CIMB BNBR Company update - The next chapter

(BNBR IJ / BNBR.JK, TRADING BUY - Maintained, Rp89 - Tgt. Rp96, Conglomerates)

Over two quarters, BNBR has slashed its debt by about two-thirds, at the expense of diluting its stakes in subsidiaries, notably in BUMI from 35% to 16.3%. This was, nevertheless, quite an achievement, given volatile capital markets. BNBR needs to address funding sources should it be keen to recover lost assets or add businesses. Near-term share-price catalysts beyond debt restructuring are limited. With its discount to NAV narrowing, BNBR is no longer as compelling a proxy for Bakrie Group assets. BUMI is more attractive. Our revised NAV and target price are now Rp96, up from Rp70, adjusting for lower debt and higher valuation for subsidiaries.