector perspective, the trade sector emerged as the top contributor to the loan portfolio, accounting for 25.8%. We anticipate BJBR will continue expanding its loan portfolio by 8.56% in 2024, supported by the consumer segment, which will be driven by new recruitment of civil servants (ASN) after a lengthy moratorium period and contract civil servants (PPPK).
Propelling Sustainable Business Development
BJBR is seriously committed to implementing ESG principles in its business operations. The loan portfolio’s 8.05% growth was significantly influenced by the rise in sustainable financing, totaling IDR 16.5 trillion, a 13.01% increase year-over-year (YoY). Moreover, BJBR participated in the Carbon Exchange (IDXCarbon) by purchasing 4,870 tCO2e carbon credits, aligning with its roadmap to become a carbon-neutral company.
BJB Group’s New Chapter: Holding Company for Another BPD
Bank Bengkulu, as part of the Kelompok Usaha Bank (KUB) strategy, received approval from the OJK (initiated in January 2020) and is now set for consolidation in the Q1-2024 report. BJBR will be the first development bank (BPD) to serve as the parent entity of another BPD. Business synergies are expected to accelerate, leveraging Bank Bengkulu’s business model and unlocking synergy value. Other BPDs, such as Bank Sultra, Bank Jambi, and Bank Maluku Malut, are currently undergoing feasibility studies, with a capital allocation for each BPD ranging from IDR 250-500 billion, depending on its valuation.
Valuation: 16%, Upside, Hold
Based on our DDM valuation, we have set a target price of IDR 1,400 within a year, representing a valuation of 0.88x PBV and a potential upside of 16%. Consequently, we recommend a “Hold” rating for this stock.
In 2023, BJBR still managed to generate a profit, albeit lower than in 2022, with a decrease of -22.83% year-over-year (YoY), to only IDR 1.68 trillion. This decline was primarily due to the increased provision for loans and Shariah financing, along with receivables, which rose by 233.72% YoY. Additionally, interest expenses also experienced significant growth, increasing by 37.62% YoY. We forecast that in 2024, BJBR will generate a profit growth of 12.46% YoY, reaching IDR 2 trillion.
Loan Growth Fueled by Consumer Segment
As of December 2023, BJBR’s loan and financing portfolio stood at IDR 125.08 trillion, marking an 8.05% growth year-over-year (YoY). The most substantial growth was observed in the mortgage loan segment, which increased by 14.08% YoY, while the consumer segment, the leading contributor, also grew by 6.33% YoY. From an economic sector perspective, the trade sector emerged as the top contributor to the loan portfolio, accounting for 25.8%. We anticipate BJBR will continue expanding its loan portfolio by 8.56% in 2024, supported by the consumer segment, which will be driven by new recruitment of civil servants (ASN) after a lengthy moratorium period and contract civil servants (PPPK).
Propelling Sustainable Business Development
BJBR is seriously committed to implementing ESG principles in its business operations. The loan portfolio’s 8.05% growth was significantly influenced by the rise in sustainable financing, totaling IDR 16.5 trillion, a 13.01% increase year-over-year (YoY). Moreover, BJBR participated in the Carbon Exchange (IDXCarbon) by purchasing 4,870 tCO2e carbon credits, aligning with its roadmap to become a carbon-neutral company.
BJB Group’s New Chapter: Holding Company for Another BPD
Bank Bengkulu, as part of the Kelompok Usaha Bank (KUB) strategy, received approval from the OJK (initiated in January 2020) and is now set for consolidation in the Q1-2024 report. BJBR will be the first development bank (BPD) to serve as the parent entity of another BPD. Business synergies are expected to accelerate, leveraging Bank Bengkulu’s business model and unlocking synergy value. Other BPDs, such as Bank Sultra, Bank Jambi, and Bank Maluku Malut, are currently undergoing feasibility studies, with a capital allocation for each BPD ranging from IDR 250-500 billion, depending on its valuation.
Valuation: 16%, Upside, Hold
Based on our DDM valuation, we have set a target price of IDR 1,400 within a year, representing a valuation of 0.88x PBV and a potential upside of 16%. Consequently, we recommend a “Hold” rating for this stock.
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