BJBR
Contact our analyst Lingga
25% upside
5th May 2020
Price Rp 780
Target price Rp1,000
BEKS acquisition
BJBR acquisition of BEKS to help meet their liquidity needs can be done, we think, by using money market funds and / or purchasing the assets in stages based on certain requirements. Due Diligence now being conducted by BJBR seems to show the level of NPLs will not lead to significant costs. The Focus is on BEKS liquidity needs, and making sure that the costs incurred will not be a significant burden on BJBR.
Single digits loan growth
Credit Growth was single digit 9.2% YoY in 1Q20. The Commercial segment is still BJBR’s fastest growing at 17.3% YoY. The Consumer Segment grew 8.1% with Mortgages and Micro loans growing at 7.4% and 5.4%. Despite the current pandemic we continue to estimate loan growth will be in the range of 6-7%.
Quality of BJBR Assets
BJBR restructuring of all segments will require IDR. 3.3 trillion with 63% using the stimulus from the government. Gross Non Performing Loans rose to 1.65% because of an increase in the value of Non Performing mortgages by 64 billion from 260 billion in 4Q19 to 324 billion in 1Q20. We estimate Non Performing Loans will increase n the range of 2% in 2020.
BJBR focus
In this Pandemic Period, BJBR business continues to be based on fixed credit, mainly consumer credits which are 69% of total BJBR credits. In addition BJBR will also grow commercial credits related to government projects (APBN / APBD).
Valuation: 23% Upside potential, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR1,000, which would mean the shares trading at 0.5x PBV and gives 23% upside potential. Buy.
BJBR acquisition of BEKS to help meet their liquidity needs can be done, we think, by using money market funds and / or purchasing the assets in stages based on certain requirements. Due Diligence now being conducted by BJBR seems to show the level of NPLs will not lead to significant costs. The Focus is on BEKS liquidity needs, and making sure that the costs incurred will not be a significant burden on BJBR.
Single digits loan growth
Credit Growth was single digit 9.2% YoY in 1Q20. The Commercial segment is still BJBR’s fastest growing at 17.3% YoY. The Consumer Segment grew 8.1% with Mortgages and Micro loans growing at 7.4% and 5.4%. Despite the current pandemic we continue to estimate loan growth will be in the range of 6-7%.
Quality of BJBR Assets
BJBR restructuring of all segments will require IDR. 3.3 trillion with 63% using the stimulus from the government. Gross Non Performing Loans rose to 1.65% because of an increase in the value of Non Performing mortgages by 64 billion from 260 billion in 4Q19 to 324 billion in 1Q20. We estimate Non Performing Loans will increase n the range of 2% in 2020.
BJBR focus
In this Pandemic Period, BJBR business continues to be based on fixed credit, mainly consumer credits which are 69% of total BJBR credits. In addition BJBR will also grow commercial credits related to government projects (APBN / APBD).
Valuation: 23% Upside potential, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR1,000, which would mean the shares trading at 0.5x PBV and gives 23% upside potential. Buy.
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