· XL Axiata is optimistic it will book 40mn of total subscribers, which will make it hold the second largest position in Indonesia. The company has increased its target from its original expectation of 36mn subs as the company’s 9M10 data showed total subscribers of 38.5mn.
· The company has allocated US$450mn for 2010F capex in order to boost its subscribers where the company is currently supported by 21,650 units of BTS to serve its consumers.
· EXCL is trading at 2011F consensus PER of 13.7x and EV/EBITDA of 5.8x.
Tampilkan postingan dengan label Rp5. Tampilkan semua postingan
Tampilkan postingan dengan label Rp5. Tampilkan semua postingan
Senin, 11 Oktober 2010
Minggu, 26 September 2010
Danareksa Indofood Sukses Makmur (INDF IJ, Rp5,400 BUY) Riding the ICBP listing
BUY, TP raised to Rp6,000
While we believe some of the positives are already in the price, we continue to like INDF for its exposure to domestic consumption and because of potential recovery in commodity prices; hence our BUY recommendation. The stock has done well of late – gaining 11% in just 2 weeks – moving higher on account of the recent IPO price indication of ICBP. Indeed, the premium valuation of ICBP – at around 22.9-20.9x P/E 10-11F would create scope for trading arbitrage. The valuation gap, we think, should be narrowing further. Our TP already takes into consideration the imminent ICBP listing, which in a way also leads to a 2-3% dilution in our FY10-11F EPS estimates. Higher minority interest, although largely offset by greater royalty income received and lower interest expenses, explains our lower EPS. Valuation upside, however, still exists with INDF’s PE/ROE ratio still around 0.5x for FY11F, below the industry’s average of 0.7x.
ICBP: nearing the top-end
ICBP, the company’s branded consumer subsidiary, is priced at Rp5,395/share, near the top range of its fair value. It is about 22.9-20.9x FY10-11F, above INDF’s current valuation and also that of the consumer sector (excluding Unilever), which is currently trading at 18.4-16.2x and 19.7-17.0x P/E10-11F. ICBP’s IPO will basically raise some Rp6.3trn, of which around Rp4.1trn shall be used to repay shareholder loans – due at YE10, with the balance for expansion purposes. Net cash will be maintained, as a consequence. The expansion, which will cost the company around Rp1.8trn, could easily be financed, should there be any additional costs incurred. In fact, with the current net cash, we may see some potential acquisitions take place going forward. The imminent listing of ICBP will lower INDF’s net gearing to 0.5x this year from currently 1.0x (excluding the minority).
Minimal earnings dilution in 2010-11F
Earnings dilution due to the ICBP listing would be around 2-3% for FY10-11F, according to our estimates. The minority interest increase shall largely be offset by royalty fees and a reduction in interest expenses. Note that ICBP should pay royalty fees to Indofood for brands usage (except dairy) – amounting to 1.5% of sales, aside from a management fee of 0.25% from ICBP’s net sales. For FY10F, we estimate royalty and management fees of around Rp175bn, hence additional minority interest of around Rp70bn – or 1.7% earnings dilution. While for FY11F, we estimate a reduction in interest expenses of some Rp300bn, translating into 2.9% dilution. This assumes the full amount of Rp4.1tn obtained by Indofood will be used for de-leveraging purposes.
Flour price may surge 10-15% in 4Q10
While ICBP is remarkably profitable, margins may be squeezed slightly in the following quarters as: 1) Bogasari has indicated 10-15% selling price increases after the Idul Fitri celebrations, according to our channel check, 2) cost pressures still persist as wheat production remains low. The production forecast dropped significantly for the EU-27 and Russia, albeit partly offset by increases for Canada, Morocco, and Moldova. The wheat price, according to USDA, is projected at US$4.95-5.65/bushel, up from US$4.70-5.50/bushel last month. As such, the noodle operating margin would be around 13.6% as of YE10, according to our estimates, down from 15.5% in 1H10. The flour division, on the other hand, could deliver an operating margin of 13.5% in YE10, or above its historical range of 8-11%.
While we believe some of the positives are already in the price, we continue to like INDF for its exposure to domestic consumption and because of potential recovery in commodity prices; hence our BUY recommendation. The stock has done well of late – gaining 11% in just 2 weeks – moving higher on account of the recent IPO price indication of ICBP. Indeed, the premium valuation of ICBP – at around 22.9-20.9x P/E 10-11F would create scope for trading arbitrage. The valuation gap, we think, should be narrowing further. Our TP already takes into consideration the imminent ICBP listing, which in a way also leads to a 2-3% dilution in our FY10-11F EPS estimates. Higher minority interest, although largely offset by greater royalty income received and lower interest expenses, explains our lower EPS. Valuation upside, however, still exists with INDF’s PE/ROE ratio still around 0.5x for FY11F, below the industry’s average of 0.7x.
ICBP: nearing the top-end
ICBP, the company’s branded consumer subsidiary, is priced at Rp5,395/share, near the top range of its fair value. It is about 22.9-20.9x FY10-11F, above INDF’s current valuation and also that of the consumer sector (excluding Unilever), which is currently trading at 18.4-16.2x and 19.7-17.0x P/E10-11F. ICBP’s IPO will basically raise some Rp6.3trn, of which around Rp4.1trn shall be used to repay shareholder loans – due at YE10, with the balance for expansion purposes. Net cash will be maintained, as a consequence. The expansion, which will cost the company around Rp1.8trn, could easily be financed, should there be any additional costs incurred. In fact, with the current net cash, we may see some potential acquisitions take place going forward. The imminent listing of ICBP will lower INDF’s net gearing to 0.5x this year from currently 1.0x (excluding the minority).
Minimal earnings dilution in 2010-11F
Earnings dilution due to the ICBP listing would be around 2-3% for FY10-11F, according to our estimates. The minority interest increase shall largely be offset by royalty fees and a reduction in interest expenses. Note that ICBP should pay royalty fees to Indofood for brands usage (except dairy) – amounting to 1.5% of sales, aside from a management fee of 0.25% from ICBP’s net sales. For FY10F, we estimate royalty and management fees of around Rp175bn, hence additional minority interest of around Rp70bn – or 1.7% earnings dilution. While for FY11F, we estimate a reduction in interest expenses of some Rp300bn, translating into 2.9% dilution. This assumes the full amount of Rp4.1tn obtained by Indofood will be used for de-leveraging purposes.
