Analisa Saham BBTN dan PTPP

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Analisa Saham BBTN dan PTPP

Bank Tabungan Negara (BBTN IJ): NEUTRAL: Softer 2H19 Outlook

(Henry Wibowo, Ghibran Al Imran – RHB Research)

Transfer of coverage: Stay NEUTRAL with IDR2,150 TP, 12% downside. 5M19 earnings growth accelerated to 9.1% (4M19: 7.9%), as provisions declined 4.7% (4M19: +4.7%). Loan growth remained high at 19%, but management guided for a weaker target of 10-12% on lower government housing budget. Additionally, overhang from a potential acquisition of Bukopin Syariah may impact negatively. Our Top Picks within Indonesia banks are BBRI, BMRI, and BBNI. This report marks a transfer of coverage to Henry Wibowo.

Earnings growth accelerated to 9% as provisioning trend improved; NIM continued to decline to 3.3%. 5M19 bank-only net profit was IDR1trn, up 9.1% YoY, a slight acceleration from 7.9% in 4M19, as provisions saw a decline of 4.7% YoY (vs +4.7% YoY in 4M18). Nonetheless, this accounted for merely 32% of our FY19F, which is not far from consensus. Credit costs have improved to 0.4% from 0.8% in 1M19. NII was down by 3.3% YoY (4M19:        -2.3% YoY), as interest expenses rose faster (+36.3% YoY) than interest income (+18.7% YoY). Cost of funds remained high at 6.4% due to its high time deposit (TD) portion. This brought NIM down to 3.3% from 3.4% in 4M19.

Loan growth trend in May remained strong but expect deceleration in 2H19. Loans saw strong growth of 19.1% YoY to IDR249trn (4M19: +19.3% YoY) likely supported by the mortgage segment (75% of total). Still, the lower budget for housing by the Government of IDR26.5trn (-8% YoY) indicates lower loan growth for the bank. Management has since lowered loan growth target to 10-12% YoY from 13-15%.

Strong deposit growth fuelled by expensive TD; LDR remained elevated at 114%. Deposits grew 16.1% YoY in 5M19 to IDR218trn. Despite the strong growth, LDR was still elevated at 114%, and among the highest under our coverage. To increase its liquidity, the bank has been increasing its TD portion (currently 57% of total vs 49% in 5M18). TD growth was 33.8% YoY, while CASA contracted 1.1%. The result is higher cost of funds at 6.4%, much higher than 5.6% in 5M18. If the rate cut happens next month, Bank Tabungan Negara should be one of the biggest beneficiaries, as cost of funds is likely to go down first, easing its costs from the expensive TD portion.

Additional overhang may come from Bukopin Syariah acquisition. BTN is reportedly interested to grow its shariah subsidiary, BTN Syariah, by acquiring Bank Syariah Bukopin – targeted by 2020. Although it is still early days, the potential acquisition may create an overhang on the stock price from the valuation and target asset quality perspective.

Maintain NEUTRAL with IDR2,150 TP, set at 0.8x FY19F P/BV of IDR2,542, or -1SD from its 5-year mean. The stock is currently trading attractively at 1x P/BV, but we believe de-rating pressure might persist amid rising provision, and potential right issue concerns on IFRS 9 preparation in 2020.

Link to report:

Indonesia - [ PTPP IJ]: Bulky Contracts Inflow Kicks Off; BUY

Andrey WIJAYA, Ja’far SAIFUDDIN - RHB Sekuritas

♦ BUY, IDR2,800 TP (9.1x-7.8x FY19-20F P/Es), 33% upside with 2% FY19F yield.

♦ PTPP recently secured the Semarang-Demak toll road and ferronickel smelter projects, and invested in a mixed-use building.

♦ YT-May, it has won IDR11.4trn in new contracts ( 23% of full-year target) – and expects more to come.

♦ It signed a MOU with Hyundai Engineering & Construction, to explore opportunities in developing Indonesia’s new capital.

♦ Its balance sheet is the healthiest, with the strongest cash position among the construction companies we cover.

Link to report: