NH Korindo Sekuritas Indonesia

• 8.2% vs. Last Price +11.9%

  85.7% 88.5% 90.9% 92.2%

  raphon@nhsec.co.id

  2016/12A 2017/12A 2018/12E 2019/12E

  Interest Income 76,710 79,502 82,886 91,344

  growth 7.2% 3.6% 4.3% 10.2%

  Operating Revenue 72,490 75,981 78,861 82,888 Net profit 13,789 20,640 22,929 25,554 EPS (IDR) 295 442 491 548

  EPS growth

  BVPS (IDR) 3,286 3,643 3,811 4,013 Net Interest Margin 5.9% 5.3% 5.1% 5.0% Loan/Deposits

  NPL

  Finance Bank Bloomberg

  4.0% 3.5% 3.0% 2.8%

  ROE

  10.1% 12.8% 13.2% 14.0%

  ROA

  1.4% 1.9% 2.0% 2.0%

  ROIC 19.1% 16.1% 15.6% 15.8% P/E 19.6x 18.1x 13.6x 12.2x P/BV 1.8x 2.2x 1.8x 1.7x DPS (IDR) 133 199 221 246

  Dividend yield 2.3% 2.5% 3.3% 3.7%

  Reuters BMRI.JK Raphon Prima

  41.58 Avg. Trd Val - 3M (bn) 282.83 Foreign Ownership 22.0%

  40.0 Outstanding sh.(mn) 46,667 Market Cap (IDR bn) 317,333 Market Cap (USD mn) 21,768 Avg. Trd Vol - 3M (mn)

  Last Price (IDR) 6,700 Price date as of Aug 16, 2018 52 wk range (Hi/Lo) 9,050 / 6,250 Free float (%)

  Shares data

  Consensus Price (IDR) 8,171 TP to Consensus Price

  Hold Dec 2018 TP (IDR) 7,500

  Pertumbuhan yang datar sejak dua tahun terakhir terjadi ketika pertumbuhan kredit melambat dan loan yield mengalami tren penurunan. Di sisi lain, laba bersih mampu tumbuh 17,6% y-y, tetapi kenaikan ini lebih disebabkan oleh kenaikan temporer non-interest income sebesar 22,9% y-y dari Rp5,8 triliun menjadi Rp7,1 triliun.

  Rebound Pertumbuhan Kredit Pada 2Q18 BMRI mencatatkan pertumbuhan kredit sebesar 11,8% y-y dari Rp682 triliun pada 2Q17 menjadi Rp762,5 triliun. Pertumbuhan tersebut kontras dengan pertumbuhan pada 1Q18 sebesar 10,1%. Lonjakan pertumbuhan kredit pada 2Q18 sangat dipengaruhi oleh segmen corporate yang mencetak pertumbuhan sebesar 23,1% menjadi Rp300,1 triliun.

  Namun, kenaikan pertumbuhan kredit yang signifikan disertai dengan penurunan tajam loan yield menjadi 9,5% yang jauh lebih rendah dibandingkan dengan loan yield pada 1Q18 sebesar 10,1%. Tekanan terhadap loan yield membuat kami menurunkan estimasi interest income pada 2018 dari Rp86,8 triliun menjadi Rp82,9 triliun.

BMRI IJ

  Target Harga Rp7,500 Kami menggunakan asumsi forward P/B sebesar 1,9x (0,5SD di atas rata- rata 4 tahun terakhir) sebagai basis metode valuasi. Target harga ini mengimplikasikan P/B 2018E sebesar 2,0x (vs 1,8x saat ini).

• 62 21 797 6202, ext:214

  Share Price Performance YTD

  Bank Mandiri Tbk | Summary (IDR bn) Source: Company Data, Bloomberg, NHKS Research

• - 32.2% 49.7% 11.1% 11.4%

  3M

  12M

  Abs. Ret. -16.3% 2.3% -2.2% 0.6%

  Rel. Ret. - 7.3% 4.3% -1.2% 2.4%

  Please consider the rating criteria & important disclaimer NH Korindo Sekuritas Indonesia Company Report | Aug 20, 2018 Bank Mandiri Tbk (BMRI) Terhimpit Tren Interest Income yang Datar Ulasan Kinerja 2Q18: Kinerja Interest Income Tidak Atraktif BMRI mencetak interest income sebesar Rp19,6 triliun (-0,2% y-y). Secara umum kinerja interest income BMRI tidak atraktif sejak 3Q16. Interest income tercatat datar di kisaran Rp19-20 triliun tiap kuartalnya.