Flour price may surge 10-15% in 4Q10
While ICBP is remarkably profitable, margins may be squeezed slightly in the following quarters as: 1) Bogasari has indicated 10-15% selling price increases after the Idul Fitri celebrations, according to our channel check, 2) cost pressures still persist as wheat production remains low. The production forecast dropped significantly for the EU-27 and Russia, albeit partly offset by increases for Canada, Morocco, and Moldova. The wheat price, according to USDA, is projected at US$4.95-5.65/bushel, up from US$4.70-5.50/bushel last month. As such, the noodle operating margin would be around 13.6% as of YE10, according to our estimates, down from 15.5% in 1H10. The flour division, on the other hand, could deliver an operating margin of 13.5% in YE10, or above its historical range of 8-11%.
Mandiri Sekuritas XL Axiata increase frequency capacity to 2x10MHz 3G (EXCL, Buy, Rp5,550, Buy, TP: Rp5,900)
According to news released by EXCL’s investor relations, the company has received an approval from minister of communication and telecommunication for its second 3G carrier. With this approval, XL will obtained consecutive 2x10MHz 3G carrier (1960-1970 MHz /2150-2160 MHz), EXCL only had 2x5 MHz 3G previously. In accordance with Decree No. 322/KEP/M.KOMINFO/09/2010, XL should pay an upfront fee in the amount of Rp327.6bn while the annual fee will be Rp.160 billion. Under the payment scheme configured, the upfront fee will be charged on this year and will be amortize for 10 years, meanwhile annual fee for the first year only charged 20% or around Rp32bn.
Mandiri Sekuritas XL Axiata obtained Rp2.5tn debt (EXCL, Rp5,600, Buy, TP: Rp5,900)
EXCL obtained Rp2.5tn worth of debt from Bank Mandiri that will be used to refinance debt and to finance working capital. The 5 years debt carried interest rate of 1.4% above JIBOR. EXCL will pay its debt from Export Kredit Namden (EKN) worth US$265.2mn. In 1H10 EXCL had repaid its debt worth US$219mn and Rp900bn using its internal cash. EXCL has debt amounting to Rp11.4tn at end Jun10.
Rabu, 25 Agustus 2010
Danareksa Bank Danamon (BDMN IJ, Rp5,350 BUY) Strong mass market profitability
Remaining very profitable
We trim our FY11-12E earnings estimates, taking account of the imminent bond issuance and the slightly lower 3-year loans growth to stay aligned with the deposits growth. This year’s forecast, however, is intact. The bank’s 1H results were not a surprise at all. Most of the gains are largely due to strong mass-market loans growth, aside from the absence of derivatives provisioning. The NIM stayed at an impressive 11.6% and is likely to increase in 2H, as efforts to tackle high cost funding shall reduce the COF. Meanwhile, the ROE improved to 19% despite the bank’s high capitalization. BDMN remains our top pick in the banking sector given its strong capital base, robust NIM in excess of 11% (post adjustment of PSAK 50/55), and sustainable loans growth. Its exposure to domestic consumption growth shall also ensure that our 38% 3-yr CAGR EPS growth estimate will be met. We set our 12-mth DDM TP at Rp6,850 or 3.0x FY11 PBV. BUY maintained.
The power of the mass market
Our loans growth estimate is still 21% for 2010, a figure that can easily be achieved. Thus far, BDMN’s loans have grown by about 12%, thanks to the bank’s staggering 28% YoY loans growth in the mass market. This segment has accounted for 56% of the total loans portfolio - and will likely stay at this level for the remainder of the year. Loans expansion is seen in all segments, with the exception of retail loans - which only contribute about 7% of the bank’s total loans portfolio. BDMN’s strategy, however, remains in place; that is to grow its consumer loans, a segment that could generate a very healthy NIM of 18-20% and an asset yield above 18% - allowing BDMN to compensate for its high COF and operating risks. Moreover, we do not exclude the possibility that the bank will also grow its corporate loans, as they are needed to boost the bank’s cross-selling activities.
Reducing its COF
The bank’s COF has continued to decline. It dropped to 5.4% in 2Q10, down from its peak of 8.39% in 1Q09, mainly due to a higher proportion of CASA – some 39%, aside from re-pricing of expensive time deposits. On a year-to-date basis, CASA has grown by as much as 16.5% thanks to the bank’s innovative products and infrastructure improvements. This includes expansion of its ATM network – around 250 ATMs this year – as well as adding new branches and transactional facilities. However, the overall deposits growth has been unexciting so far. This also suggests that the bank’s search for funding may potentially tilt towards high cost time deposits. Funding has become critical, as the LDR reached 99% in 1H10. Meanwhile, the bank’s imminent Rp5trn bond issuance will only secure next year’s loans growth. Hence, the proportion of CASA is likely to decline in 2H10. Our forecast assumes the proportion of CASA stays at 30% this year, before increasing to 35% next year.
Better loan quality
Our gross NPLs estimate remains at 3.1% at year-end. 1H10 NPLs reached 3.4%, down from 1Q10’s 4.0%, consistent with the economic upturn. The mass market still contributes the largest NPLs – some 48% of the total NPLs - or NPLs of 1.6% - yet lower than 1Q10’s 1.7%. This is not so much due to write-offs, the management believes, but more on the recovery of bad debts. Indeed, the proportion in the special mention category increased to 10.6% of total loans, suggesting loan upgrades were more likely than not. The cost of credit has been relatively unchanged on a QoQ basis, but is likely to see a reversal toward the end of the year.
1H10 Key highlights:
1H10 NPAT hit Rp1.4trn, +65% YoY thanks to higher fee based income aside from the absence of extraordinary items related to derivative transactions. On a QoQ basis, earnings actually grew by 4% QoQ, supported by a slight decline in the cost of credit and fees related to credit. Loans growth has picked up, reaching 10% QoQ.
The NIM eased to 11.6% from 4Q09’s 13.4%, largely due to reclassification of acquisition costs from previously “deducting fee income” to now “deducting interest income”. NPLs improved slightly to 3.4% from 1Q10’s 4.0%, with the micro lending business contributing most of the NPLs. Provisioning coverage is almost 100%.
CAR is strong at 19.5% as of 2Q10 prior to implementation of Basel II operational risk. With operational risk, CAR is about 18%. Meanwhile, ROAE improved to 19.3% from 1Q10’s 18.0%.
In short, no surprises. Worth noting, however, is reclassification related to implementation of IFRS. This has led to a decline in interest income, hence its asset yield. Indeed, the asset yield dropped by 150bps from 4Q09’s 18.3%, more than offsetting the 60bps decline in the quarterly COF. NIM therefore eased, although it was still higher than 2Q09’s 10.8%. As for the remainder of the year, the bank’s guidance is for an 11-12% NIM.
