NH Korindo Sekuritas Indonesia

BMRI IJ

• 62 21 797 6202, ext:214

  Operating Revenue 72,490 75,981 82,156 93,885 Net profit 13,789 20,640 24,162 28,925 EPS (IDR) 295 442 518 620

  40.0 Outstanding sh.(mn) 46,667 Market Cap (IDR bn) 410,667 Market Cap (USD mn) 30,183 Avg. Trd Vol - 3M (mn)

  40.17 Avg. Trd Val - 3M (bn) 314.54 Foreign Ownership 22.1%

  Finance Bank Bloomberg

  Reuters BMRI.JK Raphon Prima

  raphon@nhsec.co.id

  EPS growth

  growth 7.2% 3.6% 9.2% 11.8%

  Buy Dec 2018 TP (IDR) 10,300 Consensus Price (IDR) 8,407 TP to Consensus Price +22.5% vs. Last Price +17.0% Shares data

  Interest Income 76,710 79,502 86,785 97,067

  Bank Mandiri Tbk | Summary (IDR bn) 2016/12A 2017/12A 2018/12E 2019/12E

  Target Harga Rp10.300 Kami menggunakan asumsi forward P/B sebesar 2,3x (2SD di atas rata-rata 4 tahun terakhir) sebagai basis metode valuasi. Target harga ini mengimplikasikan P/B 2018E sebesar 2,6x (vs 2,2x saat ini).

  Sementara itu, CASA ratio meningkat menjadi 66,2% dan ditargetkan akan mencapai 70% pada 2020. Peningkatan CASA akan memampukan BMRI lebih efisien dalam mengelola beban bunga .

  Kemampuan Mengontrol Beban Bunga Pertumbuhan deposit yang hanya sebesar 7,0% pada 2017 menyebabkan peningkatan loan-to-deposit ratio menjadi 88,5% (vs 85,7% pada 2016).

  Kami memperkirakan bahwa BMRI mampu mencapai pertumbuhan 12,4% pada 2018. Selain kuatnya segmen korporasi, segmen consumer dan micro yang sedang ditingkatkan kontribusinya akan meningkatkan ruang pertumbuhan kredit. Segmen consumer dan micro mampu mencetak pertumbuhan sekitar 20% pada saat ini.

  Ruang Pertumbuhan Kredit Meskipun tekanan perlambatan mewarnai industri perbankan, tren pertumbuhan kredit BMRI cenderung stabil di kisaran 10% sejak dua tahun terakhir. Hal ini ditopang oleh kuatnya kinerja segmen korporasi dengan pertumbuhan rata-rata 15%.

  Share Price Performance YTD

  Last Price (IDR) 8,800 Price date as of Feb 21, 2018 52 wk range (Hi/Lo) 9,050 / 5,550 Free float (%)

• - 32.2% 49.7% 17.1% 19.7%

  ROIC 19.1% 16.1% 16.1% 16.7% P/E 19.6x 18.1x 17.0x 14.2x P/BV 1.8x 2.2x 2.2x 2.0x DPS (IDR) 133 199 233 279

  Dividend yield 2.3% 2.5% 2.7% 3.2% Source: Company Data, Bloomberg, NHKS Research

  1.4% 1.9% 2.0% 2.2%

  ROA

  ROE

  4.0% 3.5% 3.2% 3.2%

  NPL

  85.7% 88.5% 89.1% 90.9%

  BVPS (IDR) 3,286 3,643 4,009 4,443 Net Interest Margin 5.9% 5.3% 5.4% 5.5% Loan/Deposits

  Please consider the rating criteria & important disclaimer NH Korindo Sekuritas Indonesia Company Report | Feb 22, 2018 Bank Mandiri Tbk (BMRI) Kuatnya Pijakan untuk Pertumbuhan Ke Depan Ulasan Kinerja 4Q17 BMRI mencetak interest income sebesar Rp20,2 triliun (+1,9% y-y) dan net interest income sebesar Rp13,5 triliun (+2,4% y-y). Operating revenue tumbuh lebih tinggi sebesar 7% y-y menjadi Rp20,1 triliun, yang ditopang oleh lonjakan non-interest income sebesar 17% menjadi Rp6,6 triliun. Laba bersih tercatat sebesar Rp5,6 triliun atau melonjak 214% y-y karena pencatatan anomali laba bersih akibat tingginya beban provisi pada 4Q16.

  1M

  3M

  12M

  Abs. Ret. 10.0% 9.0% 18.9% 62.3% Rel. Ret.

