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

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<li>
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> released an impressive set of FY2021 results, as new financing picked up significantly and funding and credit costs declined in 4Q2021.</li>
<li>Management is optimistic on the outlook for new financing in 2022 plus the potential for significant tailwinds from the association with GoTo plus inorganic growth opportunities. </li>
<li>
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia</a> trades on 2.2x FY22E PBV with a forecast ROE of 16.2%, above its 5-year average PBV but it deserves a re-rating given its association with GoTo.</li>
</ul>



BFI Finance Indonesia (BFIN IJ) released an impressive set of FY2021 results, as new financing picked up significantly and funding and credit costs declined in 4Q2021.
Management is optimistic on the outlook for new financing in 2022 plus the potential for significant tailwinds from the association with GoTo plus inorganic growth opportunities. 

BFI Finance Indonesia trades on 2.2x FY22E PBV with a forecast ROE of 16.2%, above its 5-year average PBV but it deserves a re-rating given its association with GoTo.


BFI Finance Indonesia (BFIN IJ) - Catching a Digital Wave with GoTo?

<ul>
<li>The confirmation that Jerry Ng, one of the major shareholders of <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago</a> will take a controlling stake in <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia</a> should create a win-win combination.</li>
<li>
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia</a> brings best-in-class exposure to multi finance, whilst integration with <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago</a> and GoTo group should help it to accelerate the company's digitalisation and boost growth.</li>
<li>The company trades on 2.7x FY21E PBV with a forecast ROE of 14.7% for FY2021E and 18.5% in FY2023E but historically it has generated ROEs of 25% plus.</li>
</ul>


The confirmation that Jerry Ng, one of the major shareholders of Bank Jago will take a controlling stake in BFI Finance Indonesia should create a win-win combination.

BFI Finance Indonesia brings best-in-class exposure to multi finance, whilst integration with Bank Jago and GoTo group should help it to accelerate the company's digitalisation and boost growth.
The company trades on 2.7x FY21E PBV with a forecast ROE of 14.7% for FY2021E and 18.5% in FY2023E but historically it has generated ROEs of 25% plus.


BFI Finance Indonesia (BFIN IJ) - Taking the Digital High Road

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>The review period for the LQ45 Index ended on 31 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.</li>
<li>We see <a href="https://www.smartkarma.com/entities/waskita-karya-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:15739:1" rel="noopener">Waskita Karya (Persero) (WSKT IJ)</a>, <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> and <a href="https://www.smartkarma.com/entities/harum-energy-tbk-pt" target="_blank" data-smartkarma-citation="entities:1604:1" rel="noopener">Harum Energy (HRUM IJ)</a> as higher probability inclusions in the LQ45 Index.</li>
<li>Given the focus is on liquidity, we see <a href="https://www.smartkarma.com/entities/jasa-marga-persero-tbk-pt" target="_blank" data-smartkarma-citation="entities:12747:1" rel="noopener">Jasa Marga (Persero) (JSMR IJ)</a>, <a href="https://www.smartkarma.com/entities/bumi-serpong-damai-pt" target="_blank" data-smartkarma-citation="entities:15498:1" rel="noopener">Bumi Serpong Damai (BSDE IJ)</a> and <a href="https://www.smartkarma.com/entities/akr-corporindo-tbk-pt" target="_blank" data-smartkarma-citation="entities:13338:1" rel="noopener">AKR Corporindo (AKRA IJ)</a> as higher probability deletion candidates.</li>
</ul>


The review period for the LQ45 Index ended on 31 December. The changes should be announced in the last week of January, becoming effective after the close on 31 January.
We see Waskita Karya (Persero) (WSKT IJ), BFI Finance Indonesia (BFIN IJ) and Harum Energy (HRUM IJ) as higher probability inclusions in the LQ45 Index.
Given the focus is on liquidity, we see Jasa Marga (Persero) (JSMR IJ), Bumi Serpong Damai (BSDE IJ) and AKR Corporindo (AKRA IJ) as higher probability deletion candidates.