Profitability is strong, with the company posting its largest ever quarterly profits. Derivative-related provisioning is no longer an issue, with the company now seeing a huge jump in ROE, despite last year’s rights issue. All in all, the bank is looking for 20% ROE by the end of the year.
Higher profits were also thanks to the slightly lower cost of credit of Rp562bn in 2Q10, or down from 1Q10’s Rp578bn. This is despite a higher cost-to-income ratio of 50.8% compared to 1Q10’s 47.5%. Note that the cost of credit related to the mass-market business declined, even though the bank aggressively grew its mass-market business– an effective and efficient strategy.
Loans growth improved. Growth was seen in all segments, with the exception of retail loans. Mass market loans saw a 12% QoQ increase, backed by strong auto financing and micro lending. This segment now accounts for 56% of the bank’s total loans portfolio. The idea is that the bank sustains its high asset yields with longer duration.
Funding could still be a concern in the near term, we believe. Deposits have not grown as expected, despite their better structure. Yes, CASA now represents around 39% of the total deposits thanks to retirement of costly deposits amid improving liquidity. But this will not last, especially since the LDR has reached 99%. Hence, we expect the proportion of time deposits to increase in the next 1-2 quarters. Note that deposits account for 89% of BDMN’s total funding. The rest comes from bonds, REPO and other LT borrowings.
We trim our FY11-12E earnings estimates, taking account of the imminent bond issuance and the slightly lower 3-year loans growth to stay aligned with the deposits growth. This year’s forecast, however, is intact. The bank’s 1H results were not a surprise at all. Most of the gains are largely due to strong mass-market loans growth, aside from the absence of derivatives provisioning. The NIM stayed at an impressive 11.6% and is likely to increase in 2H, as efforts to tackle high cost funding shall reduce the COF. Meanwhile, the ROE improved to 19% despite the bank’s high capitalization. BDMN remains our top pick in the banking sector given its strong capital base, robust NIM in excess of 11% (post adjustment of PSAK 50/55), and sustainable loans growth. Its exposure to domestic consumption growth shall also ensure that our 38% 3-yr CAGR EPS growth estimate will be met. We set our 12-mth DDM TP at Rp6,850 or 3.0x FY11 PBV. BUY maintained.
The power of the mass market
Our loans growth estimate is still 21% for 2010, a figure that can easily be achieved. Thus far, BDMN’s loans have grown by about 12%, thanks to the bank’s staggering 28% YoY loans growth in the mass market. This segment has accounted for 56% of the total loans portfolio - and will likely stay at this level for the remainder of the year. Loans expansion is seen in all segments, with the exception of retail loans - which only contribute about 7% of the bank’s total loans portfolio. BDMN’s strategy, however, remains in place; that is to grow its consumer loans, a segment that could generate a very healthy NIM of 18-20% and an asset yield above 18% - allowing BDMN to compensate for its high COF and operating risks. Moreover, we do not exclude the possibility that the bank will also grow its corporate loans, as they are needed to boost the bank’s cross-selling activities.
Reducing its COF
The bank’s COF has continued to decline. It dropped to 5.4% in 2Q10, down from its peak of 8.39% in 1Q09, mainly due to a higher proportion of CASA – some 39%, aside from re-pricing of expensive time deposits. On a year-to-date basis, CASA has grown by as much as 16.5% thanks to the bank’s innovative products and infrastructure improvements. This includes expansion of its ATM network – around 250 ATMs this year – as well as adding new branches and transactional facilities. However, the overall deposits growth has been unexciting so far. This also suggests that the bank’s search for funding may potentially tilt towards high cost time deposits. Funding has become critical, as the LDR reached 99% in 1H10. Meanwhile, the bank’s imminent Rp5trn bond issuance will only secure next year’s loans growth. Hence, the proportion of CASA is likely to decline in 2H10. Our forecast assumes the proportion of CASA stays at 30% this year, before increasing to 35% next year.
Better loan quality
Our gross NPLs estimate remains at 3.1% at year-end. 1H10 NPLs reached 3.4%, down from 1Q10’s 4.0%, consistent with the economic upturn. The mass market still contributes the largest NPLs – some 48% of the total NPLs - or NPLs of 1.6% - yet lower than 1Q10’s 1.7%. This is not so much due to write-offs, the management believes, but more on the recovery of bad debts. Indeed, the proportion in the special mention category increased to 10.6% of total loans, suggesting loan upgrades were more likely than not. The cost of credit has been relatively unchanged on a QoQ basis, but is likely to see a reversal toward the end of the year.
1H10 Key highlights:
1H10 NPAT hit Rp1.4trn, +65% YoY thanks to higher fee based income aside from the absence of extraordinary items related to derivative transactions. On a QoQ basis, earnings actually grew by 4% QoQ, supported by a slight decline in the cost of credit and fees related to credit. Loans growth has picked up, reaching 10% QoQ.
The NIM eased to 11.6% from 4Q09’s 13.4%, largely due to reclassification of acquisition costs from previously “deducting fee income” to now “deducting interest income”. NPLs improved slightly to 3.4% from 1Q10’s 4.0%, with the micro lending business contributing most of the NPLs. Provisioning coverage is almost 100%.
CAR is strong at 19.5% as of 2Q10 prior to implementation of Basel II operational risk. With operational risk, CAR is about 18%. Meanwhile, ROAE improved to 19.3% from 1Q10’s 18.0%.
In short, no surprises. Worth noting, however, is reclassification related to implementation of IFRS. This has led to a decline in interest income, hence its asset yield. Indeed, the asset yield dropped by 150bps from 4Q09’s 18.3%, more than offsetting the 60bps decline in the quarterly COF. NIM therefore eased, although it was still higher than 2Q09’s 10.8%. As for the remainder of the year, the bank’s guidance is for an 11-12% NIM.
Profitability is strong, with the company posting its largest ever quarterly profits. Derivative-related provisioning is no longer an issue, with the company now seeing a huge jump in ROE, despite last year’s rights issue. All in all, the bank is looking for 20% ROE by the end of the year.
Higher profits were also thanks to the slightly lower cost of credit of Rp562bn in 2Q10, or down from 1Q10’s Rp578bn. This is despite a higher cost-to-income ratio of 50.8% compared to 1Q10’s 47.5%. Note that the cost of credit related to the mass-market business declined, even though the bank aggressively grew its mass-market business– an effective and efficient strategy.
Loans growth improved. Growth was seen in all segments, with the exception of retail loans. Mass market loans saw a 12% QoQ increase, backed by strong auto financing and micro lending. This segment now accounts for 56% of the bank’s total loans portfolio. The idea is that the bank sustains its high asset yields with longer duration.