  1M BDO Unibank 10,366 53,371 6.4% 4.1% 9.5% 20.2x 1.9x 0.9% Metropolitan Bank 5,490 41,612 6.5% 3.8% 8.3% 12.5x 1.1x 1.3% Philippine Island Bank 7,604 38,084 3.2% 3.6% 10.5% 17.2x 1.7x 2.0%

  Philippine

  Singapore

  Bank of Ayudhya 8,903 64,128 7.5% 3.7% 10.7% 12.2x 1.3x 2.1%

  Bangkok Bank 11,898 94,446 6.7% 2.4% 8.9% 11.3x 1.0x 3.2% Siam Commercial 14,897 92,841

  Thailand

  CIMB 13,429 124,711 17.0% 2.4% 9.8% 11.6x 1.2x 4.3% Malayan Banking 26,121 188,433 9.5% 1.8% 10.7% 13.4x 1.5x 5.6% Hong Leong 5,021 50,939 4.3% 1.6% 10.0% 12.0x 1.2x 2.2%

  Malaysia

  DBS 47,066 387,334 11.1% 1.9% 10.3% 13.3x 1.4x 6.7% UOB 32,648 268,287 19.2% 1.8% 11.3% 11.8x 1.3x 4.3% OCBC 34,305 340,370 21.4% 1.7% 11.5% 10.8x 1.2x 3.5%

  BMRI 21,768 82,772 44.3% 5.3% 14.5% 13.5x 1.9x 2.9% BBRI 26,652 82,886 11.0% 7.9% 19.3% 12.7x 2.4x 3.4% BBCA 39,871 55,219 12.2% 6.5% 18.8% 24.0x 4.3x 1.1% BBNI 9,370 52,203 9.4% 5.7% 15.5% 9.4x 1.4x 3.5%

  Company Report

  Company Market Cap (USD mn) Total Asset (USD mn) Net Profit Growth (LTM) Net Interest Margin (LTM) ROE (LTM) P/E (LTM) P/BV (LTM) 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. BMRI merupakan bank nomor satu di Indonesia di segmen korporasi. Pada 2Q18, BMRI menyalurkan kredit sebesar Rp300 triliun ke segmen korporasi atau 39% dari total kredit.

  Aug 20, 2018

• 13.0% 3.2% 11.7% 11.8x 1.3x 3.8%

  Company Report

  Aug 20, 2018

  Performance Highlights Interest Income (IDR bn) | 3Q15 - 2Q18 Net Profit (IDR bn) | 3Q15 - 2Q18

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

  Gross Loan (IDR bn) | 3Q15 - 2Q18 Deposit (IDR bn) | 3Q15 - 2Q18

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

  Loan Composition Loan Yield, Cost of Deposit, NIM | 3Q15 - 2Q18

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

  Company Report

  Aug 20, 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% 08/20/2018 Hold 7,500 (Dec 2018) 6,700 8,171 +11.9% 8.2%

• 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

  Aug 20, 2018

  Summary of Financials

DISCLAIMER

INCOME STATEMENT BALANCE SHEET

  

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and agents disclaim any responsibility and liability for claims, proceedings, action, losses, expenses, damages, or costs filed against or suffered by any person

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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) 6,700}

^{Target Price (IDR) 7,500 2016/12A 2017/12A 2018/12E 2019/12E}

^{Rating: Hold ROE 10.1% 12.8% 13.2% 14.0% ROA 1.4% 1.9% 2.0% 2.0% ROIC 19.1% 16.1% 15.6% 15.8% Opera ti ng ROA 7.4% 7.0% 6.7% 6.5%}

^{in IDR bn 2016/12A 2017/12A 2018/12E 2019/12E Pre-Provi s i on ROA 4.5% 4.0% 3.8% 3.7%}

^{Interest Income 76,710 79,502 82,886 91,344 Non-Interes t Income/Op. Rev 28.5% 31.1% 31.5% 28.7%}

^{Growth (% y/y) 7.2% 3.6% 4.3% 10.2% Cos t/Income 40.2% 43.4% 43.5% 42.1%}

^{Interes t Expens es (24,885) (27,174) (28,866) (32,254) Ca s h Di vi dend (IDR bn) 6,213 9,288 10,318 11,499}

^{Net Interest Income 51,825 52,327 54,019 59,090 Di vi dend Yi el d (%) 2.3% 2.5% 3.3% 3.7%}

^{Net Interest Margin 5.9% 5.3% 5.1% 5.0% Pa yout Ra ti o (%) 45.1% 45.0% 45.0% 45.0%}

^{Net Fee Income 10,774 11,856 11,896 13,012 Equi ty/As s ets 14.8% 15.1% 14.6% 13.9%}

^{Tra di ng Income 3,027 3,950 4,088 4,472 Loa n/Depos i ts 85.7% 88.5% 90.9% 92.2%}

^{Other Opera ti ng Income 6,863 7,849 8,857 6,314 Loa n/As s ets 63.7% 64.9% 67.5% 68.7%}

^{Operating Revenue 72,490 75,981 78,861 82,888 NPL 4.0% 3.5% 3.0% 2.8%}

^{Opera ti ng Expens es (29,114) (32,992) (34,288) (34,887) Loa n Los s Res erves /Loa ns 5.0% 4.7% 4.1% 3.9%}

^{Pre-provisioning OP (PPOP) 43,375 42,990 44,573 48,002 Depos i ts /Li a bi l i ti es 87.2% 86.4% 87.0% 86.6%}

^{Provi s i on for Impa i rment (24,762) (15,820) (14,679) (14,687) CASA/Depos i ts 64.2% 66.2% 66.0% 65.3%}

