FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

RESEARCH COMMENTARY

ANTM: FY23 Result Highlights; Below our estimate and the consensus

• ANTM recorded lower earnings in FY23 (down by 19.5% yoy to Rp3 tn) or below our estimate (87.9%) and the consensus (83.9%).
• Revenue was down 10.6% yoy to Rp41 tn due to lower gold sales volume during this period (-25.3% yoy) and lower ASP for its FeNi and nickel ore.
• On a quarterly basis, gross profit slumped 88.3% qoq in 4Q23 as a result of ANTM booking impairment costs of around Rp518 bn in 4Q23 which resulted in negative EBIT of -Rp728 bn in 4Q23 (vs. +Rp1 tn in 3Q23).
• ANTM booked one-off gains from the divestment of FHT of Rp571 bn. Meanwhile, income from associates rose 45.6% to Rp223 bn helping its earnings turn positive to Rp229 bn (-76.1% qoq) in 4Q23. (Hasan Barakwan, BRIDS)

ARTO Bank Only Feb24 Results

• ARTO delivered NP of Rp6.2bn in Feb24, slightly lower (2%) than in Jan24 due to flat Net Interest Income but higher opex, slightly offset by lower provisions.
• Monthly NIM remained flat as the 13bps lower asset yield was offset by a 25bps lower CoF in Feb24. CoC continued to improve reaching 1.5% in Feb24, down from 1.8% in Jan24.
• Despite the lower NII (-15% yoy), ARTO reported NP of Rp12.7bn in 2M24 (+58% yoy) from higher fee income (+121%) and lower provisions (-58%).
• NIM declined to 8.0% in 2M24 from 11.1% in 2M23 and 10.0% in FY23 as the bank`s high-yield Sharia loan portion continued to decline. CoF remained stable at 3.1% in 2M24 vs FY23.
• Encouraging deposit growth was seen in Feb24 at 4%, while loan growth was reported to be slower at 1% mom. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BBCA Bank Only Feb24 Results

• BBCA`s net profits declined 15% mom to Rp3.8tr in Feb24 due to 7% lower NII and doubled provisions (CoC also doubled from 0.3% in Jan to 0.6% in Feb).
• Despite the lower (11bps) CoF mom, BBCA's NIM declined to 5.7% (-42bps mom) due to the lower asset yield of 52bps, similar to other banks.
• Compared to February last year, BBCA’s net profit grew 12% yoy with healthy Net Interest Income growth of 6%, despite the slightly lower NIM (17bps) supported by 15% loan growth.
• Despite the spike in provisions, BBCA's net profit was Rp8.3tr in 2M24 (+2% yoy), driven by higher NII (+6%) and flat opex. In 2M24, CoF rose 25bps while the asset yield remained flat, resulting in lower NIM.
• BBCA recorded a higher LDR of 73% in Feb24, up from 67% in Feb23, supporting its higher NII despite its 19bps lower NIM, backing our thesis that the bank's higher liquidity will support growth this year. 
• The bank’s LDR was higher as loans grew by 15% while deposits grew by only 5% yoy. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BBNI Bank Only Feb24 Results

• BBNI’s PPOP was 2% lower both mom and yoy in Feb24 driven by the lower Net Interest Income that declined 8% mom and 10% yoy as NIM declined. Net profits were reported at Rp1.6tr (+5% mom, +2% yoy) supported by the lower provisions.
• NIM declined to 3.8% (-32bps momo, -82bps yoy) in Feb24. Despite the improving CoF by 12bps mom, the Feb24 NIM declined due to a lower asset yield (47bps).
• CoC stood at 1.0% in Feb24 and 1.1% in 2M24 (flat yoy), lower than 1.4% in FY23F.
• BBNI’s 2M24 net profits reached Rp3.0tr (-6% yoy) with NII down by 11% (90bps lower NIM compared to 2M23), slightly offset by higher other operating income resulting in PPOP that declined by 7% yoy.
• BBNI reined in opex (only +2% yoy in 2M24) still resulting in higher CIR of 45.6% (from 43.3%) due to the lower NII. 
• Both loans and deposits recorded negative 1% growth mom, resulting in Feb24 yoy growth of 7% and 10%, respectively. YTD loans and deposits balances still reported negative growth. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BBYB Bank Only Feb24 Results

• BBYB continued to deliver a positive bottom line in Feb24 with NP of Rp5.7bn (+8% mom, +41% yoy) bringing its 2M24 NP to Rp11.1bn (+2% yoy).
• Despite the lower mom NIM in Feb24, the monthly profits were supported by a 21% reduction in provisions with CoC declining to 22.9% in Feb24 from 27.7% in Jan24 (vs 25.4% in FY23).
• The bank`s NIM declined to 19.2% in Feb24 from 23.0% in Jan24 due to the 415bps lower asset yield amid the 33bps improvement in CoF.
• All BBYB`s key ratios in 2M24 improved compared to FY23, i.e., 167bps higher NIM, 12% lower CIR and 11bps lower CoC.
• Despite the positive performance in Feb24, we note that both loans and deposits reported negative growth of 4% and 5%, respectively mom, resulting in yoy declines of 5% and 11%. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BMRI Bank Only Feb24 Results

