PT Pegadaian (Persero)-PPGD

Transcription

1 SpesiFIXED Financial Institutions June 1 PT Pegadaian (Persero)-PPGD 1Q 1 Results: weak performances due to declining gold price Company rating Pefindo idaa+/stable Shareholders The Government of the Republic of Indonesia 1 Outstanding bonds Bond ID Size Maturity Coupon Rp bn PPGD13A Jul PPGD13A 1 1-Jul PPGDACN1 3 1-Jul PPGD1ACN Oct PPGD1BCN 15 1-Feb PPGD11A 3-May PPGD11B 1 3-May-1. PPGDBCN Jul-1 7. PPGD1BCN Oct-1. PPGD1CCN 1-Feb PPGD13B 5 1-Jul-17.5 PPGDA 37 -Sep PPGDB 3 -Sep-17. PPGDCCN Jul PPGD1BXBVTW Jul PPGD1DCN 5 1-Feb PPGD13C 1-Jul-19. PPGDDCN1 1 9-Jul-. PPGD1CCN Oct-1 9. Trading summary Bond ID Last trade Price Yield Spread Bps PPGD13A1 3-May n.a PPGD13A -Feb n.a PPGDACN1 9-Oct n.a PPGD1BCN -May n.a PPGD11A 7-Jan PPGD11B 7-Jan PPGD1BCN1 -Oct PPGD1CCN 3-Apr PPGD13B 1-Jan PPGDA 9-Jun PPGD1BXBVT W -Apr PPGD1DCN 1-Mar PPGD13C 1-Dec Ali Hasanudin ali.hasanudin@mandirisek.co.id PPGD omzet (new lending) decreased by -1.7 YoY to Rp.7 trillion in 3M1 due to declining gold price. Gold price recorded negative average return of around -7 in 13, the first negative return since. The trend continued in 3M1 with negative return of -3. to Rp. thousands per gram for average gold price in 3M1 from Rp5.7 thousands per gram in 3M13. The decline in gold price had affected PPGD s omzet (new lending) performance as 97 of PPGD s total lending is contributed by gold pawn. Omzet increased by just.3 YoY in FY13 and further declined to -1.7 YoY in 3M1. Weak earnings performance. Capital rent income decreased by -.1YoY to Rp1. trillion and total operating revenues decreased by -11.YoY to Rp1. trillion on account of declining omzet (new lending). Meanwhile, interest expenses increased by.3yoy to Rp5 billion. Accordingly, net interest income decreased by -1. YoY to Rp1.1 trillion, resulting in lower NIM of 1.1 in 1Q1 from 1. in 1Q13. The decreased in net interest income led to increase cost-to income ratio to 5.9 in 1Q1 from 7.5 in 1Q13. The weak top line performance filtered down to PPGD s net profit which declined by 3. to Rp3 bn. NPL is higher due to drop in gold prices. NPL increased significantly to.5 in 1Q1 from.7 a year earlier with gold pawn that contributed 7 of the total NPLs. Prior to 13, the gold pawn never recorded NPL. The decline in gold value below the loan principal made them prefer not to redeem the pawn collateral. To mitigate further pressure on asset quality, PPGD has changed its policy to determine the Standards Estimates Metals (STM) by following the daily price and lowering the Loan to Value (LTV) Ratio to 5 from 9. Strong liquidity, with short term tenor of its pawn business. The tenor of PPGD s pawn loans on average is around 9 days. The company receives on average Rp-5 trillion cash inflow from customers' collection quarterly or around Rp trillion monthly. Hence, the company should be able to repay its maturing debt amounting to Rp billion in July 1 and Rp5 billion in October 1. Currently Pegadaian plans to issue three new bond series with 1-yr, 3-yr and 5-yr tenors targeting to issue Rp.tn for Omzet expansion. Credit Outlook - Stable Despite of PPGD s weak performances in 1Q1, we still have a stable credit view on PPGD given its strong cash inflow coverage and strong position in the market. PPGD is the monopolizing player, which refers to the Staatsblad (Stbl) regulation No. 131, stating that the pawnshop business is part of the government s monopoly. Key risk for the company s rating stability would be the risk of deteriorating asset quality should the gold price continue to decline. FINANCIAL SUMMARY YE Dec (Rp bn) F 15F Omzet (new lending) 1,73 11,5,13 95,519 11,13 Loan-net 3,57,37,355 5,975 7,95 Total Debt 1,3,71 1,7 19,19, Equity,7 5,37 1,359 11,,55 Revenues,1 7,75 7,5 7,711,13 Net profit 1,7 1,95 1,97 1,3 1,995 NIM () CIR () NPL () Debt to equity(x) , Mandiri Sekutiras estimates Please see important disclosure at the back of this report

