BMRI - Allocates IDR1.17 tn for share repurchase

BMRI - Allocates IDR1.17 tn for share repurchase Bank Mandiri (BMRI) has announced plans to repurchase its own shares. Following a week of modest price fluctuations, culminating in a 1.99% gain on Friday (14/2) to close at IDR5,125 per share, BMRI's stock price has exhibited a year-over-year decline of 28.82%. In a regulatory filing on Friday, BMRI disclosed that it has earmarked IDR1.17 tn for this share repurchase program, subject to shareholder approval at the upcoming General Meeting of Shareholders (GMS) scheduled for March 25, 2025. Another objective is the transfer of buyback shares for the implementation of an employee stock ownership program to encourage engagement in the sustainability of the company's long-term performance improvement and/or a stock ownership program for directors and commissioners, which is carried out as the implementation of a long-term performance and risk-based compensation policy. (Source : Kontan) Comment : In light of the sustained pressure on Bank Mandiri's stock price, which has significantly diverged from its intrinsic value, we believe a share buyback program is warranted. This strategic move would serve to bolster investor confidence in the bank's long-term prospects and ensure market valuation more accurately reflects its robust financial underpinning. Maintain BUY BMRI with GGM-based TP pegged at 2.3x '25F P/B, while currently trading at 1.4x ‘25F P/B or at its -1SD historical mean of 1.4x.