LQ45 Index Rebalance Preview (Feb 2022): Potential Changes Later This Month

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<p><a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a>released its 3Q2021 results this week which saw its 9M2021 new bookings increase +72.7% YoY or +4.2% QoQ, reflecting a new normal situation versus last year when new booking had virtually ground to a halt. All the same, this performance was impressive given the backdrop of Emergency PPKM measures impacting mobility.</p>
<p>3Q2021 performance was relatively robust given that the country was in the midst of Emergency PPKM during the quarter with a stronger recovery taking place in September. <a href="https://www.smartkarma.com/entities/bf-investment-ltd" target="_blank" data-smartkarma-citation="entities:9276:1" rel="noopener"></a></p>
<p><a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> profitability remained healthy with its interest spread at 11.3%, with the cost of funds steady at 8.5%, making it very competitive versus competition.</p>
<p>The company's NCL ratio declined significantly QoQ but slightly higher than last year, as a result of more repossessions and collateral disposals. </p>
<p><a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> continues to make good progress on restructured loans with 86.8% of restructured loans reverting to normal status as of the end of 9M2021.<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener"></a></p>
</section>
<section class="figure">
<section class="figure">
<p>The company continues to develop its digital capabilities and has been developing its fintech push through Pinjam Modal and it has also launched BFI Connect, which is an open API platform, which can be integrated into other platforms such as e-commerce.</p>
<div class="content-highlight">
<p>The key message from <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> management was that the company is moving back towards a growth trajectory, with new booking improving and receivables seeing higher repayments. We continue to see <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia (BFIN IJ)</a> as the most interesting multi finance company in Indonesia, with a strong risk management culture and with the potential to generate higher ROEs as the market recovers. </p>
</div>
</section>
</section>


BFI Finance Indonesia (BFIN IJ)released its 3Q2021 results this week which saw its 9M2021 new bookings increase +72.7% YoY or +4.2% QoQ, reflecting a new normal situation versus last year when new booking had virtually ground to a halt. All the same, this performance was impressive given the backdrop of Emergency PPKM measures impacting mobility.
3Q2021 performance was relatively robust given that the country was in the midst of Emergency PPKM during the quarter with a stronger recovery taking place in September. 
BFI Finance Indonesia (BFIN IJ) profitability remained healthy with its interest spread at 11.3%, with the cost of funds steady at 8.5%, making it very competitive versus competition.
The company's NCL ratio declined significantly QoQ but slightly higher than last year, as a result of more repossessions and collateral disposals. 
BFI Finance Indonesia (BFIN IJ) continues to make good progress on restructured loans with 86.8% of restructured loans reverting to normal status as of the end of 9M2021.



The company continues to develop its digital capabilities and has been developing its fintech push through Pinjam Modal and it has also launched BFI Connect, which is an open API platform, which can be integrated into other platforms such as e-commerce.

The key message from BFI Finance Indonesia (BFIN IJ) management was that the company is moving back towards a growth trajectory, with new booking improving and receivables seeing higher repayments. We continue to see BFI Finance Indonesia (BFIN IJ) as the most interesting multi finance company in Indonesia, with a strong risk management culture and with the potential to generate higher ROEs as the market recovers. 




BFI Finance Indonesia (BFIN IJ) - Shining Through in a Difficult Period

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance</a>'s 3Q2023 results reflected the lingering impact of May's Malware incident which interrupted collections but this situation has now been remedied and the company can resume rebuilding its book.</li>
<li>4Q2023 will likely see further write-offs but an improvement in credit costs but the company will remain cautious on building its book with a full recovery expected in 2H2024. </li>
<li>
<a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance</a> remains the best-quality multi-finance company in Indonesia, with a low cost of funds and a differentiated target market of used 4W and 2W non-dealer loans. Valuations are attractive. </li>
</ul>



BFI Finance's 3Q2023 results reflected the lingering impact of May's Malware incident which interrupted collections but this situation has now been remedied and the company can resume rebuilding its book.
4Q2023 will likely see further write-offs but an improvement in credit costs but the company will remain cautious on building its book with a full recovery expected in 2H2024. 

BFI Finance remains the best-quality multi-finance company in Indonesia, with a low cost of funds and a differentiated target market of used 4W and 2W non-dealer loans. Valuations are attractive. 


BFI Finance Indonesia (BFIN IJ) - Back on an Even Keel

Indonesia

PT BFI Finance Indonesia Tbk provides financial services such as leasing, consumer financing, and factoring.

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BFI Finance Indonesia (BFIN IJ)