Bank Tabungan Pensiunan Nasional (BTPN IJ)

Transcription

1 Equity Research Flash Note Thursday, 04 October 2018 HOLD maintain Last price (IDR) 3,780 Target Price (IDR) 3,900 Upside/Downside +3.2% Previous Target Price (IDR) 3,900 Stock Statistics Sector Banking Bloomberg Ticker BTPN IJ No of Shrs (mn) 5,745 Mkt. Cap (IDRbn/USDmn) 21,716/1,441 Avg. daily T/O (IDRbn/USDmn) 4.9/0.3 Major shareholders (%) Sumitomo Mitsui 40.0 Summit Global Capital Management BV 20.0 Estimated free float 40.0 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (10.6) (7.5) 9.2 BTPN relative to JCI Index Bank Tabungan Pensiunan Nasional (BTPN IJ) A momentum play We reiterate our HOLD call on BTPN with an unchanged GGMderived TP of IDR3,900 post the merger announcement with SMBC Indonesia and BTPN as the surviving entity. The conversion ratio is 1 SMBCI share : BTPN shares. The Extraordinary Shareholders Meeting will be held on 5 October 2018 with the cash offer price set at IDR4,282 per share (1.4x 2018F P/BV) offering 13.2% upside from yesterday s closing share price. Conversion ratio set at 1 SMBCI share: BTPN shares. BTPN just issued the prospectus regarding its planned merger with SMBCI. The conversion ratio is set at 1 SMBCI share : BTPN shares. Post merger, the shareholders structure will be 56.4% SMBC, 14.1% Summit Global, 0.3% BBCA, 0.1% BBNI, 1.2% treasury shares and 27.6% general public. The Extraordinary Shareholders Meeting will be held on 5 October 2018 and the new entity will effectively start to operate on 1 January Fair cash offer price. The cash offer price is set at IDR4,282 per share. Nonetheless, with a cash offer made, the current shareholders have more options on whether to keep their shares or not. The implied 1.4x 2018F P/BV multiple cash offer price is fair, in our view, given the lowteens ROAE over the next three years according to our forecast. This cash offer price offers 13.2% upside using yesterday s closing share price. More access to cheaper funding. With the merger plans, 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 (total 150bps ytd) is its high dependency on expensive funding instruments, i.e. TD and bonds. Assets wise, BTPN will continue to focus on the massmarket segment through SME and the productive poor segment despite the difficult situation in the micro business and the mature phase in its pension segment. BTPN will also be closer to becoming a BUKU IV bank (core capital above IDR30tn) after the merger. We expect this to happen by the end of 2019 at the soonest. Maintain HOLD, TP of IDR3,900. We maintain our HOLD call on the stock with an unchanged GGMderived TP of IDR3,900 (implying 1.3x 2018F P/BV) assuming a CoE of 9.2%, a 10.7% sustainable ROAE and 3% longterm growth. Source : Bloomberg Eka Savitri (6221) ext 3506 eka.savitri@danareksa.co.id Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F PPOP (IDRbn) 3,479 3,076 3,848 4,254 5,195 Net profit (IDRbn) 1,752 1,221 1,723 2,011 2,605 EPS (IDR) EPS growth (%) 4.7 (30.3) BVPS (IDR) 2, , , , ,694.9 PER (x) PBV (x) Dividend yield (%) ROAE (%) Source : BTPN, Danareksa Estimates See important disclosure at the back of this report 1

2 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Jan17 Jul17 Jan18 Jul18 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Jan17 Jul17 Jan18 Jul18 Exhibit 1. Loans and Growth Exhibit 2. Net Interest Income and Growth Exhibit 3. NIM and LDR Exhibit 4. NPLs Exhibit 5. PE BAND CHART x Exhibit 6. PBV ROAE BAND CHART 4.0 x % Fwd P/E Mean +1SD 1SD Fwd P/BV Mean +1SD 1SD ROAE (RHS) See important disclosure at the back of this report 2

3 Exhibit 7. Shareholders structure # of shares (mn) Ownership (%) BTPN SMBC 2, Summit Global 1, Public 2, , Treasury , SMBCI SMBC BBNI BBCA Convertion ratio Postmerger structure SMBC 4, Summit global 1, BBNI BBCA Public 2, Treasury , Source : Company See important disclosure at the back of this report 3

4 Exhibit 8. Income Statement Interest Income 13,695 14,046 14,667 15,521 17,117 Interest Expense (4,841) (4,524) (4,428) (4,382) (4,362) Net Interest Income 8,854 9,522 10,239 11,138 12,755 NonInterest Income (NII) ,082 Oper. Income 9,543 10,162 11,023 12,079 13,837 Oper. Expenses (6,064) (7,086) (7,175) (7,825) (8,642) Preprovisions profit 3,479 3,076 3,848 4,254 5,195 Provisions & Allowances (870) (1,098) (1,166) (1,237) (1,326) Operating Profits 2,610 1,978 2,683 3,017 3,869 NonOperating Income (5) (42) (25) (24) (30) Exceptionals Pretax Profit 2,605 1,937 2,658 2,993 3,839 Income Tax (729) (515) (664) (659) (845) Minorities (124) (201) (270) (323) (389) Net Profit 1,752 1,221 1,723 2,011 2,605 Exhibit 9. Balance Sheet Gross Loans 63,168 65,352 72,156 80,444 91,331 Provisions (685) (794) (890) (992) (1,014) Net Loans 62,483 64,558 71,266 79,452 90,317 Govt. Bonds Securities 5,953 6,367 7,013 7,372 6,648 Other Earnings Assets Total Earnings Assets 80,492 83,964 92, , ,107 Fixed Assets 2,880 2,994 3,278 3,550 3,841 NonEarnings Assets 3,736 3,898 3,817 3,858 3,837 Total Assets 91,371 95, , , ,945 Customer Deposits 61,806 62,670 67,083 72,055 78,915 Banks Deposits Int. Bearing Liab. Others 73,490 76,639 82,876 91, ,055 Total Liabilities 74,823 78,095 85,609 94, ,055 Share capital & Reserves 2,208 2,263 2,263 2,263 2,263 Retained Earnings 13,866 14,258 15,464 16,933 18,965 Shareholders' Funds 16,074 16,521 17,727 19,195 21,228 Minority interests ,265 1,654 Total Equity & Liabilities 91,371 95, , , ,937 See important disclosure at the back of this report 4

5 Exhibit 10. Ratios Yield on Earning Assets Cost of funds Interest Spread Net Interest Margin Cost/Income Ratio Oper. Exp./Oper. Gross Inc Gross NPL Ratio LLP/Gross NPL Cost of Credit Loan to Deposit Ratio Loan to Funding Ratio CASA Mix ROAE ROAA CAR Exhibit 11. Dupont and growth Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Dupont PreTax ROAA Tax Retention rate PostTax ROAA Goodwil, Assoc& Min Leverage ROAE Growth (%) Interest income Net Interest Income Other Oper. Expenses Fee Based Income (2.4) (7.1) PreProvision Oper. Profit 7.2 (11.6) Net Profit 3.0 (30.3) Shareholders Equity Loan Earnings Asset Deposit Int. Bearing Liab CASA (1.7) Total Asset Source : BTPN, Danareksa Estimates