• In 2M24, BMRI recorded a net profit of Rp7.2tr (-3% yoy) as it realized a flat PPOP (-1% yoy). Furthermore, although provisions increased by 11%, CoC remained stable at 0.9%.
• The 20bps decline in NIM to 4.9% was primarily due to a 63bps increase in CoF, which offset the 26bps increase in the asset yield. However, NII managed to grow by 5%, driven by a higher LDR from 80% to 91%.
• The increase in CIR by 62bps was mainly attributed to a 13% decline in other operating income, which was driven by a significant 47% decrease in other income.
• In Feb24, provisions saw a significant jump of 71% mom and 44% yoy, resulting in a fall in net profit of 13% mom and 8% yoy.
• On a monthly basis, despite the 29bps decline in EA yield, CoF decreased by 32bps, which resulted in a flat NIM and a flat NII mom.
• Loans and customer deposits growth amounted to 19% and 6% yoy, respectively. However, the growth was flat mom for both.
• BMRI`s 2M24 key ratios all deteriorated compared to the FY23 key ratios. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

HEAL FY23 Result: Below Our Forecast and Consensus Estimates, Lower PATMI Share as % of PAT

• HEAL reported 4Q23 Net Profit after Taxes and Minority Interest (PATMI) of Rp89bn (-40% qoq , +67% yoy), resulting in FY23 PATMI of Rp437bn (+47% yoy). At the Profit after Taxes (PAT) level, HEAL booked Rp559bn (+48%yoy), forming 110% of our estimate.
• A higher Non-Controlling Interest (NCI) contribution resulted in a lower PATMI share as % of PAT, whereby the FY23 figure stood at 78.1% vs. 79.0% in 9M23. Hermina's NCI comprises of the company's partners in its hospital network subsidiaries, consisting of specialist doctors. The lower PATMI share as % of PAT means that HEAL's FY23 result is 90.3% and 92.5% of our estimate and the consensus PATMI, i.e. Below.
• Meanwhile, at the operational level, FY23 revenue was booked at Rp5.8tn (in-line with our estimate and the cons.), with EBITDA margins at 25.5%, in line with the management’s guidance. Inpatient and outpatient revenue recorded positive double-digit growth at 18% yoy in both segments. The cost of medicines declined by 231bps as a % of total revenue (in FY23 the figure was 22.5%), demonstrating the management's efforts in cost-efficiency.
• We currently have a Buy rating on the stock with a TP of Rp1,800, implying FY24F EV/EBITDA of 17.6x. More details on volume developments and other key drivers will become available at an earnings call this afternoon (Mar 28 2024 at 4.30 PM JKT Time). (Ismail Fakhri Suweleh – BRIDS)

MAPA FY23 earnings: Inline with consensus estimates

• MAPA reported 4Q23 net profit of Rp471bn, +28% yoy and +26% qoq, leading to a FY23 bottom line of Rp1.39tr, +18% yoy. The FY23 net profit was 92% of our FY23F (i.e., below) and 97% of consensus estimates (i.e., inline).
• In FY23, revenue from the domestic market (79% contribution) booked solid growth of 25% yoy, while overseas sales reported robust growth of +126% yoy, mainly driven by Singapore, Thailand and Malaysia.
• By the end of Dec23, MAPI reported an improved FY23 gross margin by 80bps to 48.7% to offset higher opex/revenue of 33.7% (FY22: 31.8%). Below the operating line, higher finance costs and provisions for inventory allowances put pressure on the bottom line. (Natalia Sutanto – BRIDS)

MAPI FY23 earnings: Below our forecast and consensus estimates

• MAPI reported 4Q23 net profit of Rp404bn, down 26% yoy and -9% qoq, leading to a FY23 bottom line of Rp1.9tr, down 10% yoy. In 4Q23, revenue from specialty and dept stores reported solid growth while 4Q23 F&B revenue was down by 14% qoq and 5.2% yoy. As a result, F&B revenue reported slower FY23 growth of 16.4% yoy (9M23: 25% yoy).
• A tepid F&B top line led to a negative 4Q23 EBIT margin for the F&B segment, which led to MAPI’s FY23 EBIT margin of 10.8% (FY22: 11.4%). Below the operating level, higher provisions for inventory allowances (Rp90bn) and forex losses (Rp33bn) put pressure on the FY23 bottom line.
• The FY23 net profit was 94% of our FY23F and 90% of consensus estimates, i.e., below. (Natalia Sutanto – BRIDS)

