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BBCA
Bank BCA, still strong
🎯 💰 📈 ➡️ Rp37.232
12m Free cashflow +Rp4,899bn ⬇️⬇️
July 30th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
BBCA 2Q sales growth fell to 0% from +14% 1Q. Interest from loans fell -3%, consumer financing -22%, investments +38%. Earning assets growth slowed to 1% and the ratio of sales to assets also dropped very sharply. We expect still low sales to assets, but higher asset growth from the 3Q. This results in 12 month sales growth +5%, Rp90.9tn.
Cashflow
2Q free cashflow was barely positive at only Rp283bn. Operating cashflow is still strong, while investment cashflow is still a higher than average minus. 12 months free cashflow is Rp4,899bn, much lower than Rp14,500bn in the 1Q. But with lower average investment cashflow and higher sales, we predict the next 12 months free cashflow will bounce back up to Rp16.3tn.
BBCA 2Q sales growth fell to 0% from +14% 1Q. Interest from loans fell -3%, consumer financing -22%, investments +38%. Earning assets growth slowed to 1% and the ratio of sales to assets also dropped very sharply. We expect still low sales to assets, but higher asset growth from the 3Q. This results in 12 month sales growth +5%, Rp90.9tn.
Cashflow
2Q free cashflow was barely positive at only Rp283bn. Operating cashflow is still strong, while investment cashflow is still a higher than average minus. 12 months free cashflow is Rp4,899bn, much lower than Rp14,500bn in the 1Q. But with lower average investment cashflow and higher sales, we predict the next 12 months free cashflow will bounce back up to Rp16.3tn.
Sales to recover, cash flow too, 1.8% yield, shares rising back above average...
Balance sheet
In the balance sheet, growth of the short term assets other than cash which create the earnings slowed down to 1% in the 2Q from the 1Q. This is compared with the longer term average of 3% growth per quarter. We assume that growth stays at this low 1% level in the 3Q and 4Q, then picks back up to 2% and 3% next year.
Profit
While sales were flat, net profit declined -17% in 2Q from a year ago. That’s become of another jump in non cash provisions which have tripled. Lower interest expense meant the cash cost ratio has improved further to above 56% in the last 12 months. We use 56% to predict the next 12 months net profit will be Rp29.5tn +5%.
Value
BBCA current market value is down to Rp750tn. That’s 8.25x our 12 months sales forecast, 0.78x the value of the non cash short term assets & 3.99x the equity with a 16% profitability. Yield forecast is 1.8%. We use our 1.6% cashflow valuation with a 10% discount because of the high yield, which gives a higher target price of Rp37,232.
In the balance sheet, growth of the short term assets other than cash which create the earnings slowed down to 1% in the 2Q from the 1Q. This is compared with the longer term average of 3% growth per quarter. We assume that growth stays at this low 1% level in the 3Q and 4Q, then picks back up to 2% and 3% next year.
Profit
While sales were flat, net profit declined -17% in 2Q from a year ago. That’s become of another jump in non cash provisions which have tripled. Lower interest expense meant the cash cost ratio has improved further to above 56% in the last 12 months. We use 56% to predict the next 12 months net profit will be Rp29.5tn +5%.
Value
BBCA current market value is down to Rp750tn. That’s 8.25x our 12 months sales forecast, 0.78x the value of the non cash short term assets & 3.99x the equity with a 16% profitability. Yield forecast is 1.8%. We use our 1.6% cashflow valuation with a 10% discount because of the high yield, which gives a higher target price of Rp37,232.
