BJBR
Contact our analyst Lingga
54% upside, Buy
10th September 2021
Price Rp1,285
Target price Rp1,980
Significant PPOP growth
BJBR net profit in 2Q21 was up by 14.4% to IDR 924 billion, driven by PPOP which was up significantly by 41% YoY to IDR 1.472 billion, Fee-based income rose 20.1% to IDR 575 billion, driven by increased digital transaction fees and treasury liquidity management fees. Net interest income also increased by 20.1% to IDR 3.695 billion. BJBR has developed its own BJBR application to increase fee-based revenue from digital transactions in 2Q21.
Stronger Credit demand and asset quality
In 2Q21, Credit growth increased by 6.8% YoY, supported by commercial loans up 18.8% YoY, Mortgages 12.5%, and Consumer loans 4.2%. In terms of asset quality, NPLs decreased to 1.3% from 1.6% in 2Q20. The management aims to maintain the quality of its assets as the PPKM is relaxed. We estimate credit growth will be 7.6% in 2021F
Significant deposit growth
In 2Q21, Third-party funds rose 21% to IDR 109.3 billion l, but the CASA ratio decreased by 8.1% YoY. The increase in Third Party Funds was supported by an increase in time deposits which increased by 41%. The cost of funds decreased by 3.9% thanks to lower interest rates.
Valuation: 54% Upside potential, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 1,980, which would mean the shares trading at 1.0x PBV and gives 54% upside potential. Buy.
BJBR net profit in 2Q21 was up by 14.4% to IDR 924 billion, driven by PPOP which was up significantly by 41% YoY to IDR 1.472 billion, Fee-based income rose 20.1% to IDR 575 billion, driven by increased digital transaction fees and treasury liquidity management fees. Net interest income also increased by 20.1% to IDR 3.695 billion. BJBR has developed its own BJBR application to increase fee-based revenue from digital transactions in 2Q21.
Stronger Credit demand and asset quality
In 2Q21, Credit growth increased by 6.8% YoY, supported by commercial loans up 18.8% YoY, Mortgages 12.5%, and Consumer loans 4.2%. In terms of asset quality, NPLs decreased to 1.3% from 1.6% in 2Q20. The management aims to maintain the quality of its assets as the PPKM is relaxed. We estimate credit growth will be 7.6% in 2021F
Significant deposit growth
In 2Q21, Third-party funds rose 21% to IDR 109.3 billion l, but the CASA ratio decreased by 8.1% YoY. The increase in Third Party Funds was supported by an increase in time deposits which increased by 41%. The cost of funds decreased by 3.9% thanks to lower interest rates.
Valuation: 54% Upside potential, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 1,980, which would mean the shares trading at 1.0x PBV and gives 54% upside potential. Buy.
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