2 PPGD June 1 FIGURE 1. PAWN GOODS COMPOSITION Others 3 FIGURE. GOLD PRICE TREND Rp/gr 55,5 5,5 5,5,5 35,5 3,5 5,5,5 15,5 1,5 5,5 5 Gold 97 Jan Jan 1 Jan Jan 3 Jan Jan 5 Jan Jan 7 Source: Bloomberg, Mandiri Sekuritas Jan Jan 9 Jan 1 Jan 11 Jan Jan 13 Jan 1 FIGURE 3. THE FIRST NEGATIVE RETURN SINCE FIGURE. THE LOWEST PERFORMANCE SINCE Average return of gold price YoY growth Rp tn 5 Omzet Yoy growth Source: Bloomberg, Mandiri Sekuritas Q M13 3M1 FIGURE 5. GOLD PAWNS CONTRIBUTED BY 7 OF NPL FIGURE. NPL INCREASED SIGNIFICANTLY IN Pawn loans (Gold) Others Q NPL Mar Page of 1

3 PPGD June 1 FIGURE 7. HIGH LIQUIDITY WITH SHORT TERM PROFILE OF PAWN BUSINESS Days Pawn loans tenor (LHS) Omzet turnover (RHS) x FIGURE. LOANS RECEIVABLE WITH SHORT TERM MATURITY & DEBT WITH MATURITIES WITHIN ONE YEAR 3 1 Rp tn 9.5 Loans receivable (gross) Debt with maturities within one year Loans to one year maturities debt ratio X FIGURE 9. BLOOMBERG CONSENSUS FOR GOLD PRICE FORECAST USD/toz Q1 Q 1F Q3 1F Q 1F Q1 15F 15F 1F 17F Source: Bloomberg Page 3 of 1

4 PPGD June 1 TABLE 1. DETAILED 1Q1 RESULTS Income Statement (Rp bn) 1Q13 1Q1 YoY Capital rent income 1,5 1,5 -.1 Administration others 7 1 Revenues, 1, Interest & Financing () (5).3 Net interest income 1,33 1,93-1. Operational expenses (73) (31) 15. Provision () () Others 19 3 Profit before tax Tax (11) () -3. Net profit 3-3. Balance Sheet (Rp bn) 13 Mar-1 Cash Loan - net,37,355,9 Total assets 9,3 33,9 33,93 Total equity 5,37 1,359 1,9 Bond & Securities issued,97 5,731 5,73 Bank loan 17,39 15,599 15,53 Government loan Total debt,71 1,7 1,75 Ratio () 13 Mar-1 NIM NPL..9. CIR Debt to equity..1., Mandiri Sekuritas calculation Pegadaian Bonds valuation: New Pegadaian bond series issuances might be at the upper range coupon As of May 1, the total outstanding Pegadaian bonds in secondary market is totaling on Rp5.7tn, consisting of 19 series. The shortest tenor was 1-month (PPGD13A1 and PPGD13A which were issued in Jul-9), while the longest tenor was for 7.-yrs (PPGD1CCN1, issued in Oct-11). However, from the existing 19 series of bonds, there were only seven series that traded in secondary market in the last three months. From IDX data, - using volume transaction, frequency and continuity trading data - we calculated index liquidity, which shows that the most liquid Pegadaian bond series was PPGD13A1, which will mature in Jul-1, followed by 9-mo PPGD1BCN and 3.3-yr PPGDA. According to the latest trading data in IDX, on average Pegadaian bonds offer a risk premium of bps above government bond yield with the same tenors. It looks less attractive compared with our fair risk premium calculation for AA+ bond category which gives the premium of bps. However, it still justifies since Pegadaian is one of the SoE companies that regularly issue bonds with very good track record in local investors' perspective. We think that the active Pegadaian bond series, i.e. 3.3-yr PPGDA, still gives attractive valuation as it traded 11.3 yielded 9. on its last transaction at 9 Jun1, which implied 19bps risk premium over risk-free rate; this is relatively attractive compared with the average risk premium of the last 1 transactions at 1bps. While the biggest risk premium was coming from.1-yrs PPGD1BXBVTW, which was trading at 11.7 yielding 1 or giving a premium of 3bps above government bond yield as of -April-1. Page of 1

