BTPS
Contact our analyst Lingga
18% upside. Hold
11th November 2021
Price Rp4,000
Target price Rp4730
Net profit up significantly
BTPN Syariah (BTPS) posted a significant net profit increase to IDR 1.1 trillion, +116% YoY in 9M21. Net Interest Income rose 22% YoY on the back of strong credit growth. PPOP also rose significantly 31% YoY from a lower cost of funds and well-managed operational costs. BTPS sticks to its guidance on cost of credit at 7.0-7.5% in FY21F.
Growth but lower Restructuring
In 9M21, financing was higher by 12% YoY to IDR 10.2 trillion, but only up 2% QoQ in 3Q21. There were new write-offs which were quite high at IDR 640 billion in 9M21 from IDR 215 billion in 9M20. Although the 3Q21 NPF remained stable at 2.4% in 9M21, loan restructuring increased to IDR 2 trillion or 20% of the total loans, up from IDR 1.8 trillion or 18% of total loans in 1H21.
Focus on the micro segment
Third Party Funds rose 11% to IDR 8.3 trillion due to a CASA increase of 16% YoY. By the end of September 2021, BTPS gained 4 million active new customers who are in the micro segment. BTPS will continue to develop its business in the ultra-micro segment by using a credit approach based on women's groups. BTPS’ strategy is to make deepen relationships with borrowers through several platform initiatives. One example is the Mitra Right initiative, where the lender acts as an agent of BTPS. Mitra Right borrowers are mostly borrowers who own grocery stalls and can buy basic necessities from BTPS partners at competitive prices and with free shipping using logistics partners.
Valuation: 18% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 4,730, or trading at 4,6x PBV which gives 18% potential upside, Hold.
BTPN Syariah (BTPS) posted a significant net profit increase to IDR 1.1 trillion, +116% YoY in 9M21. Net Interest Income rose 22% YoY on the back of strong credit growth. PPOP also rose significantly 31% YoY from a lower cost of funds and well-managed operational costs. BTPS sticks to its guidance on cost of credit at 7.0-7.5% in FY21F.
Growth but lower Restructuring
In 9M21, financing was higher by 12% YoY to IDR 10.2 trillion, but only up 2% QoQ in 3Q21. There were new write-offs which were quite high at IDR 640 billion in 9M21 from IDR 215 billion in 9M20. Although the 3Q21 NPF remained stable at 2.4% in 9M21, loan restructuring increased to IDR 2 trillion or 20% of the total loans, up from IDR 1.8 trillion or 18% of total loans in 1H21.
Focus on the micro segment
Third Party Funds rose 11% to IDR 8.3 trillion due to a CASA increase of 16% YoY. By the end of September 2021, BTPS gained 4 million active new customers who are in the micro segment. BTPS will continue to develop its business in the ultra-micro segment by using a credit approach based on women's groups. BTPS’ strategy is to make deepen relationships with borrowers through several platform initiatives. One example is the Mitra Right initiative, where the lender acts as an agent of BTPS. Mitra Right borrowers are mostly borrowers who own grocery stalls and can buy basic necessities from BTPS partners at competitive prices and with free shipping using logistics partners.
Valuation: 18% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 4,730, or trading at 4,6x PBV which gives 18% potential upside, Hold.
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