Funding could still be a concern in the near term, we believe. Deposits have not grown as expected, despite their better structure. Yes, CASA now represents around 39% of the total deposits thanks to retirement of costly deposits amid improving liquidity. But this will not last, especially since the LDR has reached 99%. Hence, we expect the proportion of time deposits to increase in the next 1-2 quarters. Note that deposits account for 89% of BDMN’s total funding. The rest comes from bonds, REPO and other LT borrowings.
NISP Danamon net income boosted by 64.7% YoY (BDMN, Rp5,350)
• In 1H10, Bank Danamon’s net income was boosted by 64.7 % to Rp1.43tn. This satisfied consensus as it accounted for 50.6% of 2010F full year expectation. The company’s operating income was up by 20.5% to Rp6.42tn from Rp5.33tn. This year, Danamon did not book any provisions and cost of unwinding foreign exchange transactions, in contrast to last year where Rp152.0bn was deducted from net profit after tax.
• Total loans grew by 15.4% YoY to Rp 71.07tn boosted by strong growth in mass market segment (28.0% YoY). The mass market segment’s biggest contributor, Adira Finance, grew by 43.4% YoY thanks to growth in 4W and 2W financing, with total loans reaching Rp24.18tn in 1H10. While Danamon Simpan Pinjam, which targets market traders, grew at a healty19.9%% to Rp13.74tn.
• Management managed to raise total CASA by 31% to account for 39% of total deposits. As a result, the company’s Net Interest Margin showed good performance by increasing to 11.6% from 10.0% in 1H09, while Cost to Income Ratio improved to 49.2%. Gross NPL was flat at 3.4% from 3.5% a year ago.
• On a quarterly basis, loans grew 10.3% in the second quarter, making YTD growth of 12.0%. The bank believes it can achieve its full year target for loans growth at 20.0% for this year, as domestic economic growth positively affects its main target which are self-employed and SME.
• BDMN is trading at 2011F consensus PER of 12.7x and PBV of 2.3x.
• Total loans grew by 15.4% YoY to Rp 71.07tn boosted by strong growth in mass market segment (28.0% YoY). The mass market segment’s biggest contributor, Adira Finance, grew by 43.4% YoY thanks to growth in 4W and 2W financing, with total loans reaching Rp24.18tn in 1H10. While Danamon Simpan Pinjam, which targets market traders, grew at a healty19.9%% to Rp13.74tn.
• Management managed to raise total CASA by 31% to account for 39% of total deposits. As a result, the company’s Net Interest Margin showed good performance by increasing to 11.6% from 10.0% in 1H09, while Cost to Income Ratio improved to 49.2%. Gross NPL was flat at 3.4% from 3.5% a year ago.
• On a quarterly basis, loans grew 10.3% in the second quarter, making YTD growth of 12.0%. The bank believes it can achieve its full year target for loans growth at 20.0% for this year, as domestic economic growth positively affects its main target which are self-employed and SME.
• BDMN is trading at 2011F consensus PER of 12.7x and PBV of 2.3x.
Senin, 23 Agustus 2010
Mansek Bank Danamon:1H10 results above our expectation,yet inline with consensus estimates (BDMN,Rp5,350,Neutral,TP:Rp,4,900)
Bank Danamon reported net profit of Rp1.4tn in 1H10,above our expectation,yet inline with consensus estimates.The bank reported lower than expected provisioning expenses enabled by improvement in NPL.In terms of Pre-provision operating profit (PPOP),the bank ’s financial result was actually in line with our expectation.
The bank ’s loans improved by 10%qoq in 2Q10 to Rp71.1tn with wholesale and massmarket segment posted the highest loan growth of 14%qoq and 12%qoq respectively.Despite srong growth in wholesale segment,mass market still dominated the total loans (56%of total loans at end Jun10). This allowed the bank to maintain a high NIM of 11.6%in 1H10,the highest in the sector.
The bank targets loans to grow by 20%yoy this year and believed that it will be achieved.
At the current price,the stock is trading at 2011F P/BV of 2.3x and PER of 13.0x,We are currently reviewing our forecast on the bank.
The bank ’s loans improved by 10%qoq in 2Q10 to Rp71.1tn with wholesale and massmarket segment posted the highest loan growth of 14%qoq and 12%qoq respectively.Despite srong growth in wholesale segment,mass market still dominated the total loans (56%of total loans at end Jun10). This allowed the bank to maintain a high NIM of 11.6%in 1H10,the highest in the sector.
The bank targets loans to grow by 20%yoy this year and believed that it will be achieved.
At the current price,the stock is trading at 2011F P/BV of 2.3x and PER of 13.0x,We are currently reviewing our forecast on the bank.
Sabtu, 31 Juli 2010
Mandiri Sekuritas Hexindo Adiperkasa: 1Q10 net income is in line with ours and consensus (HEXA, Rp5,950, Buy, TP: Rp3,600)
On AGM held yesterday, the company decided to disburse dividend amounting to USD12.2mn (35.8% of FY09 net income) or equal to US$0.0145/share or around Rp130.5 (rate Rp9,000/US$); it reflects dividend yield of 2.2%. HEXA booked FY09 net income of US$34.0mn.
The company booked 1Q10 revenues (Apr-Jun’10) of US$123.5mn (+132.3%yoy), a major portion of which was derived from the sale of heavy machineries amounting US$82mn (66.4% of total sales). Meanwhile net income was at US$9.2mn.
We have a Buy recommendation on HEXA; it trades at PER10F of 14.1x.
The company booked 1Q10 revenues (Apr-Jun’10) of US$123.5mn (+132.3%yoy), a major portion of which was derived from the sale of heavy machineries amounting US$82mn (66.4% of total sales). Meanwhile net income was at US$9.2mn.
We have a Buy recommendation on HEXA; it trades at PER10F of 14.1x.
Kamis, 13 Mei 2010
NISP Indosat to issue US$500mn global bonds (ISAT, Rp5,600)
• Indosat shared its plan to issue US$500mn of global bonds in order to support the company’s capex this year. The company sets a lower capex of around US$500mn in contrast with US$700mn in 2009. In 2010, Indosat has to repay its maturing loans of Rp4.5tn this year that may affect the company’s budget on capex.
• It is reported that Indosat has appointed three underwriters to support the issuance and this plan has already been submitted to Bapepam.
• ISAT is trading at 2010F consensus PER of 17.6x and EV/EBITDA of 5.2x.
• It is reported that Indosat has appointed three underwriters to support the issuance and this plan has already been submitted to Bapepam.
