FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Metal Mining Possible Royalty Hike Could Pressure FY25F Earnings (NEUTRAL)

• Though implementation is still uncertain, a royalty hike to 15% could strain FY25E earnings by -2% to -9% based on our estimation.
• The Philippine’s nickel ore export ban is tougher than it seems as market condition are no longer favorable and has a lower average ore grade.
• We reiterate our Neutral rating on the sector, with TINS, NCKL, and ANTM as our top picks due to their stronger earnings visibility.

To see the full version of this report, please click here

 

To see the full version of this snapshoot, please click here

 

RESEARCH COMMENTARY

BDMN (Not Rated) – 4Q24 Results

FY24 Insights:

• Net Profit Decline Due to Higher Provision Expenses: BDMN reported a 9% yoy net profit decline to Rp3.2tr, driven by a 19% yoy rise in provision expenses.
• CIR Increase Due to IT Investments: CIR rose to 55.9% in FY24 from 54.7% in FY23, mainly due to a 6% yoy increase in opex. Mgmt attributed the rise in opex to investments in IT-related areas and salary increases.
• Lower Consolidated NIM: NIM fell to 7.3% in FY24 from 8.2% in FY23. ADMF’s NIM declined to 12.7% in FY24 from 18.7% in FY23. As ADMF accounts for 30% of BDMN’s loan book, this impacted BDMN’s consolidated NIM.
• Robust Customer Deposit and Loan Growth: Customer deposits expanded by 9% yoy (+3% qoq), outpacing loan growth of 8% yoy (+2% qoq), resulting in an LDR of 123.6% (-167bps qoq, -94bps yoy).
• Loan Growth by Segment: The loan growth was driven by an 11% wholesale business growth (EB & FI: +10%, SME: +12%) and A 5% consumer business growth (consumer: +19% yoy, Adira: flat). As of FY24, around 20% of BDMN’s loans stemmed from synergy with MUFG.
• ROE at 7.1% in FY24: ROE declined to 7.1% in FY24 from 8.3% in FY23.

 

4Q24 Insights:

• Net Profit Decline: BDMN’s net profit declined to Rp848bn (-3% qoq, -10% yoy). The qoq decline was mainly due to a 7% qoq rise in provision expenses, while the yoy drop was largely due to an 18% yoy decrease in other operating income.
• CIR Improvement (qoq): CIR stood at 56.3% in 4Q24, slightly improving qoq from 57.7% in 3Q24, but still higher than the 53.3% reported in 4Q23.
• NIM Amid CASA Ratio Decline: NIM remained at 7.1% (flat qoq, -90bps yoy) in 4Q24. Low-cost funding stayed constrained as the CASA ratio declined to 41.7% in 4Q24 from 43.8% in 3Q24 and 52.3% in 4Q23. Management attributed this to higher interest rates pushing customers toward time deposits and wealth management products.
• Improved Asset Quality: NPL improved to 1.9% (-10bps qoq, -30bps yoy), indicating better asset quality. NPL coverage also increased, reaching 287.2% in 4Q24 from 265.9% in 4Q23 and 272.3% in 3Q23. LaR improved to 10.6% in 4Q24 from 11.6% in 4Q23 and 11.5% in 3Q24.

 

FY25 Guidance:

• Loan growth is expected at 9-11% yoy, driven by enterprise banking, SME, consumer banking, and Adira Finance.
• Adira Finance targets 8-10% new financing growth in 2025, with multi-purpose loans expected to grow at a double-digit rate.

 

Summary:

• Overall Performance: BDMN’s performance was largely affected by increased provisions and higher opex due to its commitment to a strategic business plan for process improvement. However, a bright spot is its improved NPL and ample NPL coverage, alongside robust loan growth. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

MARKET NEWS

SECTOR

Commodity Price Daily Update Feb 18, 2025

Cigarette: Surge in Illegal Cigarette Circulation in 2024

Illegal cigarettes in Indonesia were dominated by untaxed products (95.44%) in 2024, with counterfeit, misallocated, reused, and mispersonalized cigarettes making up the rest. The estimated state revenue loss reached Rp97.81tr. According to Indodata Research Center, illegal cigarette consumption rose by 46.95% from the previous year, continuing a significant upward trend since 2021. (Kontan)

 

CORPORATE

AKRA Commissioner Increases Stake

AKRA Commissioner purchased 14.4mn shares on 12-14 Feb25, for Rp15.91bn. His ownership rose from 115.26mn shares (0.574%) to 129.67mn (0.646%). AKRA's Corporate Secretary stated the purchases were for investment. (Emiten News)

 

DCII Explores Stock Split Opportunity

DCII is currently exploring the possibility of a stock split amid its high share price. As known, DCII’s stock price has reached Rp46,700 per share as of yesterday. Notably, there was only one recorded transaction in DCII shares. (Kontan)

 

Freeport Ready to Export 1.3mn Tons of Copper Concentrate

PT Freeport Indonesia (PTFI) is optimistic about securing the export permit and is prepared to ship 1.3mn tons of copper concentrate by Dec25. Freeport's management estimates that the export volume of 1.3mn tons will be worth approximately US$5bn, with the government receiving around US$4bn. Freeport also stated that its current production capacity is limited to 40% due to the full storage capacity at its warehouse. (Kontan) 

 

MDIY Executes MESOP Phase I

MDIY issued 127.1mn shares at Rp1,650 per share under its first MESOP phase, expiring on 6th Aug29. Approved alongside its IPO, the program allocates 514.1mn shares (2.041% of post-IPO capital) in two phases, with the second phase pending board approval. (Company)

 

Mitsubishi Signals Introduction of Hybrid Model in Indonesia

Mitsubishi has hinted at introducing a hybrid model in Indonesia, following the launch of the Xpander Hybrid in Thailand. PT MMKSI President Director confirmed plans for a new model launch, which could include a hybrid version. He emphasized that Mitsubishi is studying the Indonesian market before making a final decision. He also mentioned that if the hybrid model is launched in Indonesia, it will likely be produced locally. (Oto Detik)