BNGA
Contact our analyst Achmadi
28% upside. Buy.
September 18th, 2023
Price Rp 1,705
Target price Rp2,180
Net Profit Surges
In the first half of 2023, BNGA had an impressive 27.56% YoY increase in its net profit, soaring to IDR 3.23 trillion from IDR 2.53 trillion the previous year. The most substantial growth was in the Net Gain on Sale of Marketable Securities, surging by 50.39% YoY. However, net interest income only experienced a modest 4.54% growth due to a significant 52.43% YoY surge in interest expenses, while interest income grew by 18.67% YoY. Consequently, the NIM ratio decreased by 19 bps to 4.52% for Q2 figures but increased by 7 bps to 4.61% for the first half. We project BNGA to sustain its profitability momentum, achieving a 37.61% growth in Net Income for the full year, reaching IDR 6.94 trillion.
Strong Loan Growth Driven by Corporate Segment
BNGA had robust loan growth, with a consolidated gross loan increase of 8.61%, including Salam Financing as of June2023. All four segments experienced growth, with Corporate leading up 13.18% YoY. Consumer, EBB, and Commercial Banking also grew by 8.01%, 5.09%, and 1.82%, respectively. Based on these trends, we anticipate an additional 9.86% expansion in BNGA's consolidated loan portfolio for FY23.
Improved Asset Quality
BNGA's asset quality has improved significantly, with the consolidated NPL ratio dropping from 3.50% to 2.49% as of June 2023. The SML ratio also decreased by 82 bps to 5.61% in the same period. This improvement resulted in a 27.14% decrease in provision expenses, while the loan loss coverage increased by 46.90% YoY to 261.90%. Looking ahead, we predict further enhancement in BNGA's consolidated NPL, with a YoY decrease of 41 bps to 2.39%.
Digital Innovation Drives Customer Engagement and Growth
In Q2-2023, BNGA’s transaction value from OCTO Mobile reached IDR 90 trillion, marking a remarkable 92% YoY growth compared to the same period last year. Transactions from OCTO clicks also grew by 18% YoY annually. The majority of these transactions were conducted digitally, with OCTO Mobile and Octo Clicks accounting for 76% of the total.
Valuation: 28% Upside, Buy.
Based on our DDM Valuation, we recommend purchasing BNGA stock, with a one-year target price of IDR 2,180 or a valuation of 1.1x PBV. With a potential upside of 28%, we advise a BUY.
In the first half of 2023, BNGA had an impressive 27.56% YoY increase in its net profit, soaring to IDR 3.23 trillion from IDR 2.53 trillion the previous year. The most substantial growth was in the Net Gain on Sale of Marketable Securities, surging by 50.39% YoY. However, net interest income only experienced a modest 4.54% growth due to a significant 52.43% YoY surge in interest expenses, while interest income grew by 18.67% YoY. Consequently, the NIM ratio decreased by 19 bps to 4.52% for Q2 figures but increased by 7 bps to 4.61% for the first half. We project BNGA to sustain its profitability momentum, achieving a 37.61% growth in Net Income for the full year, reaching IDR 6.94 trillion.
Strong Loan Growth Driven by Corporate Segment
BNGA had robust loan growth, with a consolidated gross loan increase of 8.61%, including Salam Financing as of June2023. All four segments experienced growth, with Corporate leading up 13.18% YoY. Consumer, EBB, and Commercial Banking also grew by 8.01%, 5.09%, and 1.82%, respectively. Based on these trends, we anticipate an additional 9.86% expansion in BNGA's consolidated loan portfolio for FY23.
Improved Asset Quality
BNGA's asset quality has improved significantly, with the consolidated NPL ratio dropping from 3.50% to 2.49% as of June 2023. The SML ratio also decreased by 82 bps to 5.61% in the same period. This improvement resulted in a 27.14% decrease in provision expenses, while the loan loss coverage increased by 46.90% YoY to 261.90%. Looking ahead, we predict further enhancement in BNGA's consolidated NPL, with a YoY decrease of 41 bps to 2.39%.
Digital Innovation Drives Customer Engagement and Growth
In Q2-2023, BNGA’s transaction value from OCTO Mobile reached IDR 90 trillion, marking a remarkable 92% YoY growth compared to the same period last year. Transactions from OCTO clicks also grew by 18% YoY annually. The majority of these transactions were conducted digitally, with OCTO Mobile and Octo Clicks accounting for 76% of the total.
Valuation: 28% Upside, Buy.
Based on our DDM Valuation, we recommend purchasing BNGA stock, with a one-year target price of IDR 2,180 or a valuation of 1.1x PBV. With a potential upside of 28%, we advise a BUY.
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