• ISAT is trading at 2010F consensus PER of 17.6x and EV/EBITDA of 5.2x.
Selasa, 11 Mei 2010
NISP Indosat net income more than doubles in the first quarter (ISAT, Rp5,600)
• Indosat CEO, Mr. Harry Sasongko, hinted that Indosat managed to book net income of Rp258.9bn during the 1Q10, which was 139.2% higher than Rp119.5bn achieved during 1Q09. Revenue is up slightly by 5.1% to Rp4.73tn from Rp4.50tn, with 75% of revenue from cellular. Consensus full-year expectation for net income and revenue was Rp1,694.8bn and Rp20.51tn.
• The company budgets 70% of the total US$550-700mn of capex for infrastructure development, among them to modernize network and telecommunication equipment.
• ISAT is trading at 2010F consensus PER of 17.6x and EV/EBITDA of 5.3x.
• The company budgets 70% of the total US$550-700mn of capex for infrastructure development, among them to modernize network and telecommunication equipment.
• ISAT is trading at 2010F consensus PER of 17.6x and EV/EBITDA of 5.3x.
Kamis, 06 Mei 2010
Mandiri Sekuritas Mayora Indah: 1Q10 net profit of Rp119bn, above ours and consensus estimates (MYOR, Rp5,000, Buy, TP: Rp5,000)
MYOR posted 1Q10 net income of Rp119bn (+67%yoy, +14%qoq), slightly above ours and consensus FY10F estimates.
Net income growth was mainly due to revenue growth of 27%yoy and 26%qoq. Lower qoq margin was mainly due to rising sugar price (+8.9%qoq) that constitute 25% of the company’s COGS. While higher yoy margin was due to Rupiah sharp appreciation.
1Q10 net income even surpassed 3Q09 net income where most consumer goods companies reached its peak quarterly profit due to Moslem festive.
We still maintain Buy recommendation on MYOR which currently is trading at PER10-11F of 9.5-8.8x, respectively.
Net income growth was mainly due to revenue growth of 27%yoy and 26%qoq. Lower qoq margin was mainly due to rising sugar price (+8.9%qoq) that constitute 25% of the company’s COGS. While higher yoy margin was due to Rupiah sharp appreciation.
1Q10 net income even surpassed 3Q09 net income where most consumer goods companies reached its peak quarterly profit due to Moslem festive.
We still maintain Buy recommendation on MYOR which currently is trading at PER10-11F of 9.5-8.8x, respectively.
Minggu, 02 Mei 2010
NISP Bank Danamon to distribute Rp766.3bn of dividend (BDMN, Rp5,650)
• Bank Danamon will distribute Rp766.3bn as dividend or equal to Rp90.97/share with a dividend payout ratio of 50%. This plan has been approved by the shareholders in the bank’s AGM yesterday.
• Shareholders also appointed Mr. Henry Ho as a president director, replacing Sebastian Paredes. Mr. Henry Ho, formerly president of Bank International Indonesia (BNII, Rp305), resigned in 2009 after Malayan Banking Bhd acquired controlling stakes on Danamon from Temasek.
• BDMN is trading at 2010F consensus PER of 17.0x and PBV of 2.7x.
• Shareholders also appointed Mr. Henry Ho as a president director, replacing Sebastian Paredes. Mr. Henry Ho, formerly president of Bank International Indonesia (BNII, Rp305), resigned in 2009 after Malayan Banking Bhd acquired controlling stakes on Danamon from Temasek.
• BDMN is trading at 2010F consensus PER of 17.0x and PBV of 2.7x.
NISP Bank BCA records 18.3% YoY growth in 1Q10 net income (BBCA, Rp5,450)
• During 1Q10 BCA posts Rp1.9tn of net income, 18.3% YoY higher from Rp1.6tn in 1Q09. The figure came in at 23.8% of the consensus’s full year expectation of Rp8.0tn. Such increase in revenue was mostly driven by a reversal in provision expense of Rp303bn compared to a provisioning of Rp863bn in 1Q09.
• The company’s net interest income decreased by 25.2% YoY to Rp2.9tn from Rp3.8tn in 1Q09 due to new accounting standard that requires the bank to post interest income from SBI (trading account) in other income. As such, the bank’s other operating income rose to Rp1.9tn, 87.1% YoY higher from Rp1.0tn in 1Q09.
• The bank’s loans grew by 12.7% YoY to Rp120.9tn and BCA managed to improve its loans quality where NPL decreased to 0.8% in 1Q10 from 1.6% a year earlier.
• Meanwhile, TPF rose by 15.6% YoY to Rp242.2tn, mostly driven by growth in saving deposits that rose by Rp12tn to Rp122.3tn (+11.1% YoY) and time deposits that rose to Rp66.3tn from Rp54.0tn or increased by 23.0% YoY.
• The bank’s NIM decreased to 5.5% from 7.0% amid lower interest rate condition
that lowered the bank’s yield on assets.
• BBCA is trading at 2010F consensus PER of 16.7x and PBV of 4.2x.
• The company’s net interest income decreased by 25.2% YoY to Rp2.9tn from Rp3.8tn in 1Q09 due to new accounting standard that requires the bank to post interest income from SBI (trading account) in other income. As such, the bank’s other operating income rose to Rp1.9tn, 87.1% YoY higher from Rp1.0tn in 1Q09.
• The bank’s loans grew by 12.7% YoY to Rp120.9tn and BCA managed to improve its loans quality where NPL decreased to 0.8% in 1Q10 from 1.6% a year earlier.
• Meanwhile, TPF rose by 15.6% YoY to Rp242.2tn, mostly driven by growth in saving deposits that rose by Rp12tn to Rp122.3tn (+11.1% YoY) and time deposits that rose to Rp66.3tn from Rp54.0tn or increased by 23.0% YoY.
• The bank’s NIM decreased to 5.5% from 7.0% amid lower interest rate condition
that lowered the bank’s yield on assets.
• BBCA is trading at 2010F consensus PER of 16.7x and PBV of 4.2x.
Mandiri Sekuritas Bank Central Asia: 1Q2010 net profit increased 18.3% yoy (BBCA, Rp5,450, Buy, TP: Rp5,400)
BBCA reported increase in net profit for its 1Q2010 by 18.3%yoy, to reach Rp1,93 bn, which slightly below our expectation (-5.4%) but in line with consensus estimates (-4.4%).