5 PPGD June 1 Currently Pegadaian plans to issue three new bond series with 1-yr, 3-yr and 5-yr tenors targeting to issue Rp.tn. Book building period is - June 1, with offering coupon range of.5-.5 for 1-yr, for 3-yr and for 5-yrs. Looking at fair risk premium of Pegadaian bonds that we estimate at bps, and the current yield curve, thus the new bonds will be attractive if they give the coupon rate of., 9. and 9.7 respectively or at the upper range of offering coupon rate. TABLE. OUTSTANDING PEGADAIAN BONDS AS OF MAY-1 TOTALING RP5.7TN MATURE No BONDID ISSUE DATE TM (yrs) RATING INTEREST DATE Outstanding (Rp bn) 1 PPGD1ACN1 Oct-11 Oct-1.3 idaa+ Fixed: PPGD1BCN1 Oct-11 Oct-1.3 idaa+ Fixed: 5 3 PPGD1BCN Feb- Feb idaa+ Fixed: PPGD1CCN1 Oct-11 Oct idaa+ Fixed: PPGD1CCN Feb- Feb idaa+ Fixed: 7.5 PPGD1DCN Feb- Feb idaa+ Fixed: PPGDACN1 Jul-13 Jul-1. idaa+ Fixed: PPGDBCN1 Jul-13 Jul-1.11 idaa+ Fixed: PPGDCCN1 Jul-13 Jul-1.11 idaa+ Fixed: PPGDDCN1 Jul-13 Jul-.11 idaa+ Fixed: PPGD1BXBVTW Jul-3 Jul-1.11 idaa+ Step Up, Variable: 1.5 PPGD11A May- May idaa+ Fixed: PPGD11B May- May idaa+ Step Up, Variable: PPGDA Sep-7 Sep idaa+ Fixed: PPGDB Sep-7 Sep idaa+ Step Up, Variable: 3 1 PPGD13A1 Jul-9 Jul-1.9 idaa+ Fixed: PPGD13A Jul-9 Jul-1.9 idaa+ Step Up, Variable: PPGD13B Jul-9 Jul idaa+ Fixed: PPGD13C Jul-9 Jul idaa+ Fixed:.75 Total outstanding 5,739 Source: IDX TABLE 3. LIQUIDITY INDEX: PPGD13A1 WAS THE MOST LIQUID OF PEGADAIAN BONDS Bond Maturity date Total Outstanding Volume trading (Rp bn) Freq trading (x) (Rp bn) FEB MAR APR FEB MAR APR PPGD1ACN1 11-Oct-1 5 PPGD1BCN1 11-Oct-1 5 PPGD1BCN 1-Feb PPGD1CCN1 11-Oct-1 5 PPGD1CCN 1-Feb-17 3 PPGD1DCN 1-Feb-19 5 PPGDACN1 1-Jul-1 3 PPGDBCN1 9-Jul-1 17 PPGDCCN1 9-Jul PPGDDCN1 9-Jul- 1 PPGD1BXBVTW 11-Jul-1 PPGD11A 3-May-1 PPGD11B 3-May-1 1 PPGDA -Sep PPGDB -Sep-17 3 PPGD13A1 1-Jul PPGD13A 1-Jul PPGD13B 1-Jul-17 5 PPGD13C 1-Jul-19 Source: IDX and Mandiri Sekuritas Page 5 of 1

