BJTM
Contact our analyst Lingga
18% upside. BUY.
5th June 2020
Price Rp 510
Target price Rp 600
Focus on growing Consumer loans
1Q20 loan growth was still quite good at 14.02% YoY, dominated by Commercial loan growth of 21.76%. With several Government project budgets temporarily suspended or diverted to handle Covid-19. it is estimated that there will be slower growth in commercial and SME loans, so BJTM will focuses instead on growing consumer credit. Payment sources will come from payrolls that are relatively unaffected by Covid-19. We are still targeting Loans to grow around 14% in 2020.
NPLs increased 3.35%
In 1Q20, Non-Performing loans rose 3.35%, Commercial 10.02%, SME 5.42%, and Consumer 0.32%, Commercial NPLs grew significantly due to insurance claims for deaths and termination of employment. Government project construction credits were relatively stable with no impact yet from COVID-19 in 1Q20. As of 2 June 2020, loans that had been restructured amounted to Rp 171.5 billion from 744 debtors. The potential loans to be affected by Covid-19 is Rp 1.02 trillion.
Time Deposit growth
Third-Party Funds grew by 11.48% YoY with Time Deposits up by 30.37%, Saving Accounts 15.18%, and Current Accounts -6.24%. In this pandemic condition there is potential for a decrease in Current Accounts. Management can offset the impact of this by investing idle funds in money market marketable securities. to still create net interest income.
Valuation: 18% Upside, HOLD.
Based on our DDM Valuation, we have a target price within one year of IDR. 600 or trading at 0.7x PBV which gives 18% potential upside, HOLD.
1Q20 loan growth was still quite good at 14.02% YoY, dominated by Commercial loan growth of 21.76%. With several Government project budgets temporarily suspended or diverted to handle Covid-19. it is estimated that there will be slower growth in commercial and SME loans, so BJTM will focuses instead on growing consumer credit. Payment sources will come from payrolls that are relatively unaffected by Covid-19. We are still targeting Loans to grow around 14% in 2020.
NPLs increased 3.35%
In 1Q20, Non-Performing loans rose 3.35%, Commercial 10.02%, SME 5.42%, and Consumer 0.32%, Commercial NPLs grew significantly due to insurance claims for deaths and termination of employment. Government project construction credits were relatively stable with no impact yet from COVID-19 in 1Q20. As of 2 June 2020, loans that had been restructured amounted to Rp 171.5 billion from 744 debtors. The potential loans to be affected by Covid-19 is Rp 1.02 trillion.
Time Deposit growth
Third-Party Funds grew by 11.48% YoY with Time Deposits up by 30.37%, Saving Accounts 15.18%, and Current Accounts -6.24%. In this pandemic condition there is potential for a decrease in Current Accounts. Management can offset the impact of this by investing idle funds in money market marketable securities. to still create net interest income.
Valuation: 18% Upside, HOLD.
Based on our DDM Valuation, we have a target price within one year of IDR. 600 or trading at 0.7x PBV which gives 18% potential upside, HOLD.
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