BBRI - Solid prospects remain, raising our ‘24F EPS

KBVS Update
Thursday, 26 Oct 2023

BBRI: Solid prospects remain, raising ‘24F EPS
(Maintain BUY; TP: IDR6,390)

•    BBRI’s 9M23 earnings growth at 12.5% yoy (IDR44.2 tn), came slightly above ours and consensus expectation at 76.1%/75.4% (vs 5yrs average of 72.7%) driven by solid performance from top to bottom.

•    On balance sheet side, loan grew by 12.5% yoy and around 50bps higher than upper ‘23F management guidance at 12%. TPF growth noted at a strong rate of 13.2% yoy, while CASA improves by 10.1% yoy to IDR821,135 tn. We believe BBRI is in a good shape to restraint any CoF adjustment needed in the higher for longer interest rate environment.

•    NIM reported at 8.05% in 9M23 and arriving around 15bps higher vs ‘23F management upper guidance at 7.9%. Tier-1 at 26.3% which is 119bps higher year-on-year should be translated as a potential RoE expansion as well as provide enough room to manage high dividend yield, in our view.  

•    We revisit our model and made some adjustment, as we believe on BBRI’s strong latent prospect growth. Our new ‘24F loan growth forecast is around 50bps/60bps higher at 10.5%/11.62%. Our new assumption resulting to a higher EPS by +0.4%/1.2% vs our previous ‘23F/’24F EPS for BBRI.

•    We raised our TP for BBRI to IDR6,390 as we revised up our EPS forecasts and rolled over BBRI’s valuation to ‘24F. At this juncture, BBRI looks attractive following its 8.4% share price drop over the past 3 months. Maintain BUY for BBRI. Our GGM intrinsic value for BBRI is pegged at 2.9x ‘24F P/B while its currently trading at 2.5x ‘24F P/B, or at +1SD historical mean.

Regards,
Akhmad Nurcahyadi - KBVS Research