6 PPGD June 1 FIGURE 1. RISK PREMIUM SPREAD OF PEGADAIAN BONDS BASED ON THE LATEST TRADING DATA:.1-YRS PPGD1BXBVTW GIVES THE HIGHEST RISK PREMIUM Risk premium (bps) 3 PPGD1BXBVTW 5 PPGD11A PPGD13B PPGD1DCN PPGD11B PPGDA PPGD1BCN1 15 PPGD1CCN Tenor (yrs) Source: IDX and Mandiri Sekuritas Estimate TABLE. THE LATEST PEGADAIAN BOND TRADING DATA IN SECONDARY MARKET Bond Last Transact ion Price Yield PPGD13A1 May Spread (bps) PPGD13A Feb PPGDACN1 Oct PPGD1BCN May PPGD11A Jan PPGD11B Jan PPGD1BCN1 Oct PPGD1CCN Apr PPGD13B Jan PPGDA Jun PPGD1BXBVTW Apr PPGD1DCN Mar Average risk premium Min/Max risk premium 19/3 Source: IDX and Mandiri Sekuritas Estimate FIGURE 11. YIELD AND RISK PREMIUM PPGD13A1 1 1 Feb-1 Aug-1 Jan-11 Oct-11 Dec-11 Feb- Mar- Jun- Jul- Oct- Jan-13 Feb-13 Apr-13 May-13 Jun-13 Jul-13 Jul-13 Aug-13 Oct-13 Oct-13 Oct-13 Dec-13 Dec-13 Dec-13 Jan-1 Feb-1 Apr-1 Apr FIGURE. YIELD AND RISK PREMIUM PPGD13A Jan-1 Jan-1 Jan-1 Feb-1 Jun-1 Jun-1 Sep-1 Sep- Jan-13 Jan-13 Feb-1 FIGURE 13. YIELD AND RISK PREMIUM PPGD1BCN Mar- 7-May- -May- 1-May- -Jun- 9-Jul- 11-Jul- 1-Aug- -Aug- -Oct- 5-Oct- 17-Jan-13 1-Jan-13 1-Apr Apr Jul-13 1-Jul-13 -Sep-13 7-Oct Dec-13 -Dec-13 5-Feb-1 -Feb-1 7-Feb-1 7-Mar-1 15-Apr-1 3-May-1 -May FIGURE1. YIELD AND RISK PREMIUM PPGD11A Feb-1 17-Feb-1 11-May-1 -Jun-1 -Jan-11 1-Feb-11 3-Sep-11 1-Dec-11 1-Apr- 7-Jun- -Jul- 15-Aug- 1-Aug- 9-Aug- 3-Aug- -Dec- -Feb-13 1-Mar Apr-13 -Apr Apr May Nov-13 -Nov-13 -Dec-13 -Dec-13 1-Dec-13 9-Jan-1 1-Jan-1 7-Jan-1 1 Page of 1

7 PPGD June 1 FIGURE 15. YIELD AND RISK PREMIUM PPGD11B 1 5 FIGURE 1. YIELD AND RISK PREMIUM PPGD1CCN Feb-1 9-Jul-1 3-Jul-1 9-Aug-1 -Aug-1 3-Aug-1 -Dec-1 9-Dec-1 11-Feb-11 5-Aug-11 1-Nov-11 -Nov-11 -Dec-11 5-Jan- 1-Jan- 13-Feb- 3-Feb- -Mar- 9-Apr- 13-May Jul Jul-13 -Jan-1 7-Jan-1 5-Feb- 1-Feb- 9-Feb- 1-Mar- -Mar- -Mar- 1-Mar- -Apr- 3-May- 9-Aug- 3-May-13 -Oct-13 -Nov-13 -Jan-1 7-Jan-1 3-Apr-1 FIGURE 17. YIELD AND RISK PREMIUM PPGD13B FIGURE 1. YIELD AND RISK PREMIUM PPGDA 1 1 Risk premium (RHS) Yield (LHS) bps Feb-1 3-Feb-1 1-Mar-1 3-Feb- -Feb- 15-Aug- 1-Aug- 13-Dec- 1-Dec- -Jul-13 5-Jul-13 9-Jul-13 5-Nov-13 -Nov-13 1-Jan-1 -Jan-1 1-Mar-1 -Apr-1 13-Apr-1 3-Jun-1 1-Jun-1 3-Jul-1 -Aug-1 1-Aug-1 15-Oct-1 -Nov-1 1-Jun-11 1-Jun-11 -Jun-11 1-Aug-11 3-Sep Oct-11 -Dec-11 -Mar- -Apr- 1-May- 1-Aug- 1-Jan-13 -Mar-13 5-Apr-13 1-Apr-13 7-Jun-13 5-Jul-13 1-Jul-13 -Aug-13 1-Oct-13 9-Dec-13 -Dec Dec Feb-1 -Mar-1 -Mar-1 19-May-1 FIGURE 19. YIELD AND RISK PREMIUM PPGD1BXBVTW Mar-1 15-Apr-1 7-Apr-1 -Apr-1 1-Jul-1 1-Jul-1 3-Aug-1 -Sep-1 -Sep-1 -Dec-1 9-Dec-1 1-Nov Dec- -Dec-13 1-Dec Dec-13 1-Dec-13 -Dec-13 1-Jan-1 17-Jan-1 3-Apr-1 -Apr-1 FIGURE. YIELD AND RISK PREMIUM PPGD1DCN Feb- 1-Mar- -Mar- -Mar- -Mar- 13-Mar- 11-Apr- 1-May- 3-May- -May- 7-May- 1-May- -May- 9-May- 3-May- 31-May- 5-Jun- -Jul- 1-Nov- 7-Dec- -Jan-13 7-Jan Feb Mar-13 -Mar-13 1-Apr Apr-13 3-May-13 9-Jul-13 -Nov-13 5-Nov-13 -Nov-13 1-Mar Page 7 of 1

