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BBRI sharp with a 6% yield forecast

BBRI Current 4,320 Target 6,056 + 40%

28 Jul 2022
1 minute read

Non cash asset growth went from -1% to -0%
Last 5 quarters
2% 13% 5% -1% 0%

• Non cash asset growth went from -1% to 0% in the second quarter.
• Average quarter growth is at 4% now.
• We predict average growth of 1% in the next 12 months.

Sales to assets went from 3.3% to 3.5%
Last 5 quarters
3.1% 2.9% 3.0% 3.3% 3.5%

• Sales to assets went from 3.3% to 3.5% in the second quarter.
• The average quarter ratio is 3.2% now.
• We use a 3.4% ratio for our forecasts.

Sales grew 5%
Last 5 quarters billion rupiah
40,034 41,496 46,457 49,967 52,352

• Sales grew 5% in the second quarter to 52,352 billion rupiah 1% above our 51,965 billion rupiah forecast.
• This brings the quarterly average to 7% growth.
• With our asset growth & sales to assets forecasts, sales will be 57,812 billion rupiah in the second quarter of 2023.

Costs down profit up
Last 5 quarters
-59% -61% -48% -59% -56%

• The cash cost ratio went from -59% to -56% profit from 12,220 to 12,657 billion rupiah in the second quarter.
• Provisions went from 7,474 to 9,451 billion rupiah & we use 9,451 billion rupiah provisions in our forecast.
• The average cost ratio is at -56% now.
• We use the average -56% cost ratio to predict a 15,094 billion rupiah profit in the second quarter of 2023.

Cashflow higher
Last 5 quarters billion rupiah
18,386 11,546 19,798 14,393 20,289

• Free cashflow went from 14,393 to 20,289 billion rupiah in the second quarter with -1,337 billion rupiah investment Cashflow.
• Average quarterly Cashflow is at 16,507 billion rupiah 10% of market cap.
• We assume -2,312 billion rupiah investment spending which with higher sales gives a 22,926 billion rupiah average Cashflow in the next 12 months.

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Capital last 12 months -2% of market cap.
Last 5 quarters billion rupiah
58,662 23,326 18,456 21,618 47,023

• BBRI cumulative capital from the last 30 quarters improved 21,618 to 47,023 billion rupiah in the quarter with -1,589 billion rupiah from liabilities + 26,994 billion rupiah from equity & will be 84,698 billion rupiah in12 months time.
• The current market value of 654,199 billion rupiah gives a 6% forecast yield.
• Our cashflow forecast is 91,705 billion rupiah which means a 7 X valuation. A 10 X valuation gives a 40% higher target price of 6,056 rupiah.