  5.5% 6.6% 8.8% 37.6%

  10.1% 12.8% 13.5% 14.7% BDO Unibank 12,559 46,868 1.6% 3.9% 10.8% 23.1x 2.3x 0.8% Metropolitan Bank 6,003 37,818 4.2% 3.9% 9.1% 16.7x 1.5x 1.0% Philippine Island Bank 9,110 38,084 1.7% 3.4% 13.0% 21.3x 2.6x 1.5%

  Philippine

  Singapore

  Bank of Ayudhya 10,162 64,128 8.4% 3.8% 10.7% 13.8x 1.4x 2.0%

  Bangkok Bank 12,488 94,446 3.8% 2.4% 8.5% 11.9x 1.0x 3.2% Siam Commercial 16,067 92,841

  Thailand

  CIMB 16,819 108,261 20.8% 2.6% 9.3% 14.9x 1.4x 3.5% Malayan Banking 28,191 164,020 28.4% 1.9% 11.2% 13.4x 1.5x 5.4% Hong Leong 5,552 50,939 16.0% 1.6% 9.6% 13.8x 1.3x 2.0%

  Malaysia

  DBS 57,158 387,334 3.1% 1.8% 9.5% 17.2x 1.6x 2.1% UOB 34,736 268,287 9.5% 1.8% 10.4% 13.6x 1.4x 2.5% OCBC 41,191 340,370 19.4% 1.6% 11.1% 13.3x 1.4x 2.8%

  BMRI 30,183 82,772 49.7% 5.3% 12.8% 18.1x 2.2x 2.5% BBRI 34,449 82,886 10.7% 7.6% 18.5% 15.5x 2.7x 2.6% BBCA 43,535 49,981 12.9% 6.7% 18.9% 26.5x 4.7x 0.9% BBNI 13,946 52,203 20.1% 5.4% 14.3% 13.6x 1.8x 2.6%

  Company Report

  Company Market Cap (USD mn) Total Asset (USD mn) Net Profit Growth Net Interest Margin ROE P/E P/BV Dividend Yield

  Source: Bloomberg, NHKS research

  Bank di Indonesia masih mampu mempertahankan NIM di atas 5% meskipun sedang menghadapi tekanan penurunan suku bunga acuan oleh bank sentral. Keunggulan NIM

ini mampu ditranslasikan menjadi ROE yang lebih tinggi.

Bank di Indonesia mampu mencetak pertumbuhan laba bersih di kisaran 10%-20% yang mampu disaingi oleh beberapa bank di Malaysia dan Singapura, seperti OCBC, CIMB dan Malayan Banking. Namun, tiga bank tersebut memiliki aset yang jauh lebih besar dibandingkan dengan aset bank di Indonesia.

  Daya Saing Perbankan Indonesia di ASEAN Industri perbankan di Indonesia menjadi prioritas investasi utama di ASEAN karena menawarkan suku bunga kredit yang lebih tinggi dibandingkan dengan suku bunga yang ditawarkan bank lain di ASEAN. Hal ini merupakan faktor utama keunggulan industri perbankan di Indonesia.

  BMRI terus berupaya tidak hanya memperkuat client relationship dengan nasabah korporasi tetapi juga meningkatkan kontribusi dari segmen consumer dan micro. Kontribusi segmen consumer ditargetkan mencapai 19% pada 2020 dengan fokus di produk kredit KPR, otomotif, dan kredit berbasis payroll, terutama bagi karyawan dari

perusahaan yang sudah menjadi nasabah korporasi BMRI.

  ASEAN Banks Sekilas tentang BMRI BMRI merupakan bank terbesar kedua di Indonesia setelah BBRI. Pada 2017, BMRI menyalurkan kredit sebesar Rp730 triliun atau sekitar 15% dari total kredit yang beredar di Indonesia. Selain itu, BMRI merupakan bank nomor satu di Indonesia di segmen korporasi. Pada 2017, BMRI menyalurkan kredit sebesar Rp265 triliun ke segmen korporasi atau 36% dari total kredit.

