JAKARTA, Indonesia, Nov. 9, 2023 /PRNewswire/ -- PT Bank Rakyat Indonesia (BRI) Persero Tbk. (IDX: BBRI)'s financial performance in Q3 2023 has ignited recommendations among analysts, who now advise 'buy' or 'hold' due to promising performance in the microsegment sector.
"This segment is expected to help counterbalance some of the pressure on the net interest margin as interest rates continue to rise, thanks to its strong asset quality," explained Melissa Kuang, Chartered Financial Analyst at Goldman Sachs Research.
PT UBS Sekuritas Indonesia's report raises BRI's target price to IDR 6,925, a 2-3% increase from their previous projection of IDR 6,700. This is based on a 7.25% risk-free rate, a consistent 20.5% ROI, and sustained 9% growth.
Furthermore, BNI Sekuritas targets BRI's price at IDR 6,000, in line with its current 1-year Price-to-Book Value of 2.3x, matching its 5-year average. Despite asset quality challenges in Q3-2023 for mass-market-focused financial institutions, Q4 improvements propelled by election-related funding are expected.
PT Verdhana Sekuritas predicts BRI's price at IDR 6,150 with a 'buy' recommendation, using the DuPont methodology: 6.5% risk-free rate, 7.8% equity cost, 0.8x beta, and ROA adjusted for an 18.0% CAR. They anticipate increased government spending to support the microsegment with cash subsidies to mitigate El Nino's impact.
Optimistic about BRI's income, Yunita Sekuritas has recommended a 'buy' as BRI's long-term potential reaches over 50 million potential customers in this segment with a 12-month target price of IDR6,800 (US$0.43), a +31.4% potential gain.
CGS CIMB Sekuritas anticipates the Q4-2023 general election's impact on MSME loan disbursement. They expect BRI to uphold an 80-85% dividend payout ratio for the next five years. Their 'Add' recommendation persists with an unchanged IDR 6,100 per-share target price, employing a GGM model at 2.7x P/BV FY24F. Possible catalysts involve a more favorable macroeconomic environment that could reduce credit costs.
In September 2023, BRI reached consolidated asset growth of 9.93% YoY, reaching IDR 1,851.97 trillion, and a IDR 44.21 trillion post-tax net profit, marking a 12.47% annual increase. "The main growth contributors include double-digit growth in loan disbursement, an increase of third-party funds and low-cost funding, maintained credit quality, and a growing proportion of fee-based income within BRI's overall revenue," concluded Sunarso, BRI President Director.
More information at www.bri.co.id.