reports
- Posmarito Pakpahan
Banking – 1H25 Results Preview: Diverging Earnings Growth
We expect the banking sector’s 1H25 results to be broadly in line with expectations, despite a possible underperformance from BBRI and BRIS. BBCA remains strong while BBNI and BMRI should post muted earnings growth. NIM pressure is likely to persist due to tight liquidity. Loan growth decelerated but is expected to recover in 2H25. NPLs for auto and mortgage are inching up, but overall asset quality remains sound. We maintain OVERWEIGHT, supported by a dovish BI policy, easing SRBI yields and ex...
- Maskun Ramli
- Posmarito Pakpahan
- Posmarito Pakpahan
Banking – Loan Growth Slows, All Eyes On Fiscal Spending Acceleration
Loan growth slowed to 8.1% yoy in May 25 due to tight liquidity and weak credit appetite. Deposit growth remained soft at 3.9% yoy, weighed down by front-loaded government bond issuance, diverting liquidity. We expect BI to continue unwinding SRBI and deliver further rate cuts in 2H25. Fiscal spending showed early signs of acceleration to Rp1,406t in 6M25 (5M25: Rp1,016t). With the deficit revised to 2.78% of GDP, further fiscal spending is anticipated. Maintain OVERWEIGHT on the sector.
- Maskun Ramli
- Posmarito Pakpahan
- Posmarito Pakpahan
Banking - Banking Liquidity: Measures Underway
Liquidity remains tight with deposit growth slowing and industry LDR rising to 90% in Apr 25. Banks relied on BI repo facilities while the overnight rate has consistently surpassed BI rate in recent weeks. Nevertheless, we expect liquidity to improve in 2H25 due to the recent rate cut, lower PLM, and higher foreign borrowing limits. SRBI issuance has eased though it remains substantial. Expected higher fiscal spending in 2H25 could facilitate greater liquidity. Maintain OVERWEIGHT on the sector.
- Maskun Ramli
- Posmarito Pakpahan
- Anas Fitri Bin Ahmad
- Benjaphol Suthwanish
- Jo Yee Ng
- Jonathan Koh
- Kitpon Praipaisarnkit
- Lester Siew
- Posmarito Pakpahan
- Shirley Wang Xueyi
- Stella Guo Yuting
- Tham Mun Hon
- Thanawat Thangchadakorn
- Ziv Ang Sze Champ
Regional Morning Meeting Notes: Wednesday, January 15, 2025
GREATER CHINA Economics Money Supply Positive signs despite weak credit demand. Sector Baijiu Industry remains under pressure; conservative tone toward 2025; channel healthiness and price stability the key focuses. Downgrade the baijiu sector to UNDERWEIGHT. Metals and Mining ...
000858 WULIANGYE YIBIN CO. LTD. CLASS A
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
TISCO TISCO FINANCIAL GROUP
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
BMRI PT BANK MANDIRI (PERSERO) TBK
BBCA PT BANK CENTRAL ASIA TBK
TRUE TRUE CORP. PUBLIC CO. LTD.
2899 ZIJIN MINING GROUP CO. LTD. CLASS H
BTPS BANK TABUNGAN PENSIUNAN NASIONAL SYARIAH
IOI IOI CORP BHD
KLK KUALA LUMPUR KEPONG BHD
SPSB SP SETIA BHD
GENP GENTING PLANTATIONS BHD
TXG 10X GENOMICS INC CLASS A
HAPL HAP SENG PLANTATIONS HOLDINGS BHD
UHU UNITED HAMPSHIRE US REIT
KMLY KIMLY LTD
SCGP SCG PACKAGING PCL
BBTN BANK TABUNGAN NEGARA PERSERO TBK PT
BBNI BANK NEGARA INDONESIA PERSER
123F 123FAHRSCHULE SE
BCOW 1895 BANCORP OF WISCONSIN INC
BBYB BANK NEO COMMERCE
Z29 029 GROUP SE
SDG SD GUTHRIE BHD
1787 SHANDONG GOLD MINING CO LTD
- Posmarito Pakpahan
Banking – BBCA And BRIS To Deliver Double-digit Earnings Growth
Ytd net foreign sell-off has continued for some Indonesian banks which we believe provided attractive entry prices. Amid the headwinds from the uncertainty of rate cuts, tighter liquidity, and government policies, BBCA and BRIS could deliver double-digit earnings growth in 2024/25. Given its low LDR and strong CASA franchise, BBCA has room to manage its NIM. Hajj Wadiah savings accounts, the gold financing business, and bancassurance could be earnings growth drivers for BRIS in 2025.
- Maskun Ramli
- Posmarito Pakpahan
- Posmarito Pakpahan
Banking – Investor Feedback: Investors Cautious On Rate Cut Uncertaint...
Feedback from investors during our annual strategy conference in Malaysia showed that they remain cautious on Indonesian banks as they are less optimistic about the rate cut outlook and liquidity tightening. We believe that higher government spending, which focuses on boosting consumption, could revitalise the domestic economy. Valuation is attractive as the big four banks are trading close to the mean five-year P/B. We maintain OVERWEIGHT on the sector. Top picks: BBCA, BMRI, BBNI, BRIS and BBT...
- Maskun Ramli
- Posmarito Pakpahan
- Posmarito Pakpahan
Banking - Rate Cut Uncertainty: BUY BBCA And BMRI
Trump’s tariffs and lower tax policies could lead to higher inflation and pose a potential risk that the Fed may slow down rate cuts in 2025. Higher government spending and strong loan growth are expected to support money supply growth. High LDR of 87% indicates stiffer competition in low-cost funding. Given the high CoF, we expect banks to face less intense competition in the loan market to manage the NIM. We maintain OVERWEIGHT on sector. Top picks: BBCA and BMRI.