  Feb 22, 2018

• 9.4% 3.0% 12.4% 11.7x 1.4x 3.7%

  Company Report

  Feb 22, 2018

  Performance Highlights Interest Income (IDR bn) | 1Q15 - 4Q17 Net Profit (IDR bn) | 1Q15 - 4Q17

  Source: Company, NHKS research Source: Company, NHKS research

  Gross Loan (IDR bn) | 1Q15 - 4Q17 Deposit (IDR bn) | 1Q15 - 2Q17

  Source: Company, NHKS research Source: Company, NHKS research

  Loan Composition Loan Yield, Cost of Deposit, NIM | 1Q15 - 4Q17

  Source: Company, NHKS research Source: Company, NHKS research

  Company Report

  Feb 22, 2018

  Multiple Valuation Forward P/B band | Last 4 years Dynamic Forward P/B band | Last 4 years

  Source: NHKS research Source: NHKS research

  Rating and target price update Target Price Revision Date Rating Target Price Last Price Consensus vs Last Price vs Consensus

  02/22/2018 Buy 10,300 (Dec 2018) 8,800 8,407 +17.0% +22.5% Source: NHKS research, Bloomberg

  Analyst Coverage Rating Closing and Target Price

  Source: Bloomberg Source: NHKS research

  NH Korindo Sekuritas Indonesia (NHKS) stock ratings

  1. Period: End of year target price

  2. Rating system based on a stock’s absolute return from the date of publication : Greater than +15%

   Buy : -15% to +15%  Hold : Less than -15%  Sell

  Company Report

  Feb 22, 2018

  Summary of Financials

DISCLAIMER

INCOME STATEMENT BALANCE SHEET

  

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errors, omissions, misstatements, negligence, inaccuracy arising herefrom. All rights reserved by PT NH Korindo Securities Indonesia ^{BMRI Summary Last Price (IDR) 8,800}

^{Target Price (IDR) 10,300 2016/12A 2017/12A 2018/12E 2019/12E}

^{Rating: Buy ROE 10.1% 12.8% 13.5% 14.7% ROA 1.4% 1.9% 2.0% 2.2% ROIC 19.1% 16.1% 16.1% 16.7% Opera ti ng ROA 7.4% 7.0% 6.9% 7.1%}

^{in IDR bn 2016/12A 2017/12A 2018/12E 2019/12E Pre-Provi s i on ROA 4.5% 4.0% 4.0% 4.1%}

^{Interest Income 76,710 79,502 86,785 97,067 Non-Interes t Income/Op. Rev 28.5% 31.1% 28.6% 28.6%}

^{Growth (% y/y) 7.2% 3.6% 9.2% 11.8% Cos t/Income 40.2% 43.4% 41.8% 41.7%}

^{Interes t Expens es (24,885) (27,174) (28,134) (30,043) Ca s h Di vi dend (IDR bn) 6,213 9,300 10,886 13,032}

^{Net Interest Income 51,825 52,327 58,651 67,024 Di vi dend Yi el d (%) 2.3% 2.5% 2.7% 3.2%}

^{Net Interest Margin 5.9% 5.3% 5.4% 5.5% Pa yout Ra ti o (%) 45.1% 45.1% 45.1% 45.1%}

^{Net Fee Income 10,774 11,856 13,288 15,185 Equi ty/As s ets 14.8% 15.1% 14.9% 14.8%}

^{Tra di ng Income 3,027 3,950 4,427 5,059 Loa n/Depos i ts 85.7% 88.5% 89.1% 90.9%}

^{Other Opera ti ng Income 6,863 7,849 5,790 6,617 Loa n/As s ets 63.7% 64.9% 65.5% 66.9%}

^{Operating Revenue 72,490 75,981 82,156 93,885 NPL 4.0% 3.5% 3.2% 3.2%}

^{Opera ti ng Expens es (29,114) (32,992) (34,353) (39,124) Loa n Los s Res erves /Loa ns 5.0% 4.7% 4.3% 4.2%}

^{Pre-provisioning OP (PPOP) 43,375 42,990 47,803 54,761 Depos i ts /Li a bi l i ti es 87.2% 86.4% 86.4% 86.4%}

^{Provi s i on for Impa i rment (24,762) (15,820) (15,998) (16,687) CASA/Depos i ts 64.2% 66.2% 67.0% 69.0%}

^{EBT 18,573 27,157 31,791 38,058 Ti me Depos i ts /Depos i ts 35.8% 33.8% 33.0% 31.0%}

^{Income Ta x (3,923) (5,714) (6,689) (8,007) Pa r Va l ue (IDR) 250 250 250 250}

^{Non-control l i ng Interes t (861) (803) (940) (1,126) Tota l Sha res (mn) 46,667 46,667 46,667 46,667}

^{Net Profit 13,789 20,640 24,162 28,925 Sha re Pri ce (IDR) 5,788 8,000 8,800 8,800}

^{Growth (% y/y) -32.2% 49.7% 17.1% 19.7% Ma rket Ca p (IDR tn) 270.1 373.3 410.7 410.7}