8 PPGD June 1 TABLE 5. FINANCIAL PROJECTION PROFIT AND LOSS 31 December (Rp billion) 13 1P 15P 1P 17P 1P 19P Capital rent income 7,3 7,1 7, 7,5 7,77,51 9,9 1,51 Administration others Revenue 7,75 7,5 7,711,13,59 9,33 1,3 11,37 Interest & Financing charges (,73) (,175) (1,9) (,1) (,1) (,3) (,) (,719) Net interest income,93 5, 5,1 5,315 5,7,1 7,3 7,73 Operational expenses (3,1) (3,5) (3,3) (3,37) (3,5) (3,15) (3,97) (,3) Provision (35) (9) (5) (13) () () (1) (3) Others Profit before tax,577,53,5,1,917 3,171 3,97,5 Tax (73) (5) (1) () (77) (11) (1,1) (1,1) Net profit 1,95 1,97 1,3 1,995,171,359,937 3,1 BALANCE SHEET 31 December (Rp billion) 13 1P 15P 1P 17P 1P 19P Cash Loan - net,37,355 5,975 7,95,9 31,7 3,1 3,3 Accrued revenue 1,37 1,33 1,19 1,9 1,9 1,7 1,,131 Prepaid & advances Fixed assets 59,57,3,1,,7,,91 Other assets Assets 9,3 33,9 3,3 3,95 35,799 39,93,7, Bank loan 17,39 15,599,,, 1, 1, 1,5 Securities issued,97 5,731 7,9,3 7,7 5,717 5,7,7 Government loan Employee benefit Other liabilities ,7 97 1,19 1,9 1,1 1,5 Liabilities 3,9 3,111 1,1,13 1,99 3,937 5,5,19 Common stock Government Revaluation Surplus 3, 3, 3, 3, 3, 3, 3, Retained earning 5,1,1 7,37, 9,9 11,3,71 1,51 Equity 5,37 1,359 11,,55 13,7 15,15 1,3 1,3 Total Liabilities & Equity 9,3 33,9 3,3 3,95 35,799 39,93,7, Page of 1

9 PPGD June 1 KEY RATIOS 31 Desember 13 1P 15P 1P 17P 1P 19P Profitability ROAA () ROAE () NIM () Interest spread Avg interest yield Avg cost of funds Capitalisation Equity/total assets () Debt to assets () Debt to equity(x) Efficiency () Cost to income Ratio Cost to asset ratio Asset quality () Provision/loan NPL and Mandiri Sekuritas estimates Page 9 of 1

10 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Plaza Mandiri th Floor, Jl. Jend. Gatot Subroto Kav. 3-3, Jakarta 19, Indonesia General: , Fax : (Debt Research), (Debt Sales) DEBT RESEARCH TEAM Handy Yunianto Aldian Taloputra Head of Fixed Income Research Economist handy.yunianto@mandirisek.co.id Leo Putra Rinaldi Ali Hasanudin Economist Credit Analyst leo.rinaldy@mandirisek.co.id ali.hasanudin@mandirisek.co.id Yulia Ansari Wisnu Trihatmojo Credit Analyst Research Assistant yulia.ansari@mandirisek.co.id wisnu.trihatmojo@mandirisek.co.id DEBT CAPITAL MARKET TEAM Dennis Reshijaya Head of Institutional Sales dennis@mandirisek.co.id R. Agung Koenoro Paul Hadi Institutional Sales Institutional Sales agung_koenoro@mandirisek.co.id paul.hadi@mandirisek.co.id Sita Arvianti Teguh Suwarno Rahmadita Fitria Institutional Sales Institutional Sales Institutional Sales sita.arvianti@mandirisek.co.id teguh.suwarno@mandirisek.co.id rahmadita.fitria@mandirisek.co.id Indri Ratnasari Mohammad Haikal Ranny Rianovita Institutional Sales Institutional Sales Institutional Sales indri.ratnasari@mandirisek.co.id mohammad.haikal@mandirisek.co.id ranny.rianovita@mandirisek.co.id Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Plaza Mandiri, th Floor Jl. Jend. Gatot Subroto Kav. 3-3 Jakarta 19 - Indonesia General: Fax: (Debt Research) (Debt Capital Market) DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number or fax ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be influenced by any part or all of his or her compensation.