BTPS
Contact our analyst Lingga
12% upside. HOLD.
4 July, 2020
Price Rp3140
Target price Rp3520
1Q20 Net income jumped
Net Income grew significantly by 40% YoY in 1Q20 despite a 51% YoY increase in provision costs. Operating expenses increased by only 3% YoY, while Net Interest Income grew 22%. This was in line with the financing growth, meaning a stable Net Interest Margin. We estimate this year profit growth will be around 30%
Financing from Micro
In 1Q20, Financing growth was strong, up 22% YoY, and 2% QoQ. Financing is still growing fast from loans customers which are micro-finance and small businesses, especially in the Tunas Usaha Rakyat (TUR) segment. Most loan customers are businesses that sell basic goods which continue to see good demand. BTPS will also improve efficiencies, optimize costs, relax financing to customers, while at the same time strengthen their loss reserves. Credit growth will probably be a bit slow amid the pandemic and in the range of 10%.
Pandemic instalment postponements
BTPS has dramatically adjusted their operations during the covid-19 Pandemic. Across Indonesia there has been a rapid increase in red zones (local lockdown areas) which cover 40-50% of BTPS operational areas. Due to the large-scale social restrictions (PSBB) in these red zone areas, BTPS has conducted restructurings in the form of postponements of instalment payments.
Valuation: 12% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 3520,or trading at 3.2x PBV which gives 12% potential upside, Hold.
Net Income grew significantly by 40% YoY in 1Q20 despite a 51% YoY increase in provision costs. Operating expenses increased by only 3% YoY, while Net Interest Income grew 22%. This was in line with the financing growth, meaning a stable Net Interest Margin. We estimate this year profit growth will be around 30%
Financing from Micro
In 1Q20, Financing growth was strong, up 22% YoY, and 2% QoQ. Financing is still growing fast from loans customers which are micro-finance and small businesses, especially in the Tunas Usaha Rakyat (TUR) segment. Most loan customers are businesses that sell basic goods which continue to see good demand. BTPS will also improve efficiencies, optimize costs, relax financing to customers, while at the same time strengthen their loss reserves. Credit growth will probably be a bit slow amid the pandemic and in the range of 10%.
Pandemic instalment postponements
BTPS has dramatically adjusted their operations during the covid-19 Pandemic. Across Indonesia there has been a rapid increase in red zones (local lockdown areas) which cover 40-50% of BTPS operational areas. Due to the large-scale social restrictions (PSBB) in these red zone areas, BTPS has conducted restructurings in the form of postponements of instalment payments.
Valuation: 12% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 3520,or trading at 3.2x PBV which gives 12% potential upside, Hold.
Previously