^{in IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E}

^{Ca s h 22,907 24,269 22,674 24,248 Pri ce /Ea rni ngs 19.6x 18.1x 17.0x 14.2x}

^{Pl a cement i n Ba nks 136,462 137,119 147,698 148,609 Pri ce /Book Va l ue 1.8x 2.2x 2.2x 2.0x}

^{Net Loa ns 629,068 695,432 784,502 897,205 Pri ce/Op. Revenue 3.7x 4.9x 5.0x 4.4x}

^{Inves tment 160,785 165,984 186,202 212,461 PE/EPS Growth -0.6x 0.4x 1.0x 0.7x}

^{Fi xed As s et 35,663 36,619 37,787 39,243 EV/Opera ti ng Revenue 4.1x 5.3x 5.5x 4.9x}

^{Other As s ets 53,821 65,279 73,380 78,371 EV/PPOP 6.8x 9.4x 9.4x 8.3x Total Assets 1,038,706 1,124,701 1,252,243 1,400,138 EV (IDR bn) 295,240 405,091 450,493 456,342}

^{Depos i ts 772,176 824,601 920,018 1,030,271 Op. Revenue CAGR (3-Yr) 13.0% 11.4% 8.1% 9.0%}

^{Debt 45,124 52,739 58,841 65,893 EPS CAGR (3-Yr) -8.8% 1.3% 5.9% 28.0%}

^{Other l i a bi l i ti es 68,036 77,355 86,305 96,648 Ba s i c EPS (IDR) 295 442 518 620}

^{Total Liabilities 885,336 954,695 1,065,165 1,192,812 Di l uted EPS (IDR) 295 442 518 620}

^{Ca pi ta l Stock 11,667 11,667 11,667 11,667 BVPS (IDR) 3,286 3,643 4,009 4,443}

^{Reta i ned Ea rni ngs 96,931 111,358 126,220 144,258 Op. Revenue PS (IDR) 1,553 1,628 1,760 2,012}

^{Shareholders' Equity 153,370 170,006 187,078 207,326 DPS (IDR) 133 199 233 279}

^{in IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E}

^{Net Income 13,807 20,640 24,162 28,925 DCF (IDR bn)}

^{Deprec & Provi s i on 26,535 18,110 2,902 5,903 NOPAT 34,214 33,945 37,745 43,239}

^{Chg. In Worki ng Ca pi ta l (5,785) (4,362) 687 5,188 +Depr./Amor. 26,535 18,110 2,902 5,903}

^{CFO 34,557 34,388 27,750 40,016 -Chg. i n Loa n (75,870) (82,134) (100,740) (117,633)}

^{Net Cha nges i n Loa n (75,870) (82,134) (100,740) (117,633) -Incr. (Decr.) i n Worki ng Ca p. (5,785) (4,362) 687 5,188}

^{CFI (82,033) (87,382) (123,775) (147,069) (Unl evered) FCFF (20,906) (34,441) (59,406) (63,302)}

^{Di vi dends Pa i d (6,100) (6,213) (9,300) (10,886) WACC}

^{Net Cha nges i n Depos i t 85,627 52,699 95,417 110,252 Cos t of Debt (Ta x Adj.) 9.0% 7.2% 7.7% 7.9%}

^{CFF 79,369 53,401 94,430 108,627 Cos t of Equi ty (COE) 10.5% 12.1% 13.1% 13.3%}

^{Net Changes in Cash 31,893 407 (1,594) 1,574 WACC (%) 10.3% 11.5% 12.4% 12.6% RIM Sprea d (FROE-COE) (%) 1.1% 1.3% 1.1% 2.1% Res i dua l Income (IDR bn) 1,283 2,040 1,858 3,951}

^{By Geography % Shareholders % Equi ty Cha rge 12,506 18,599 22,304 24,974}

^{Indones i a 77.9 Republ i c of Indones i a 60.0 EVA Uni ted Sta tes 13.8 Ha rri s As s oci a tes 2.8 Inves ted Ca pi ta l (IDR bn) 159,392 198,494 222,745 245,919 Norwa y 2.2 Norges Ba nk 1.7 ROIC-WACC (%) 11.2% 5.6% 4.5% 5.0% Luxembourg 1.5 Va ngua rd 1.4 EVA (IDR bn) 17,856 11,089 10,047 12,252}

  CASH FLOW STATEMENT DCF, RIM & EVA OWNERSHIP PROFITABILITY & STABILITY _{February 21, 2018 Dec 2018}

  ^{Analyst: Raphon Prima}