BRIS- FY23 earnings beating ours and consensus

KBVS Update
Tuesday, 6 Feb 2024

BRIS: FY23 earnings beating ours and consensus           
(Maintain BUY; TP: 2,050)

•    BRIS reported another strong quarterly result. FY23 solid earnings growth (33.9% yoy) was supported by double-digit margin income growth, low overhead cost increase, and a sharp drop in provisions. In all, FY23 earnings arrive above ours and street expectations at 109%/106%. It is worth noting that on a quarterly basis, the growth was stronger at 42.6% yoy (9.1% qoq).

•    Financing grew by 15.7% yoy, surpassing the banking industry (+10.4% yoy), ‘23F management guidance of +13–15% yoy, and our financing growth forecast for BRIS at 12.7% yoy, thanks to strong pick-ups in the consumer segment (+15.7% yoy) and wholesale segment, which grew the highest at 18.0% yoy. TPF grew by 12.4% yoy, backed by sturdy CA segment growth of 19.5%. CASA portion grew by more than double vs 3Q23, to 10.5% yoy (13.8% qoq).

•    Key performance metrics remain solid, whereas NIM recorded 5.8% is within ‘23F BRIS NIM range guidance of 5.7–6.0%. NPF was consistently getting healthier, from 2.2% in 3Q23 to 2.08% and 18 bps, surpassing our ‘23F NPF for BRIS at 2.26%.

•    We will revisit our model and make some adjustments to accommodate a better-than-expected FY23. In our view, the continuing tempting potential untapped syariah market should be translated as strong latent growth for BRIS going forward. We also think that BRIS should be trading at a higher valuation due to its continuing solid prospects for growth this year.

•    Maintain BUY. Since our last call on BRIS (see our latest report in Nov23), the stock has provided a gain of 55.7% and surpassing our latest TP at IDR2,050/share, which using the GGM pegged at 2.2x ‘24F PB. Currently, the stock is trading at 2.5x ‘24F P/B, or at its average historical mean of 2.5x.

Regards,
Akhmad Nurcahyadi - KBVS Research