BRIDS Poultry – MAIN 4Q23 Results – above

• MAIN booked core net profits of Rp149bn (+5-fold yoy) higher than our FY23F (129%). Including fair value of biological assets and FX losses, reported net profits came in at Rp63bn (+142bn yoy), below our estimate (58%) and the consensus (58%).
• The significant growth in profitability in FY23 was driven by 8% growth in gross revenues and margin expansion stemming from the feed business, partly offset by lower DOC and broiler segments declining margins. Off a high base in 3Q23, MAIN`s operating profits declined 66% to Rp81bn in 4Q23 due to the contraction in the DOC segment margin and bigger losses in the broiler segment, partly offset by higher feed margins.
• DOC`s margin saw a sharp decline (-19.3%) in 4Q23 from +23.0% in 3Q23 due to the lower DOC ASP during the quarter. In 4Q23, the broiler segment reported bigger losses with a -9.6% margin from -7.2% in the previous quarter due to weak livebird prices.
• Unlike CPIN and JPFA, MAIN’s feed margin increased slightly (56bps) to 9.6% in 4Q23 supporting the positive bottom line.  (Victor & Tita – BRIDS)

MIKA FY23 Result: Inline with Our Estimate and the Consensus

• MIKA reported 4Q23 Net Income of Rp230bn (-1.3% qoq, -12.8% yoy), bringing its FY23 net profit to Rp916bn (-9.1% yoy). The FY23 result is in-line with our estimate and the consensus, reaching 99.4% and 96.7%, respectively.
• Both Inpatient days and outpatient visits in FY23 show higher numbers at +10.7% and +8.8%, respectively. However, revenue intensity for IP and OP declined by -2.7% and -7.4% yoy, with the average length of stay also down by 1.5%yoy. Such depicts the volume-driven FY23 market conditions.
• Overall revenue grew by 5.3% yoy in FY23, as guided by the management. Meanwhile, medicine costs as a % of sales rose by 2%, with overall COGS and Opex up by 8.3% and 20.1% yoy, respectively. The EBITDA margin contracted by 200bps in FY23 to 35.2%, yet still in-line with market expectations and the management’s guidance. More details will be available at the earnings call on Apr 2, 2024 @4.PM JKT time. (Ismail Fakhri Suweleh 

TBIG IJ FY23 earnings, BUY, TP:2,500 – inline

• TBIG delivered Rp442bn of net profit in 4Q23 (+2.9%qoq, +9.3%yoy).
• The company delivered a marginal qoq increase in 4Q23 revenue (+0.9%qoq) as XL and Smartfren offered incremental tower revenue, while fiber revenue increased as well. EBITDA was flat (slightly lower EBITDA margin in the quarter).
• Amortization from the cost of loans at Rp83bn offered upside in pretax income. But significantly higher tax charges offset this upside.
• TBIG continued building towers and adding collocations ending with a slightly lower tenancy ratio of 1.84x.
• TBIG delivered Rp1.56tr of net profit in FY23, well inline with our estimate/the consensus. (Niko Margaronis - BRIDS)

 

MARKET NEWS

MACROECONOMY

US PCE slightly Accelerated To 2.5% yoy in Feb24

The US PCE slightly accelerated to 2.5% yoy in Feb24, marking a 0.3% increase on a monthly basis. However, the core PCE continued to decelerate, with the annual core PCE showing a 2.8% increase compared to Jan's 2.9% increase. These figures were highly anticipated due to the similar pattern observed in the CPI numbers. (Bloomberg)

 

China's NBS Manufacturing PMI Expanded to 50.8

China's NBS Manufacturing PMI expanded for the first time in six months, reaching 50.8, which also marks the fastest expansion pace in a year. The NBS measurement primarily comprises large enterprises and mostly state-owned enterprises (SEO). Output saw a rise, and new orders increased for the first time in seven months. Additionally, foreign sales picked up, with buying levels showing gains. (Bloomberg)

 

SECTOR

Banking: OJK Officially Ends Credit Restructuring Stimulus

As of yesterday (March 31, 2024), the Financial Services Authority (OJK) concluded its Loan Restructuring stimulus, a program introduced in response to the COVID-19 pandemic, for the banking industry. OJK's assessment shows that the current condition of the banking industry is healthy and has sufficient capital to manage the uncertainties posed by global risks. (Bisnis)

 

CORPORATE

EXCL: Eid Holiday Traffic Projection and Gorontalo-Palu Backbone Network Inaugration

EXCL projects that service traffic will increase by 10%-20% compared to normal days during the Eid holiday period. EXCL guarantees the network's ability to serve traffic spikes by increasing capacity 2-3 times from normal days. In addition, mobile BTS fleets of around 94 units are deployed and placed to support network strengthening in various locations prone to traffic density.

 

In other news, EXCL inaugurated the 1,150 km Gorontalo—Palu fibre optic backbone network to serve the surge in mobile service traffic throughout Sulawesi. XL Axiata collaborated with PT Alita Praya Mitra to construct this backbone network, which began construction in 2023 and connects two provinces in Sulawesi. (Kontan)

 

WIKA Obtained New Contracts Worth Rp3.17tr as of Feb24

WIKA obtained new contracts worth Rp3.17tr (51.5% yoy) until Feb24. The most significant contribution of the new contracts came from the infrastructure and building segment (53.7%), followed by Engineering, Procurement, Construction, and Commissioning (EPCC), industry and property, and investment. (Kontan)

 

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