- Maskun Ramli
- Posmarito Pakpahan
- Jonathan Koh
- Keith Wee Teck Keong
- Kwanchai Atiphophai
- Limartha Adhiputra
- Maskun Ramli
- Posmarito Pakpahan
Indonesia Daily - Friday, October 6, 2023
Banks - Regional: ASEAN Banks: Quarterly update. Amman Mineral Internasional (AMMN IJ/NOT RATED/Rp6,300): Most efficient copper and gold producer with lowest cash cost globally. TRADERS’ CORNER GoTo Gojek Tokopedia (GOTO IJ): Technical BUY Unilever Indonesia (UNVR IJ): Technical BUY
- Stevanus Juanda
Strategy - Feedback On Inflation-linked Investment Opportunities
The feedback on our strategy report is as follows: a) final 50bp rate hike by the US Fed is likely but most agree that it is an opportunity to buy, b) most clients like the mid-cap banks idea as their valuations are still attractive, c) there was mixed feedback on our technology recommendations, and d) valuations of large-cap banks have priced in the upsides of a rate cut (only BBNI still trades at average P/B). Top 10 picks: BBNI, BBTN, BTPS, MYOR, HMSP, BSDE, CTRA, MAPI, BUKA and GOTO.
- Johnny Yum
- Maskun Ramli
- Stevanus Juanda
Indonesia Daily - Tuesday, July 11, 2023
Strategy: Feedback On Inflation-linked Investment Opportunities: Our top picks: Banking − BBNI, BBTN, BTPS; consumer − MYOR, HMSP; property − BSDE, CTRA; retail − MAPI; technology − BUKA, GOTO. TRADERS’ CORNER Astra Agro Lestari (AALI IJ): Technical BUY Bank Aladin Syariah (BANK IJ): Technical BUY
- Johnny Yum
- Stevanus Juanda
Strategy - Inflation-linked Investment Opportunities Emerging
With inflation likely to trend downwards over the next 12 months, we see downside risks to interest rates. We opine that banks are likely to outperform during rate cuts but not six months prior. Automobile tends to outperform six months before a rate cut but not during one. Surprisingly, the property sector does not outperform during and before rate cuts. Our end-23 target for the JCI is 7,100. Our top 10 picks: BBNI, BBTN, BTPS, MYOR, HMSP, BSDE, CTRA, MAPI, BUKA, GOTO. SELL coal names ADRO, IT...
- Johnny Yum
- Maskun Ramli
- Stevanus Juanda
Indonesia Daily - Thursday, July 6, 2023
Strategy: Inflation-linked Investment Opportunities Emerging: Our top picks: Banking − BBNI, BBTN, BTPS; consumer − MYOR, HMSP; property − BSDE, CTRA; retail − MAPI; technology − BUKA, GOTO. TRADERS’ CORNER Bumi Resources (BUMI IJ): Technical BUY United Tractors (UNTR IJ): Technical BUY
- Johnny Yum
- Limartha Adhiputra
- Paula Ruth
- Posmarito Pakpahan
- Stevanus Juanda
Strategy - Inflation-linked Investment Opportunities Emerging
With inflation likely to trend downwards over the next 12 months, we see downside risks to interest rates. We opine that banks are likely to outperform during rate cuts but not six months prior. Automobile tends to outperform six months before a rate cut but not during one. Surprisingly, the property sector does not outperform during and before rate cuts. Our top 10 picks: Banking − BBNI, BBTN, BTPS; consumer − MYOR, HMSP; property − BSDE, CTRA; retail − MAPI; technology − BUKA, GOTO. SELL coal ...
BBRI PT BANK RAKYAT INDONESIA (PERSERO) TBK CLASS B
ITMG INDO TAMBANGRAYA MEGAH
KLBF PT KALBE FARMA TBK
INTP PT INDOCEMENT TUNGGAL PRAKARSA TBK
SMRA PT SUMMARECON AGUNG TBK
MYOR MAYORA INDAH
UNVR PT UNILEVER INDONESIA TBK
INCO VALE INDONESIA
MAPI MITRA ADIPERKASA
BSDE PT BUMI SERPONG DAMAI TBK
MIKA MITRA KELUARGA KARYASEHAT
PTI TELEKOMUNIKASI INDONESIA TBK PT (ADR)
HMSP HM SAMPOERNA TBK PT
BTPS BANK TABUNGAN PENSIUNAN NASIONAL SYARIAH
BUKA BUKALAPAK.COM PT TBK
BBTN BANK TABUNGAN NEGARA PERSERO TBK PT
BBNI BANK NEGARA INDONESIA PERSER
EXCL XL AXIATA TBK PT
GOTO GOJEK TOKOPEDIA TBK PT
SMGR SEMEN INDONESIA PERSERO TBK
MDKA MERDEKA COPPER GOLD TBK PT
- Posmarito Pakpahan
Banking – Pressure From Rising Interest Expenses, But Earnings Continu...
The interest expenses of the Big Four banks and BBTN grew sharply, up 60.3% yoy in 5M23, but the higher yield and solid loan growth supported net interest income to jump 7.1% yoy. Manageable opex and lower CoC drove 5M23 net profit growth of 17.5% yoy. Liquidity remained ample with LDR standing at 84.4% in May 23. We believe the political activities in 2H23 and sound macroeconomic backdrop can support earnings growth. Maintain BUY. Top picks: BBNI & BMRI.
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