ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri (BMRI IJ)</a> stood out from its peers with higher loan growth and lower cost of credit with PPOP growth of +17.3% YoY and its ROE reaching 23%. </li>
<li>The bank experienced a slight decline in NIM in 4Q2023 but asset quality remains solid and its digital initiatives continue to reduce costs and attract new users.</li>
<li>
<a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">Bank Mandiri</a>'s guidance for 2024 is more positive than peers for loan growth, as it continues to push out its value chain lending strategy into higher-yielding segments. Valuations remain attractive.</li>
</ul>



Bank Mandiri (BMRI IJ) stood out from its peers with higher loan growth and lower cost of credit with PPOP growth of +17.3% YoY and its ROE reaching 23%. 
The bank experienced a slight decline in NIM in 4Q2023 but asset quality remains solid and its digital initiatives continue to reduce costs and attract new users.

Bank Mandiri's guidance for 2024 is more positive than peers for loan growth, as it continues to push out its value chain lending strategy into higher-yielding segments. Valuations remain attractive.


Bank Mandiri (BMRI IJ) - Setting the Pace in 2024

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>BMRI reported FY23 net profit of Rp55.1tr (+34%yoy) beating our forecast and the cons. on 4Q23 higher recoveries and lower provisions.</li><li>We expect the FY24F earnings growth to normalize due to our expectation of softer NIM and CoC normalization.</li><li>Maintain BUY with a higher TP of Rp7,600 as we raise our FY24F net profit estimate by 5%, resulting in a higher ROE of 21.2%.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

BMRI reported FY23 net profit of Rp55.1tr (+34%yoy) beating our forecast and the cons. on 4Q23 higher recoveries and lower provisions.We expect the FY24F earnings growth to normalize due to our expectation of softer NIM and CoC normalization.Maintain BUY with a higher TP of Rp7,600 as we raise our FY24F net profit estimate by 5%, resulting in a higher ROE of 21.2%.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bank Mandiri (BMRI IJ) - Raising Our FY24-25F Forecast and TP Post 4Q23 Earnings Beat

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia's</a> results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. </li>
<li>The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.</li>
<li>Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. </li>
</ul>



Bank Rakyat Indonesia's results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. 
The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.
Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. 


Bank Rakyat Indonesia (BBRI IJ) - Pushing the Margins of Profitability

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<li>
<a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a> booked a strong finish to the year with PPOP rising by +15.4% YoY and zero provisioning in 4Q2023, driven by loan growth of +13.9% YoY. </li>
<li>The bank's net interest income grew by +19.5% YoY, with a stable NIM of 5.5% in 4Q2023 and CASA growth of +4.3% YoY, bringing the CASA ratio to 80.3%.</li>
<li>
<a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">BCA</a> remains a core holding amongst Indonesian banks, with conservative bank guidance of +9%-10% loan growth, stable NIMs and CoC in 2024. Valuations reflect bank returns and quality.</li>
</ul>



Bank Central Asia (BBCA IJ) booked a strong finish to the year with PPOP rising by +15.4% YoY and zero provisioning in 4Q2023, driven by loan growth of +13.9% YoY. 
The bank's net interest income grew by +19.5% YoY, with a stable NIM of 5.5% in 4Q2023 and CASA growth of +4.3% YoY, bringing the CASA ratio to 80.3%.

BCA remains a core holding amongst Indonesian banks, with conservative bank guidance of +9%-10% loan growth, stable NIMs and CoC in 2024. Valuations reflect bank returns and quality.


Bank Central Asia (BBCA IJ) - Transacting for a Hybrid Society

Equity Research Analyst - Long-Short

Raj S, CA, CFA

Artoval Advisors

Art’o’val stands for Art of Valuation. Artoval Advisors LLP is a professionally run advisory firm catering to various financial advisory services including Valuation, Investment Research, Training, Accounting, CFO Services and other ancillary services.

We are passionate about what we do and strongly believe in working with our clients as their extended teams. With Artoval Advisors as their trusted partner, our clients find it easy to achieve efficiency in service delivery without compromising on quality.

True Art of Valuation

Thematic (Sector/Industry)

<ul>
<li>Indonesian banks have delivered robust results YTD23 in areas like loan growth, asset quality, and ROEs; the sector is among the best in ASEAN with impressive earnings and growth potential.</li>
<li>The 4Q23 results are expected to continue the positive trends in loan growth, asset quality and ROE; the outlook for FY24 is underpinned by the strong Indonesian economy.</li>
<li>
<a href="https://www.smartkarma.com/entities/bank-mandiri-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:441:1" rel="noopener">BMRI IJ</a> and <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">BBNI IJ</a> are comparatively underrated in terms of valuations and have the potential for strong re-rating while <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">BBCA IJ</a> and <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">BBRI </a>promise strong long-term compounding at fair valuations.</li>
</ul>


Indonesian banks have delivered robust results YTD23 in areas like loan growth, asset quality, and ROEs; the sector is among the best in ASEAN with impressive earnings and growth potential.
The 4Q23 results are expected to continue the positive trends in loan growth, asset quality and ROE; the outlook for FY24 is underpinned by the strong Indonesian economy.

BMRI IJ and BBNI IJ are comparatively underrated in terms of valuations and have the potential for strong re-rating while BBCA IJ and BBRI promise strong long-term compounding at fair valuations.


Indonesia Banks: How Are BBCA, BBRI, BMRI and BBNI Placed for 2024?

Indonesia

PT Bank Mandiri (Persero) Tbk is formed by the merger of four state-owned banks, namely Pt Bank Bumi Daya, PT Bank Dagang Negara, PT Bank Ekspor Import Indonesia (Bank Exim), PT Bank Pembangunan Indonesia (Bank Bapindo). The Bank operates in the commercial banking services.

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Bank Mandiri Persero (BMRI IJ)

Bank Mandiri (BMRI IJ) - Setting the Pace in 2024

Bank Mandiri's guidance for 2024 is more positive than peers for loan growth, as it continues to push out is value-chain lending strategy into...

Angus Mackintosh

Bank Mandiri (BMRI IJ) - Raising Our FY24-25F Forecast and TP Post 4Q23 Earnings Beat

BMRI reported FY23 net profit of Rp55.1tr (+34%yoy) beating our forecast and the cons. on 4Q23 higher recoveries and lower provisions.

BRI Danareksa Research

Bank Rakyat Indonesia (BBRI IJ) - Pushing the Margins of Profitability

Bank Rakyat Indonesia's results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to...

Angus Mackintosh

Bank Central Asia (BBCA IJ) - Transacting for a Hybrid Society

BCA remains a core holding amongst Indonesian banks, with conservative bank guidance of +9%-10% loan growth, stable NIMs and CoC in 2024....

Angus Mackintosh

Indonesia Banks: How Are BBCA, BBRI, BMRI and BBNI Placed for 2024?

While the sector faces constrained re-rating potential, certain stocks, stock picking opportunities exist. Equity strategy: the potential for...

Raj S, CA, CFA

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