BJTM
Contact our analyst Achmadi
19% upside. HOLD.
9th October 2023
Price Rp 630
Target price Rp 750
Negative Net Income Growth
In the first half of 2023, BJTM reported IDR 0.72 trillion in Net Income, a -11.68% YoY decline. This decrease was driven by a significant 13.62% YoY increase in interest expenses. Despite this, the NIM ratio continued to grow by 0.02% compared to the previous quarter. The substantial reduction in asset impairment expenses contributed to the company's ability to generate profit, albeit with a -66.22% YoY decrease. This led to an increase in the ROA and ROE ratios by 7 and 27 basis points, respectively, to 1.91% and 13.80%. We forecast BJTM to improve its profitability with a 9.41% YoY growth in Net Income, reaching IDR 1.69 trillion in FY23.
Significant Loan and CASA Ratio Growth
As of June 2023, BJTM reported robust loan growth, up by 13.02% YoY compared to June 2022, driven mainly by the Commercial SME segment, which increased by 25.55% YoY. The CASA ratio reached 59.54%, up by 3.66% YoY, primarily due to an 8% increase in Saving Accounts, albeit 42 bps lower than the previous quarter. We project BJTM to continue expanding its loans by another 7.79% while increasing the CASA ratio to 61.01%.
Better Credit Risk Management with Asset Quality Improvement
BJTM managed its risks effectively in the first half of 2023, with a notable improvement in asset quality. As of June 2023, the NPL ratio decreased by 1.32% YoY to 2.80%. The Commercial SME segment showed significant improvement, decreasing by 1.18% to 1.78%, while the Consumer segment performed exceptionally well with a NPL ratio of only 1.02%. This resulted in a credit risk downgrade to 2.71 in June 2023 from 2.78 in March 2023. We anticipate BJTM will continue to manage its credit risk effectively, further reducing its NPL ratio by another 18 bps YoY to 2.65% in FY23.
Valuation: 19% Upside, Hold
Based on our DDM Valuation, our one-year target price is IDR 750, or trading at 0.9x PBV, offering a 19% potential upside. We recommend a Hold rating.
In the first half of 2023, BJTM reported IDR 0.72 trillion in Net Income, a -11.68% YoY decline. This decrease was driven by a significant 13.62% YoY increase in interest expenses. Despite this, the NIM ratio continued to grow by 0.02% compared to the previous quarter. The substantial reduction in asset impairment expenses contributed to the company's ability to generate profit, albeit with a -66.22% YoY decrease. This led to an increase in the ROA and ROE ratios by 7 and 27 basis points, respectively, to 1.91% and 13.80%. We forecast BJTM to improve its profitability with a 9.41% YoY growth in Net Income, reaching IDR 1.69 trillion in FY23.
Significant Loan and CASA Ratio Growth
As of June 2023, BJTM reported robust loan growth, up by 13.02% YoY compared to June 2022, driven mainly by the Commercial SME segment, which increased by 25.55% YoY. The CASA ratio reached 59.54%, up by 3.66% YoY, primarily due to an 8% increase in Saving Accounts, albeit 42 bps lower than the previous quarter. We project BJTM to continue expanding its loans by another 7.79% while increasing the CASA ratio to 61.01%.
Better Credit Risk Management with Asset Quality Improvement
BJTM managed its risks effectively in the first half of 2023, with a notable improvement in asset quality. As of June 2023, the NPL ratio decreased by 1.32% YoY to 2.80%. The Commercial SME segment showed significant improvement, decreasing by 1.18% to 1.78%, while the Consumer segment performed exceptionally well with a NPL ratio of only 1.02%. This resulted in a credit risk downgrade to 2.71 in June 2023 from 2.78 in March 2023. We anticipate BJTM will continue to manage its credit risk effectively, further reducing its NPL ratio by another 18 bps YoY to 2.65% in FY23.
Valuation: 19% Upside, Hold
Based on our DDM Valuation, our one-year target price is IDR 750, or trading at 0.9x PBV, offering a 19% potential upside. We recommend a Hold rating.
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