^{EBT 18,573 27,157 29,854 33,271 Ti me Depos i ts /Depos i ts 35.8% 33.8% 34.0% 34.7%}

^{Income Ta x (3,923) (5,714) (6,124) (6,825) Pa r Va l ue (IDR) 250 250 250 250}

^{Non-control l i ng Interes t (861) (803) (800) (892) Tota l Sha res (mn) 46,667 46,667 46,667 46,667}

^{Net Profit 13,789 20,640 22,929 25,554 Sha re Pri ce (IDR) 5,788 8,000 6,700 6,700}

^{Growth (% y/y) -32.2% 49.7% 11.1% 11.4% Ma rket Ca p (IDR tn) 270.1 373.3 312.7 312.7}

^{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 23,051 23,258 Pri ce /Ea rni ngs 19.6x 18.1x 13.6x 12.2x}

^{Pl a cement i n Ba nks 136,462 137,119 130,346 156,343 Pri ce /Book Va l ue 1.8x 2.2x 1.8x 1.7x}

^{Net Loa ns 629,068 695,432 785,827 889,660 Pri ce/Op. Revenue 3.7x 4.9x 4.0x 3.8x}

^{Inves tment 160,785 165,984 166,149 164,994 PE/EPS Growth -0.6x 0.4x 1.2x 1.1x}

^{Fi xed As s et 35,663 36,619 36,516 36,536 EV/Opera ti ng Revenue 4.1x 5.3x 4.4x 4.3x}

^{Other As s ets 53,821 65,279 72,874 75,859 EV/PPOP 6.8x 9.4x 7.8x 7.5x}

^{Total Assets 1,038,706 1,124,701 1,214,763 1,346,650 EV (IDR bn) 295,240 405,091 347,198 358,331}

^{Depos i ts 772,176 824,601 901,680 1,003,799 Op. Revenue CAGR (3-Yr) 13.0% 11.4% 6.6% 4.6%}

^{Debt 45,124 52,739 54,101 65,247 EPS CAGR (3-Yr) -8.8% 1.3% 4.1% 22.8%}

^{Other l i a bi l i ti es 68,036 77,355 81,151 90,342 Ba s i c EPS (IDR) 295 442 491 548}

^{Total Liabilities 885,336 954,695 1,036,932 1,159,387 Di l uted EPS (IDR) 295 442 491 548}

^{Ca pi ta l Stock 11,667 11,667 11,667 11,667 BVPS (IDR) 3,286 3,643 3,811 4,013}

^{Reta i ned Ea rni ngs 96,931 111,358 124,988 140,224 Op. Revenue PS (IDR) 1,553 1,628 1,690 1,776}

^{Shareholders' Equity 153,370 170,006 177,831 187,262 DPS (IDR) 133 199 221 246}

^{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 24,001 25,554 DCF (IDR bn)}

^{Deprec & Provi s i on 26,535 18,110 10,808 3,679 NOPAT 34,214 33,945 35,429 38,155}

^{Chg. In Worki ng Ca pi ta l (5,785) (4,362) (15,320) 5,927 +Depr./Amor. 26,535 18,110 10,808 3,679}

^{CFO 34,557 34,388 19,489 35,161 -Chg. i n Loa n (75,870) (82,134) (61,607) (131,882)}

^{Net Cha nges i n Loa n (75,870) (82,134) (61,607) (131,882) -Incr. (Decr.) i n Worki ng Ca p. (5,785) (4,362) (15,320) 5,927}

^{CFI (82,033) (87,382) (55,824) (132,095) (Unl evered) FCFF (20,906) (34,441) (30,690) (84,121) Di vi dends Pa i d (6,100) (6,213) (13,048) (10,318) WACC}

^{Net Cha nges i n Depos i t 85,627 52,699 30,599 102,119 Cos t of Debt (Ta x Adj.) 9.0% 7.2% 7.7% 8.0%}

^{CFF 79,369 53,401 9,694 97,141 Cos t of Equi ty (COE) 10.5% 12.1% 11.9% 12.0%}

^{Net Changes in Cash 31,893 407 (26,641) 207 WACC (%) 10.3% 11.5% 11.3% 11.3%}

^{RIM Sprea d (FROE-COE) (%) 1.1% 1.4% 1.6% 2.3% Res i dua l Income (IDR bn) 1,283 2,115 2,638 4,151}

^{By Geography % Shareholders % Equi ty Cha rge 12,506 18,525 20,291 21,403}

^{Indones i a 78.1 Republ i c of Indones i a 60.0 EVA Uni ted Sta tes 12.8 Ha rri s As s oci a tes 2.6 Inves ted Ca pi ta l (IDR bn) 159,392 198,494 222,745 231,932 Luxembourg 2.0 Bl a ckRock Inc 2.1 ROIC-WACC (%) 11.2% 5.6% 4.6% 5.1% Uni ted Ki ngdom 2.0 Va ngua rd 1.4 EVA (IDR bn) 17,856 11,174 10,232 11,862}

  CASH FLOW STATEMENT DCF, RIM & EVA OWNERSHIP PROFITABILITY & STABILITY _{August 16, 2018 Dec 2018}

  ^{Analyst: Raphon Prima}