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BBRI
BBRI, most leveraged to recovery
🎯 💰 📈 Rp7,009
Last 12 months cashflow +Rp8,217bn ⬇️⬇️⬇️
August 27th, 2020
⏰ 1 minute read
⏰ 1 minute read
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Sales
BBRI 2Q sales growth was -17%, lowest of our 3 banks. The sales to assets ratio slumped to 2.4% from 3.1% as loan interest fell -20%. Average asset growth has also turned negative. Sales were well below our forecast. We expect a return to growth & recovery in sales to asset ratio the next 12 months, sales of Rp153.3tn +3%.
Cashflow
2Q cashflow was -Rp16,756bn which is much lower than our forecast & this brings down the last 12 months quarterly average to Rp2,054bm. That’s far below the average as it was in the 1Q of Rp11,477bn, BBRI has the highest average cashflow among our 3 banks. We expect cashflow to recover to Rp6,862bn a quarter over the next 12 months.
BBRI 2Q sales growth was -17%, lowest of our 3 banks. The sales to assets ratio slumped to 2.4% from 3.1% as loan interest fell -20%. Average asset growth has also turned negative. Sales were well below our forecast. We expect a return to growth & recovery in sales to asset ratio the next 12 months, sales of Rp153.3tn +3%.
Cashflow
2Q cashflow was -Rp16,756bn which is much lower than our forecast & this brings down the last 12 months quarterly average to Rp2,054bm. That’s far below the average as it was in the 1Q of Rp11,477bn, BBRI has the highest average cashflow among our 3 banks. We expect cashflow to recover to Rp6,862bn a quarter over the next 12 months.
Sales to recover, cashflow to recover, asset growth back to positive, cash paid to reach Rp54tn ➡️ big upside...
Balance sheet
BBRI revenue generating assets (other short term assets) grew in the 2Q by +3%, which is much higher than our forecast decline. But growth has slowed down from a 5 year average 2.6%, fastest of our 3 banks, to -1% this year, which is the slowest. We expect a recovery in quarterly growth to +1.5% in the next 12 months.
Profit
BBRI cash cost ratio (net profit add depreciation & non cash costs minus sales as % of sales) increased in 2Q with lower sales. The 5 year avenge cost ratio is 62.1% & this increased to 62.5% in 2Q bringing the 12 month average to 61.2%. We use 61.2% as sales recover, to get a 12 month profit Rp36tn, +27%.
Value
With higher sales/asset ratio, BBRI is most leveraged to the recovery. At Rp457.7tn it’s 2.99X our sales forecast, 0.33X other short term assets, 2.3X equity with an 18% profitability. Yield is cheap, 5.4%! We increase our cashflow forecast to Rp27,448tn & at 1.6% with 0.5 discount, we have a higher target price Rp7,009. Cumulative capital paid will rise to Rp57tn.
BBRI revenue generating assets (other short term assets) grew in the 2Q by +3%, which is much higher than our forecast decline. But growth has slowed down from a 5 year average 2.6%, fastest of our 3 banks, to -1% this year, which is the slowest. We expect a recovery in quarterly growth to +1.5% in the next 12 months.
Profit
BBRI cash cost ratio (net profit add depreciation & non cash costs minus sales as % of sales) increased in 2Q with lower sales. The 5 year avenge cost ratio is 62.1% & this increased to 62.5% in 2Q bringing the 12 month average to 61.2%. We use 61.2% as sales recover, to get a 12 month profit Rp36tn, +27%.
Value
With higher sales/asset ratio, BBRI is most leveraged to the recovery. At Rp457.7tn it’s 2.99X our sales forecast, 0.33X other short term assets, 2.3X equity with an 18% profitability. Yield is cheap, 5.4%! We increase our cashflow forecast to Rp27,448tn & at 1.6% with 0.5 discount, we have a higher target price Rp7,009. Cumulative capital paid will rise to Rp57tn.
