BRIS - Uninterrupted solid quarterly results

KBVS Update
Monday, 2 Oct 2023

BRIS: Uninterrupted Solid Quarterly Results
(Maintain BUY; TP: IDR1,950)

•    BRIS noted a solid 1H23 results, with earnings arrives above both ours and consensus expectation at 55.2%/52.4% or 5.1%/2.4% higher compared to FY22 run rate at 50%. PATMI surged 32.4% yoy to IDR2.82 tn driven by solid growth from top to bottom.

•    We like BRIS financing growth at 16% yoy, far above industry and banks under our coverage as well as 300bps higher than ‘23F low range management guidance at 13%-15% yoy, thanks to consumer segment financing sturdy growth at 20.7% yoy and taking as the largest chunked (54.3%) of BRIS’s 1H23 financing.

•    We also like BRIS key performance metrics which also reported within its ‘23F guidance. NIM at 5.99% was at upper range ‘23F BRIS forecast at 5.70%-6.00%, while NPF which stood at 2.31% was arrives at the ‘23F upper range guidance of 2.10%-2.30% (KBVS ‘23F NPF for BRIS at 2.3%).  

•    With 1H23 solid earnings result (1H23: 32.4%yoy), we believe BRIS should effortlessly to achieved both ours and street ‘23F earnings for BRIS at 20.1% yoy and 26.4% yoy, respectively. As a matter of fact, assuming BRIS earnings will be flat in the remaining quarters of this year, which is unlikely, FY23 earnings could potentially reach IDR5.54 tn or 30.3% yoy, beating KBVs and consensus forecast.

•    Maintain BUY with target price of IDR1,950. At this juncture, BRIS looks undemanding traded at 2.0x ‘23F P/B (below its historical mean average of 2.5x) and offering 20.0% of upside, while we believe it should be valued at 2.4x ’23 P/B. KSEI data as of Aug23 revealed that foreign ownership on BRIS stocks has been increasing by 65bps YTD and 225bps higher compared to the same period of last year (0.6% vs 2.9%).

Regards,
Akhmad Nurcahyadi - KBVS Research