BJBR
Contact our analyst Lingga
12% upside
27th November 2020
Price Rp1,420
Target price Rp1,590
Credit growth increased significantly
In 3Q20, credits jumped by 8.7% YoY. Growth was supported by the consumer segment with growth of 7.2% from civil servant and pension loans, Micro 7.1%, Mortgage 8%, and commercial which grew by 15.7% YoY, mainly from state-owned pharmaceutical companies. We estimate credit growth will be 8-9% taking into account a government fund infusion of IDR 3.5 Tn in 2020F
Asset Quality Improved
In 3Q20, Non-Performing Loans decreased to 1.5% from 1.6% in 2Q20. This decline was driven by the Micro Loans, Commercial Loans, and Mortgage Loan segments. Special Mention Loans also decreased to 2.3% from 3% in 2Q20, with a higher Coverage Ratio of 138% from 130.7% in 2Q20.
Restructured Loans
As of September 30, 2020, BJBR has only restructured loans amounting to IDR 2.7 trillion (2.8% of total loans), and by the end of the year, total restructuring is estimated to be IDR 4.4 trillion or 4.6% of total loans. Most of the credit restructuring came from the commercial and micro-segments, and a small portion was in the consumer segment, which is loans for civil servants with fixed income.
Valuation: 12% Upside potential, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 1,590, which would mean the shares trading at 1x PBV and gives 12% upside potential. Hold.
In 3Q20, credits jumped by 8.7% YoY. Growth was supported by the consumer segment with growth of 7.2% from civil servant and pension loans, Micro 7.1%, Mortgage 8%, and commercial which grew by 15.7% YoY, mainly from state-owned pharmaceutical companies. We estimate credit growth will be 8-9% taking into account a government fund infusion of IDR 3.5 Tn in 2020F
Asset Quality Improved
In 3Q20, Non-Performing Loans decreased to 1.5% from 1.6% in 2Q20. This decline was driven by the Micro Loans, Commercial Loans, and Mortgage Loan segments. Special Mention Loans also decreased to 2.3% from 3% in 2Q20, with a higher Coverage Ratio of 138% from 130.7% in 2Q20.
Restructured Loans
As of September 30, 2020, BJBR has only restructured loans amounting to IDR 2.7 trillion (2.8% of total loans), and by the end of the year, total restructuring is estimated to be IDR 4.4 trillion or 4.6% of total loans. Most of the credit restructuring came from the commercial and micro-segments, and a small portion was in the consumer segment, which is loans for civil servants with fixed income.
Valuation: 12% Upside potential, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 1,590, which would mean the shares trading at 1x PBV and gives 12% upside potential. Hold.
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