In today’s briefing:
- Indonesian Banks Screener; Bank Negara (BBNI IJ), the Value and Growth Pick
- ITMG IJ: Steady Coal Prices, Mine Life Upgrade, 43% of the Mkt Cap in Cash and 11% Dividend Yield
Indonesian Banks Screener; Bank Negara (BBNI IJ), the Value and Growth Pick
- Negara value attributes, its growth potential captured by its low PEG ratio and its improving efficiency ratio all stand out; pre- and post-provision returns edged higher, with high NPL coverage
- We are also positive on Mandiri for its quality attributes, its premium returns, and its strong credit quality metrics; Mandiri has the second-best efficiency ratio after mega-cap Bank Central Asia
- Bank Mega has seen credit quality stabilise in 2Q24, but its returns are under pressure, with the efficiency ratio worsening steadily; cost of risk is likely to increase going forward
ITMG IJ: Steady Coal Prices, Mine Life Upgrade, 43% of the Mkt Cap in Cash and 11% Dividend Yield
- Indo Tambangraya Megah (ITMG IJ) recently announced an underwhelming 1228 Rph/share dividend for H1 FY24 (implying a 9% annualized yield).
- Core profits for H1 2024 were 157 mn USD ( excluding 21 mn USD forex and a six mn USD write-off). We are confident of sequential improvement in earnings.
- The company has deep value: 43% of its market cap is in cash, its PE is 5.7x, and its yield, based on a 65% payout ratio, is 11%.
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