BMRI
Contact our analyst Lingga
6% upside. HOLD.
12 November, 2019
Price Rp7,050
Target price Rp7,500
No constraints in terms of liquidity
BMRI has no liquidity constraints. This is due to the stable growth of Third party funds which increased by 7.2% YoY in the third quarter. This growth was supported by lower cost current accounts which rose 18.1% to 153.1 Trillion. To increase deposits, BMRI continues to improve their service quality for customers, by making online transacting easier. The value of e-channel transactions has reached IDR 560 trillion, up 6.7% YoY with 31.7 million registered e-channel users, up 10% YoY. We estimate this will continue to grow around 7-9% a year
The Corporate Segment is the main focus of BMRI
BMRI reported a total credit growth of 7.8% YoY in 9M19, with micro-loans (13.8% of total loans) being the main driver because they grew by 19.4% YoY namely payroll loans, however, corporate loans (38.5% of total loans) only grew by 7.6% YoY. Going forward, the corporate segment will remain the main focus of BMRI especially infrastructure, FMCG & Health Services.
BMRI Coverage for KRAS and Duniatex
BMRI has 26% coverage of a total loan of 6.6 trillion. For KRAS, BMRI already has 26% coverage with a total loan of IDR6.6trillion as of September 2019. Also, BMRI management is targeting 30% that has been restructured in August 2019. As for the Duniatex group, BMRI management also highlighted that it already provided 15% coverage by September 2019 and plans to increase the figure to 25% by the end of this year.
Valuation: 6% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 7500,or trading at 1.2x PBV which gives 6% potential upside, Hold.
BMRI has no liquidity constraints. This is due to the stable growth of Third party funds which increased by 7.2% YoY in the third quarter. This growth was supported by lower cost current accounts which rose 18.1% to 153.1 Trillion. To increase deposits, BMRI continues to improve their service quality for customers, by making online transacting easier. The value of e-channel transactions has reached IDR 560 trillion, up 6.7% YoY with 31.7 million registered e-channel users, up 10% YoY. We estimate this will continue to grow around 7-9% a year
The Corporate Segment is the main focus of BMRI
BMRI reported a total credit growth of 7.8% YoY in 9M19, with micro-loans (13.8% of total loans) being the main driver because they grew by 19.4% YoY namely payroll loans, however, corporate loans (38.5% of total loans) only grew by 7.6% YoY. Going forward, the corporate segment will remain the main focus of BMRI especially infrastructure, FMCG & Health Services.
BMRI Coverage for KRAS and Duniatex
BMRI has 26% coverage of a total loan of 6.6 trillion. For KRAS, BMRI already has 26% coverage with a total loan of IDR6.6trillion as of September 2019. Also, BMRI management is targeting 30% that has been restructured in August 2019. As for the Duniatex group, BMRI management also highlighted that it already provided 15% coverage by September 2019 and plans to increase the figure to 25% by the end of this year.
Valuation: 6% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 7500,or trading at 1.2x PBV which gives 6% potential upside, Hold.
