Analisa Saham BTPS | 28 Desember 2018

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*BTPN Syariah: Positive Momentum To Continue In 2019; Maintain BUY*
(Alvin Baramuli - RHB Sekuritas)

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♦Reiterate *BUY* and TP: *IDR2,600, 44% upside*

♦*Sustained growth from ultra-micro segment.* We expect BTPS to continue its positive momentum, as it is likely to deliver robust financing growth (FY17-20F CAGR of 21%) stemmed from ultra-micro segment (average ticket size of c.USD200-300), with ample growth opportunities, and modest competition.

♦ *Positive competition with peer-to-peer (P2P) lenders.* BTPS is competing with P2P lenders, which have a larger appetite for higher returns vs other shariah banks. In our view, competition with P2P should be positive, as it brings incentives to be more cost-efficient, innovation on digitalization, and helps to continuously improve credit quality.

♦*Concerns on post-merger (BTPN-SMBCI) outlook.* BTPS would still be a key growth catalyst for BTPN, as the shariah business is still a substantial earnings (c.35% of consolidated) and total loan (c.10% of consolidated) contributor. The upcoming CEO of the merged entity, Mr Ongki Wanadjati Dana, emphasised that BTPS will continue to run independently, and be an important part of BTPN’s long-term strategy.

♦*Maintain BUY and IDR2,600 TP*, as we roll-over our valuation multiple towards FY19F BVPS. We remain bullish on BTPS’ outlook given its high ROE (c.25%), good asset quality (NPF: <2%) and robust financing outlook. Downside risks: deterioration in asset quality, macroeconomic downturn and regulatory.