BNGA
Contact our analyst Lingga
19% upside. Hold.
6th August, 2020
Price Rp750
Target price Rp810
Continued CASA rise
The CASA ratio rose 97 bps QoQ to 61.03% in 2Q20 from 60.06% in 1Q20. This is a result of the large CASA obtained from consumer demand deposits because the digital platform is growing amid the pandemic. The corporate segments, and MSMEs also contributed. BNGA will reduce time deposits to manage funding costs lower. We raise our CASA estimate to 60.85%.
The Restructuring Process
The number of restructured loans amounted to IDR22.8tn or 12% of the total loans as of June 2020, BNGA guides that restructuring is expected to reach 18-20% of total loans of IDR. 37-40tn by the end of the year, which is lower than the previous range of 15-25%. Restructured loans from commercial are 32%, the SME 29%, and corporate 18%. Corporate restructuring is still ongoing.
High Credit Cost
Net profit was lower by 34.7% QoQ in 2Q20, due to the large provisioning charge which rose 65% or IDR. 2tn. Credit costs (CoC) are expected to rise by 2.5% this year to cover the impacts of COVID-19. However, NIM has been maintained at 5%, as the company continues to gain digital customers.
Valuation: 19% Upside, Hold
Based on our DDM Valuation, we have a target price within one year of IDR 810 or trading at 0.4x PBV which gives 19% potential upside, Hold.
The CASA ratio rose 97 bps QoQ to 61.03% in 2Q20 from 60.06% in 1Q20. This is a result of the large CASA obtained from consumer demand deposits because the digital platform is growing amid the pandemic. The corporate segments, and MSMEs also contributed. BNGA will reduce time deposits to manage funding costs lower. We raise our CASA estimate to 60.85%.
The Restructuring Process
The number of restructured loans amounted to IDR22.8tn or 12% of the total loans as of June 2020, BNGA guides that restructuring is expected to reach 18-20% of total loans of IDR. 37-40tn by the end of the year, which is lower than the previous range of 15-25%. Restructured loans from commercial are 32%, the SME 29%, and corporate 18%. Corporate restructuring is still ongoing.
High Credit Cost
Net profit was lower by 34.7% QoQ in 2Q20, due to the large provisioning charge which rose 65% or IDR. 2tn. Credit costs (CoC) are expected to rise by 2.5% this year to cover the impacts of COVID-19. However, NIM has been maintained at 5%, as the company continues to gain digital customers.
Valuation: 19% Upside, Hold
Based on our DDM Valuation, we have a target price within one year of IDR 810 or trading at 0.4x PBV which gives 19% potential upside, Hold.
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