Bank Central Asia (BBCA IJ)

Transcription

1 Equity Research Company Update Thursday, 06 December 2018 HOLD Maintain Last price (IDR) 26,150 Target Price (IDR) 28,000 Upside/Downside +7.1 Previous Target Price (IDR) 22,700 Stock Statistics Sector Bloomberg Ticker Banking BBCA IJ No of Shrs (mn) 24,945 Mkt. Cap (IDRbn/USDmn) 652,306/45,290 Avg. daily T/O (IDRbn/USDmn) 370.8/25.7 Major shareholders () PT Dwimuria Investama 54.9 Anthony Salim 1.8 Estimated free float 43.1 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa 1,06 1, ,398.3 Consensus 1,04 1, ,353.6 Danareksa/Cons BBCA relative to JCI Index Bank Central Asia (BBCA IJ) Fully valued We maintain our HOLD call on BBCA with a new TP of IDR28,000 (implying 3.8x 2019F P/BV) as we also roll over our valuation to 2019F. Loans growth will moderate to 11.8 next year due to BBCA s conservative management style. On the funding side, we do not expect more room for a lower blended CoF given the minimal impact from the recent cut in the bank s savings rate to 1.45 p.a. We also assume a minor increase in the fee income contribution to 19.2 of total operating income in FY19F (9M18: 18.7). Modest loans growth projected. With softer GDP growth projected for next year, we estimate loans growth of 11.8 yoy, mainly driven by the corporate and consumer segments. BBCA s existing corporate borrowers will continue to obtain loans, particularly for their working capital needs. Additionally, BBCA s loans exposure to the financial services sector, including Pegadaian (the nonlisted SOE pawnshop) and a few multifinance companies, will remain high given the sector s manageable risk profile in our view. Meanwhile, consumer lending will continue to be supported by mortgages, particularly for the middle up income segment with loans above IDR1bn. Limited room for a lower blended CoF. Given BBCA s status as the transactional bank of choice, the bank benefits from substantial CASA deposits in its funding structure. Its current maximum 1month TD rate is 5.5 as of October 2018, already at the same level as that of other banks after policy rate hikes of 150bps in total. As a result, we see limited room for further declines in its blended CoF going forward. We therefore project a stable blended CoF of 2.1 next year with the proportion of CASA deposits reaching 77.3 of total customer deposits by the end of the year. Flat fee income contribution to operating income. Fee income has contributed substantially to BBCA s operating income (especially in comparison to other big banks such as BMRI, BBNI and BBRI). Yet, the contribution from fee income has already reached its optimum level, in our view. In the past ten quarters, feeincome s contribution hovered between 17.3 and 19.2 of operating income. As such, we expect the contribution from feeincome to reach 19.2 of total operating income in FY19F. Maintain HOLD, new TP: IDR28,000. We reiterate our HOLD call on BBCA with a higher GGMderived TP of IDR28,000 (implying 3.8x 2019F P/BV) assuming 7.0 CoE, 18.5 sustainable ROAE and 3 longterm growth. Our TP near its 10 years +0.5SD of 3.9x P/BV multiple. 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) 30,400 31,791 36,042 40,173 46,749 Net profit (IDRbn) 20,606 23,310 26,257 29,725 34,474 EPS (IDR) ,06 1, ,398.3 EPS growth () BVPS (IDR) 4, , , , ,499.7 PER (x) PBV (x) Dividend yield () ROAE () Source : BBCA, Danareksa Estimates See important disclosure at the back of this report 1