BBCA’s Net Interest Income dropped by 26.8% yoy to Rp2,867bn this quarter. However, the decline occurred, mainly due to SBIs’ income re-classification, which based on the newly PSAK 50-55 implementation, it is posted under Non-Interest Income, led the account jumped by 83.2% yoy to Rp1,903bn, on which SBIs income contributed Rp665 bn. The bank posted net provisioning reversal of Rp303bn, much resulted from repayment on impaired loans, assisted the operating income arrived at Rp2,393bn (+29.8% yoy). YTD NIM stood at 5.5% (vs 5.8% 1Q09), mainly due to lower yield where as in line with market trend.
BBCA booked gross loan of Rp120.9bn, a slight decline by 2.5%, where cyclicality took major role, despite marginal growth in the corporate sector as top tier corporate issued bonds over the period. However, consumer sector continued to be the front-liner growth of the bank, thanks to lower interest rates that boosted the bank’s mortgage lending (48.4% of total consumer lending). 1Q2010 LDR posted at 49.6% (vs. 50.3% FY09), while NPL 0.8%, CAR 17.5% and ROE 30.9% (vs. 0.7%, 15.3% and 31.8% FY09, respectively).
The bank is currently trading at P/BV10 4.2x and PER10 17.1x. We still call Buy on the counter.
BBCA’s Net Interest Income dropped by 26.8% yoy to Rp2,867bn this quarter. However, the decline occurred, mainly due to SBIs’ income re-classification, which based on the newly PSAK 50-55 implementation, it is posted under Non-Interest Income, led the account jumped by 83.2% yoy to Rp1,903bn, on which SBIs income contributed Rp665 bn. The bank posted net provisioning reversal of Rp303bn, much resulted from repayment on impaired loans, assisted the operating income arrived at Rp2,393bn (+29.8% yoy). YTD NIM stood at 5.5% (vs 5.8% 1Q09), mainly due to lower yield where as in line with market trend.
BBCA booked gross loan of Rp120.9bn, a slight decline by 2.5%, where cyclicality took major role, despite marginal growth in the corporate sector as top tier corporate issued bonds over the period. However, consumer sector continued to be the front-liner growth of the bank, thanks to lower interest rates that boosted the bank’s mortgage lending (48.4% of total consumer lending). 1Q2010 LDR posted at 49.6% (vs. 50.3% FY09), while NPL 0.8%, CAR 17.5% and ROE 30.9% (vs. 0.7%, 15.3% and 31.8% FY09, respectively).
The bank is currently trading at P/BV10 4.2x and PER10 17.1x. We still call Buy on the counter.
Rabu, 28 April 2010
Mandiri Sekuritas Bank Mandiri: 1Q2010 net profit jumped by 43.1% yoy (BMRI, Rp5,300, Not Rated)
Bank Mandiri reported a 43.1%yoy surge in net profits in 1Q10 to reach Rp2tn, in line with consensus estimates.
BMRI’s 1Q10 net interest income increased by 5.5% yoy, however, the bank managed to have operating income of Rp6tn (+8.0% yoy), driven by strong increase of Non-Interest Income by 17.4%, as fee based income surged by 30.9% yoy. Although the bank posted a positive NII, NIM ratio declined to 5.2% (vs. 5.5% 1Q09), mainly caused by the drop in FX loan yields, which has given the bank absorbed lower spread.
The bank maintained its NPL at low 2.6% (vs 2.6% FY09), despite a sustainable growth of gross loan (+2.4% qoq), which booked as upgrades and write-offs dominated the movements, led to provisioning recorded at moderate Rp692bn (-49.7%yoy). Coverage ratio remained high at 219.1%, while CAR is 17.0%, LDR 64.1% and ROE 30.1% (vs 15.6%, 59,2% and 21.8% FY09, respectively). In reporting its 1Q10, the bank’s management said that about 90% of the newly PSAK 50 – 55 reporting requirement has been met, and any remainder would not give any major impact on the books. At
present, BMRI is trading at P/BV10F of 2.8x and PER10F 13.4x. We do not have a recommendation on the stock.
BMRI’s 1Q10 net interest income increased by 5.5% yoy, however, the bank managed to have operating income of Rp6tn (+8.0% yoy), driven by strong increase of Non-Interest Income by 17.4%, as fee based income surged by 30.9% yoy. Although the bank posted a positive NII, NIM ratio declined to 5.2% (vs. 5.5% 1Q09), mainly caused by the drop in FX loan yields, which has given the bank absorbed lower spread.
The bank maintained its NPL at low 2.6% (vs 2.6% FY09), despite a sustainable growth of gross loan (+2.4% qoq), which booked as upgrades and write-offs dominated the movements, led to provisioning recorded at moderate Rp692bn (-49.7%yoy). Coverage ratio remained high at 219.1%, while CAR is 17.0%, LDR 64.1% and ROE 30.1% (vs 15.6%, 59,2% and 21.8% FY09, respectively). In reporting its 1Q10, the bank’s management said that about 90% of the newly PSAK 50 – 55 reporting requirement has been met, and any remainder would not give any major impact on the books. At
present, BMRI is trading at P/BV10F of 2.8x and PER10F 13.4x. We do not have a recommendation on the stock.
Kamis, 22 April 2010
Danareksa Bank Danamon (BDMN IJ, Rp5,500 BUY) Strong profits, loan growth still lacking
Headlines:
l 1Q10 NPAT rose 78% YoY to Rp701bn thanks to a 28% YoY increase in net interest income coupled with stringent and effective cost management. On a QoQ basis, the strong earnings are attributable to the absence of an extraordinary item related to derivative transactions –reaching Rp218bn in 4Q09 alone. Without derivative related provisions, NPAT grew 81% QoQ. Loans growth remains weak, however, with loans growing a mere 1% QoQ.
l The NIM eased to 12.6% from 4Q09’s 13.4%, largely due to reclassification of acquisition costs from previously deducting fee income to now deducting interest income. NPLs declined slightly to 4.0% from 4Q09’s 4.5%, with the largest NPLs still contributed by the micro lending business. Provisioning coverage remains above 100%.
l CAR is strong at 21.5% prior to implementation of the Basel II Accord on operational risk. With operational risk taken into account, the CAR declines by 1.76% to 19.7%. Meanwhile, the ROAE improved to 18.0% from 1Q09’s 14.4%.
