CIMB Bank Mandiri Quick takes – A 'win-win' proposal

Bank Mandiri
Quick takes – A 'win-win' proposal - by Mulya Chandra CFA
(BMRI IJ / BMRI.JK, OUTPERFORM - Maintained, Rp2,350 - Tgt. Rp3,450, Financial Services)

Mandiri is proposing a 7% share divestment in order to qualify for a 5% tax-reduction incentive. A combination of pre-emptive rights and private placement would be a win-win way of achieving this, in our opinion. By that, Mandiri could benefit from a lower tax and fresh capital. The government could receive divestment proceeds while minorities would benefit from EPS accretion. We view the proposal positively. Maintain Outperform and DDM-based target price of Rp3,450.