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Danareksa Equity Snapshot - 22 Oktober 2018
October 22, 2018 09:30 WIB

FROM EQUITY RESEARCH

Bank Tabungan Pensiunan Nasional: Fully valued (BTPS IJ. IDR 3,820. HOLD. TP IDR 3,900)

We reiterate our HOLD call on BTPN with an unchanged GGM-derived TP of IDR3,900 after the company reported better-than-expected 9M18 net profits of IDR1.6tn thanks to 11.7% yoy lower operating expenses. NIM slipped to 11.5% with 3% yoy loans growth and higher credit costs of 203bps arising from rebalancing of the loans mix towards the SME segment. This year, we expect a 11.1% NIM, 155bps credit costs and 41.4% net profits growth.

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Bank Tab. Pensiunan Nasional Syariah:  A profitable business model (BTPS IJ. IDR 1,685. BUY. TP IDR 2,100)

We reiterate our BUY call on BTPS with a GGM-derived TP of IDR2,100 (implying 3.4x 2019F P/BV) following the release of the 9M18 results that are inline with our forecast. NIM will remain high in our view despite the gradual decline to 36.4% next year coming from a 130bps drop in asset yields to 41.5%. While the funding mixture will still be dominated by TD with a 79.8% contribution to total funding by the end 2019F. All in, we assume a 410bps credit cost and 29.7% yoy net profits growth next year.

To see the full version of this report, please click here

 

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MARKET NEWS

Corporate

  • GGRM: Kediri Airport to commence construction in the next 6 months
  • Wijaya Karya: Set IDR4.5tn of target of overseas new contracts in 2019
  • Pembangunan Perumahan: New contracts achievement 66% as of Sep1

Danareksa Equity Snapshot - BTPN, 22 Oktober 2018
October 22, 2018 09:13 WIB

Bank Tabungan Pensiunan Nasional(BTPN IJ)

Fully valued

 

We reiterate our HOLD call on BTPN with an unchanged GGM-derived TP of IDR3,900 after the company reportedbetter-than-expected 9M18 net profits of IDR1.6tn thanks to11.7% yoy loweroperating expenses. NIM slipped to 11.5% with 3% yoy loans growth and higher credit costs of 203bps arising from rebalancing of the loans mix towards the SME segment. This year, we expect a 11.1% NIM, 155bps credit costsand 41.4% net profits growth.

 

9M18 result highlights. The net profits of IDR1.6tn beat our forecast thanks to a 11.7% yoy decline in operating expenses to IDR4.3tn. In addition, the NIM compressed by c.20bps on a yoy basis to 11.5% because of rebalancing of the loans mix towards the SME and productive poor segments. Consequently, the credit costs rose to 203bps from 154bps in 9M17 because of the inherently high credit costs in the productive poor segment (9M18: 394bps).

 

Rebalancing of the loans mix towards the lower yielding segments. BTPN’s loans only grew by 3% yoy mainly supported by the SME and productive poor lending segments with +12% and +21% yoy growth, respectively. Going forward, the bank’s matured business segments - pension and micro loans – are expected to be lower in the loans mix. As such, we expect the loans yield to drop to 20.4% in FY18F given the higher contribution from the SME loans segment of 19.5% by year-end vs. 19% as of September 2018.

 

More access to cheaper funding. With the merged entity in January 2019, BTPN will have more access to cheaper funding instruments given the synergies from SMBC as its parent. Currently, the major challenge for BTPN following policy rate hikes (a total of 150bps ytd) is its high dependency on expensive funding instruments, i.e. TD and bonds. Assets wise, BTPN will continue to focus on the mass-market segment through SME and the productive poor segment despite the mature phase of its pension segment. BTPN will also be closer to becoming a BUKU IV bank (core capital above IDR30tn), which we expect to happen by mid-2020 at the soonest.

 

Maintain HOLD, TP of IDR3,900. We maintain our HOLD call on the stock with an unchanged GGM-derived TP of IDR3,900 (implying 1.3x 2018F P/BV) assuming a CoE of 9.2%, a 10.7% sustainable ROAE and 3% long-term growth.

 

… read more 20181022 BTPN


Danareksa Equity Snapshot - BTPS, 22 Oktober 2018
October 22, 2018 09:12 WIB

Bank Tab. Pensiunan Nasional Syariah(BTPS IJ)

A profitable business model

 

We reiterate our BUY call on BTPS with a GGM-derived TP of IDR2,100 (implying 3.4x 2019F P/BV) following the release of the 9M18 results that are inline with our forecast. NIM will remain high in our view despite the gradual decline to 36.4% next year coming from a 130bps drop in asset yields to 41.5%. While the funding mixture will still be dominated by TD with a 79.8% contribution to total funding by the end 2019F. All in, we assume a 410bps credit cost and 29.7% yoy net profits growth next year.

 

9M18 highlights. The net profits of IDR698bn (+48.9% yoy) in 9M18 are inline with our forecast and supported by strong 21.1% yoy loans growth and a lower credit cost of 394bps with a 1.6% gross NPLs ratio as of September 2018. The loans loss coverage (LLC) ratio climbed to 183% as of September 2018 coming from BPTS’ financing exposure in areas of Lombok. If we strip out this one-off event, the LLC ratio would stand at 156%.

 

Maintaining its captive market. BTPS will continue to focus on its niche market - the productive poor segment for women. Despite the government’s Ultra Micro (Umi) loans program that channels loans through cooperatives and two non-listed SOE financing companies, PT Pegadaian and PT Permodalan Nasional Madani (PNM), the management of BTPS argues that the bank’s current scale has room to be increased. As such, we expect 20.8% yoy financing growth next year with 3.8mn borrowers. This should translate into a higher ticket size of IDR2.3mn vs. IDR2.1mn as of September 2018.

 

Margins will remain high. Given its one-of-a-kind business model, the NIM will remain far above the industry level. However, we do expect the NIM to gradually decline to 36.4% for FY19F supported by higher individual financing exposure. Please note that the bank’s individual financing is still in the pilot project stage as this type of financing is only offered to borrowers who have already passed cycle 5 (each cycle has a 52-week tenor). While funding is still heavily skewed towards wealthy individuals who place their funds in TD products (the mudharabah akad scheme). We assume that the blended CoF touches 6.0% next year in light of the recent 150bps policy rate hikes.

 

Maintain BUY with a TP of IDR2,100. We maintain our BUY call on BTPS with a GGM-derived TP of IDR2,100 assuming 9.3% CoE, 24.5% sustainable ROAE and 3% long-term growth.

 

… read more 20181022 BTPS