Comments:
l In short, no surprises. Worth noting, however, is reclassification related to implementation of IFRS. This has led to a decline in interest income and hence the asset yield. Indeed, the asset yield dropped by 130bps from 4Q09’s 18.3%, more than offsetting the 60bps decline in quarterly COF. NIM therefore eased, although it is still higher than 1Q09’s 10%. As for the remainder of the year, the bank’s guidance is for NIM of around 11-12%.
l Profitability is strong, with the bank posting its largest ever quarterly profits. Derivative related provisions are no longer an issue and the bank posted a huge increase in ROE despite last year’s rights issue. All in all, the bank is looking for 20% ROE by the end of the year.
l Non-recurring items aside, higher profits are also attributable to a lower cost of credit of Rp578bn in 1Q10 compared to 4Q09’s Rp762bn besides better cost management that has led to a decline in the cost-to-income ratio to 48% from 4Q09’s 51%. Note that operating income related to the mass-market business increased by 2% YoY even though the bank aggressively grew its mass market business – an effective and efficient strategy.
l Loans growth is still lacking, but optimism remains. This year, the management is looking for 20% loans growth. Among the segments, growth was only seen in the mass market segment with the other segments showing a QoQ decline in loans growth. However, the prospects for further lending remain bright - especially for SME and commercial loans, according to the management. The mass-market business grew 5% QoQ, backed by strong auto financing and micro lending. It now accounts for 56% of the bank’s total loans portfolio. The idea is for the bank to sustain its high asset yields but with loans of a longer duration.
l Funding could be a concern in the near term, we believe. Deposits have not grown as expected, despite a better deposits structure. Yes, low cost CASA now represent around 35% of the total deposits thanks to retirement of costly deposits amidst improving liquidity. However, this may not last, especially since the LDR has reached 94%. As such we expect the proportion of time deposits to increase in the next 1-2 quarters before easing in the last quarters of the year. Note that deposits fund 89% of BDMN’s total lending. The remainder comes from bonds, REPO and other LT borrowings.
l We keep our forecast intact for now. BDMN remains our top pick in the sector given: 1) its strong capital base with the CAR expected to reach 19% by YE10, 2) a robust NIM in excess of 13% and 3) potentially solid loans growth post the clean-up of its balancesheet. Our DDM derived TP is Rp6,850, implying 3.3x-3.0x FY10-11E PBV.
l 1Q10 NPAT rose 78% YoY to Rp701bn thanks to a 28% YoY increase in net interest income coupled with stringent and effective cost management. On a QoQ basis, the strong earnings are attributable to the absence of an extraordinary item related to derivative transactions –reaching Rp218bn in 4Q09 alone. Without derivative related provisions, NPAT grew 81% QoQ. Loans growth remains weak, however, with loans growing a mere 1% QoQ.
l The NIM eased to 12.6% from 4Q09’s 13.4%, largely due to reclassification of acquisition costs from previously deducting fee income to now deducting interest income. NPLs declined slightly to 4.0% from 4Q09’s 4.5%, with the largest NPLs still contributed by the micro lending business. Provisioning coverage remains above 100%.
l CAR is strong at 21.5% prior to implementation of the Basel II Accord on operational risk. With operational risk taken into account, the CAR declines by 1.76% to 19.7%. Meanwhile, the ROAE improved to 18.0% from 1Q09’s 14.4%.
Comments:
l In short, no surprises. Worth noting, however, is reclassification related to implementation of IFRS. This has led to a decline in interest income and hence the asset yield. Indeed, the asset yield dropped by 130bps from 4Q09’s 18.3%, more than offsetting the 60bps decline in quarterly COF. NIM therefore eased, although it is still higher than 1Q09’s 10%. As for the remainder of the year, the bank’s guidance is for NIM of around 11-12%.
l Profitability is strong, with the bank posting its largest ever quarterly profits. Derivative related provisions are no longer an issue and the bank posted a huge increase in ROE despite last year’s rights issue. All in all, the bank is looking for 20% ROE by the end of the year.
l Non-recurring items aside, higher profits are also attributable to a lower cost of credit of Rp578bn in 1Q10 compared to 4Q09’s Rp762bn besides better cost management that has led to a decline in the cost-to-income ratio to 48% from 4Q09’s 51%. Note that operating income related to the mass-market business increased by 2% YoY even though the bank aggressively grew its mass market business – an effective and efficient strategy.
l Loans growth is still lacking, but optimism remains. This year, the management is looking for 20% loans growth. Among the segments, growth was only seen in the mass market segment with the other segments showing a QoQ decline in loans growth. However, the prospects for further lending remain bright - especially for SME and commercial loans, according to the management. The mass-market business grew 5% QoQ, backed by strong auto financing and micro lending. It now accounts for 56% of the bank’s total loans portfolio. The idea is for the bank to sustain its high asset yields but with loans of a longer duration.
l Funding could be a concern in the near term, we believe. Deposits have not grown as expected, despite a better deposits structure. Yes, low cost CASA now represent around 35% of the total deposits thanks to retirement of costly deposits amidst improving liquidity. However, this may not last, especially since the LDR has reached 94%. As such we expect the proportion of time deposits to increase in the next 1-2 quarters before easing in the last quarters of the year. Note that deposits fund 89% of BDMN’s total lending. The remainder comes from bonds, REPO and other LT borrowings.
l We keep our forecast intact for now. BDMN remains our top pick in the sector given: 1) its strong capital base with the CAR expected to reach 19% by YE10, 2) a robust NIM in excess of 13% and 3) potentially solid loans growth post the clean-up of its balancesheet. Our DDM derived TP is Rp6,850, implying 3.3x-3.0x FY10-11E PBV.
Mandiri Sekuritas BDMN 1Q2010 results ahead of our expectation (BDMN, Rp5,500 , Neutral, TP: Rp4,900)
Bank Danamon reported 1Q2010 earnings of Rp701 bn, a significant 78% yoy increase, led the result to above our expectation and within consensus estimates.
The strong bottom line figure, mainly contributed by strong increase of Net-Interest Income, which jumped to Rp2.923 bn (+26.6% yoy), as higher portion of mass market loan that gives better margin for the bank, led the operating income to Rp3,088 bn (+24% yoy).
The bank’s gross loan increased by only 1.5% qoq in the 1Q2010, as this came as the result of the slow market trend especially in wholesale (-2% qoq) and retail segments (-4%qoq). However, this is offset by the mass market loan that reached to Rp35,765 bn(+5% qoq), driven by automotive and micro lending business. Mass market currently covers 56% of total loan, versus 44% on 1Q09. As a result of higher growth in mass market loans, NIM is figured at 14.0% (vs. 10.0% 1Q09), while on the other hand ROAA is posted at 2.9%, ROAE 16.4% and CAR 21.5% (vs. 1.5%, 14.6% and 16.9% 1Q09, respectively). The bank aims to have a double growth in loans (20% yoy) by the end of the year, while provisioning is maintained at low figure.