2 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Jan17 Jul17 Jan18 Jul18 Jan08 Jul08 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 2 x 20.0 Exhibit 6. PBV ROAE BAND CHART 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 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 FY15 FY16 9M17 FY17 9M18 FY18F FY19F FY20F 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18 Sep 18 Dec 16 Dec 17 Dec 18F Dec 19F Dec 20F Exhibit 7. Loans portfolio breakdown Exhibit 8. Loans mixture projection IDR trn Floating < 3mths Floating > 3mths Fixed Corporate (LHS) Consumer (LHS) SME (LHS) yoy loans growth (RHS) Exhibit 9. Quarterly loans and assets yields Exhibit 10. Quarterly cost of deposits and cost of funds Loan yields Asset yields Cost of deposits Cost of funds Exhibit 11. Quarterly fee income Exhibit 12. Fee income forecast 3.5 IDRtrn IDRtn Feeincome (LHS) Feeincome/operating income (RHS) Fee income (LHS) Fee income/op income (RHS) See important disclosure at the back of this report 3

4 Exhibit 13. Changes in forecast Key assumptions 2017A Old New Changes (ppt) 2018F 2019F 2020F 2018F 2019F 2020F 2018F 2019F 2020F Net int. inc (IDR bn) 41,826 45,493 49,560 56,568 45,493 49,332 55,719 (0.5)* (1.5)* PPOP (IDR bn) 31,791 36,042 40,322 47,438 36,042 40,173 46,749 (0.4)* (1.5)* Net profit (IDR bn) 23,310 26,257 29,958 35,361 26,257 29,725 34,474 (0.7)* (2.5)* Loans growth () (1.6) (3.4) Deposits growth () Asset yield () (0.1) Blended CoF () NIM () (0.1) Credit cost (bps) Net profit growth () (0.9) () ROAE () (0.1) (0.4) *in percentage () Source : Company, Danareksa Sekuritas estimates Exhibit F PBV ROAE Matrix BNGA BNLI BJTM BBTN BTPN PNBN BBNI BJBR BDMN BBRI BMRI Source : Bloomberg as of 5 December 2018, Danareksa Sekuritas estimates BTPS BBCA x See important disclosure at the back of this report 4

5 Exhibit 15. Income Statement Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Interest Income 50,426 53,768 58,729 63,463 71,068 Interest Expense (10,347) (11,941) (13,236) (14,131) (15,349) Net Interest Income 40,079 41,826 45,493 49,332 55,719 NonInterest Income (NII) 13,700 15,155 18,059 20,960 24,242 Oper. Income 53,779 56,982 63,552 70,292 79,961 Oper. Expenses (23,379) (25,190) (27,510) (30,119) (33,212) Preprovisions profit 30,400 31,791 36,042 40,173 46,749 Provisions & Allowances (4,561) (2,633) (2,999) (3,000) (3,639) Operating Profits 25,839 29,159 33,043 37,173 43,110 NonOperating Income Exceptionals Pretax Profit 25,839 29,159 33,043 37,173 43,110 Income Tax (5,207) (5,838) (6,774) (7,435) (8,622) Minorities (27) (11) (12) (13) (14) Net Profit 20,606 23,310 26,257 29,725 34,474 Exhibit 16. Balance Sheet Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Gross Loans 415, , , , ,399 Provisions (12,505) (13,244) (15,607) (16,612) (18,455) Net Loans 403, , , , ,944 Govt. Bonds Securities 113, , , , ,804 Other Earnings Assets 11,788 12,815 13,439 14,279 14,973 Total Earnings Assets 599, , , , ,675 Fixed Assets 25,234 25,949 27,776 29,604 31,281 NonEarnings Assets 13,099 18,597 14,285 15,327 16,070 Total Assets 676, , , ,169 1,023,712 Customer Deposits 530, , , , ,171 Banks Deposits 4,901 5,758 4,281 4,379 4,758 Int. Bearing Liab. Others 548, , , , ,887 Total Liabilities 564, , , , ,052 Share capital & Reserves 13,930 15,305 14,467 14,673 14,570 Retained Earnings 98, , , , ,991 Shareholders' Funds 112, , , , ,561 Minority interests Total Equity & Liabilities 676, , , ,169 1,023,712 See important disclosure at the back of this report 5

6 Exhibit 17. Ratios Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F 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 18. 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 PreProvision Oper. Profit Net Profit Shareholders Equity Loan Earnings Asset Deposit Int. Bearing Liab CASA Total Asset Source : BBCA, Danareksa Estimates