BTPS
Contact our analyst Lingga
20% upside. BUY.
31 July 2021
Price Rp2,370
Target price Rp2,840
Stronger Net Profit
In 1Q21, Net Profit increased significantly by 40% YoY. Good cost control can be seen in the operating expenses which increased by only 3% YoY. NIM was stable at 15% on an annual basis, helped by a lower cost of funds (CoF) which fell to a record low of 4.4% in 1Q21
Growth but lower Asset Quality
In 1H21, loans increased 15% YoY but Non-Performing loams increased to 2.4% from 2.1% in 1Q21 as BTPS lowered ratings for some restructured laons. In June restructured loans increased slightly to 12% of total loans from 10% in May, due to the impact of rising Covid-19 cases at the end of June. We estimate loans will grow by 12,3% YoY in 2021F
Customer Digitization
BTPS launched a new Mitra Right digital application for ultra-micro customer banking transactions. The application will facilitate registration with improved authentication, more transparent customer receipts, and includes distribution features such as customers can order inventory through the application and connect to strategic partners of the bank ,and receive orders without shipping costs. The customer base consists of 6 million customers ,4 million of which are active customers covering 235,000 communities in 2,600 districts.
Valuation: 20% Upside, Buy
Based on our DDM Valuation, we have a target price within one year of IDR 2,840, or trading at 2.8x PBV which gives 20% potential upside, Buy.
In 1Q21, Net Profit increased significantly by 40% YoY. Good cost control can be seen in the operating expenses which increased by only 3% YoY. NIM was stable at 15% on an annual basis, helped by a lower cost of funds (CoF) which fell to a record low of 4.4% in 1Q21
Growth but lower Asset Quality
In 1H21, loans increased 15% YoY but Non-Performing loams increased to 2.4% from 2.1% in 1Q21 as BTPS lowered ratings for some restructured laons. In June restructured loans increased slightly to 12% of total loans from 10% in May, due to the impact of rising Covid-19 cases at the end of June. We estimate loans will grow by 12,3% YoY in 2021F
Customer Digitization
BTPS launched a new Mitra Right digital application for ultra-micro customer banking transactions. The application will facilitate registration with improved authentication, more transparent customer receipts, and includes distribution features such as customers can order inventory through the application and connect to strategic partners of the bank ,and receive orders without shipping costs. The customer base consists of 6 million customers ,4 million of which are active customers covering 235,000 communities in 2,600 districts.
Valuation: 20% Upside, Buy
Based on our DDM Valuation, we have a target price within one year of IDR 2,840, or trading at 2.8x PBV which gives 20% potential upside, Buy.
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