At present, BDMN is trading at 2010F P/BV of 2.6x and PER 16.6x. We still call Neutral on the counter.
The strong bottom line figure, mainly contributed by strong increase of Net-Interest Income, which jumped to Rp2.923 bn (+26.6% yoy), as higher portion of mass market loan that gives better margin for the bank, led the operating income to Rp3,088 bn (+24% yoy).
The bank’s gross loan increased by only 1.5% qoq in the 1Q2010, as this came as the result of the slow market trend especially in wholesale (-2% qoq) and retail segments (-4%qoq). However, this is offset by the mass market loan that reached to Rp35,765 bn(+5% qoq), driven by automotive and micro lending business. Mass market currently covers 56% of total loan, versus 44% on 1Q09. As a result of higher growth in mass market loans, NIM is figured at 14.0% (vs. 10.0% 1Q09), while on the other hand ROAA is posted at 2.9%, ROAE 16.4% and CAR 21.5% (vs. 1.5%, 14.6% and 16.9% 1Q09, respectively). The bank aims to have a double growth in loans (20% yoy) by the end of the year, while provisioning is maintained at low figure.
At present, BDMN is trading at 2010F P/BV of 2.6x and PER 16.6x. We still call Neutral on the counter.
Rabu, 21 April 2010
NISP Bank Mandiri to continue growth momentum in micro loans (BMRI, Rp5,100)
• Bank Mandiri aims to post a minimum of 20% YoY growth on its micro loans disbursement to Rp6.4tn compared to Rp5.4tn in 2009. The bank saw that the segment managed to post superb 40.0% YoY growth last year and intends to keep the growth momentum this year.
• Separately, Bank Mandiri stated that its TPF will increase by 15% YoY to Rp344.7tn from Rp299.7tn last year.
• Meanwhile, for 1Q10, Bank Mandiri shared its total loans figure that reaches Rp199.9tn or 13.0% YoY higher from Rp176.9tn in 1Q09. The figure is also slightly higher than 4Q09 figure of Rp198.5tn despite the repayment season that occurs in every first quarter of each year.
• The bank plans to release its 1Q10 financial publication later this week.
• BMRI is trading at 2010F consensus PER of 13.0x and PBV of 2.7x.
• Separately, Bank Mandiri stated that its TPF will increase by 15% YoY to Rp344.7tn from Rp299.7tn last year.
• Meanwhile, for 1Q10, Bank Mandiri shared its total loans figure that reaches Rp199.9tn or 13.0% YoY higher from Rp176.9tn in 1Q09. The figure is also slightly higher than 4Q09 figure of Rp198.5tn despite the repayment season that occurs in every first quarter of each year.
• The bank plans to release its 1Q10 financial publication later this week.
• BMRI is trading at 2010F consensus PER of 13.0x and PBV of 2.7x.
Minggu, 28 Maret 2010
Mandiri Sekuritas Bank Central Asia: FY09 results in line with our expectation and consensus (BBCA, Rp5,700, Neutral, TP: Rp5,400)
Bank Central Asia recorded a net profit of Rp6.8tn (+17.9% yoy) in FY09, which was inline with our expectation and consensus estimates.
The bank actually recorded higher than expected operating expenses, however as it booked lower provisioning expenses, the bottom line is about in line with our expectation.
It is worth noting that the bank recorded strong loan growth in 4Q09 of 9.9% qoq, with loans to commercial segment posted the highest growth of 13.1% yoy. Coupled with the decline in absolute amount of NPL in 4Q09 (-36.7% qoq), such strong growth in loans supported the decline in NPL to 0.7% at end Dec09 from 1.3% at end Sep09.
At present, Bank Central Asia is trading at 2010F P/BV of 4.2x and PER of 16.7x. As the bank’s share price has already exceeded our target price, we changed our recommendation to neutral.
The bank actually recorded higher than expected operating expenses, however as it booked lower provisioning expenses, the bottom line is about in line with our expectation.
It is worth noting that the bank recorded strong loan growth in 4Q09 of 9.9% qoq, with loans to commercial segment posted the highest growth of 13.1% yoy. Coupled with the decline in absolute amount of NPL in 4Q09 (-36.7% qoq), such strong growth in loans supported the decline in NPL to 0.7% at end Dec09 from 1.3% at end Sep09.
At present, Bank Central Asia is trading at 2010F P/BV of 4.2x and PER of 16.7x. As the bank’s share price has already exceeded our target price, we changed our recommendation to neutral.
Rabu, 24 Maret 2010
Mandiri Sekuritas Bank Mandiri: FY09 results 18% above our expectation and 12% above consensus estimates (BMRI, Rp5,000, Not Rated)
Bank Mandiri recorded a net profit of Rp7.2tn (+34.7% yoy) in FY09, which was better than our expectation and consensus estimates.
The bank recorded lower than expected provision expenses as the bank managed to reduce its NPL substantially to 2.6% at end 2009. Such decline in NPL was possible due to upgrade and some repayments on the troubled loans. Bank Mandiri recorded Rp1.6tn upgrades in its corporate loans, representing 74% of the total upgrades during the year.
During the analyst meeting yesterday, the bank highlighted its success in strengthening its deposit franchise value. The bank managed to enhance its transaction capabilities as reflected on a significant increase in the transaction volume through its electronic channels as well as an increase in the number of cash management users. In 2010, the bank aims to have 15- 18% yoy loan growth (vs. 13.6% yoy in 2009) and managed its NPL below 4%. The bank also targets its coverage ratio of above 140% (at end 2009, coverage ratio was recorded at 229%).
At present, Bank Mandiri is trading at 2009F P/BV of 2.6x and PER of 14.6x. We have no rating on this bank.
The bank recorded lower than expected provision expenses as the bank managed to reduce its NPL substantially to 2.6% at end 2009. Such decline in NPL was possible due to upgrade and some repayments on the troubled loans. Bank Mandiri recorded Rp1.6tn upgrades in its corporate loans, representing 74% of the total upgrades during the year.
During the analyst meeting yesterday, the bank highlighted its success in strengthening its deposit franchise value. The bank managed to enhance its transaction capabilities as reflected on a significant increase in the transaction volume through its electronic channels as well as an increase in the number of cash management users. In 2010, the bank aims to have 15- 18% yoy loan growth (vs. 13.6% yoy in 2009) and managed its NPL below 4%. The bank also targets its coverage ratio of above 140% (at end 2009, coverage ratio was recorded at 229%).
At present, Bank Mandiri is trading at 2009F P/BV of 2.6x and PER of 14.6x. We have no rating on this bank.
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