Tuesday, 21 September 2010

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Bank Negara Indonesia (BBNI) BUY(Maintain)

Price : Rp3,775 Target Price: Rp4,000

Impact from Right issue

Facing Rights issue. BBNI rights issue can be ascertained and currently, it is JCI Index :
being processed in Parliament (Dewan Perwakilan Rakyat). We see no reason from 3,370
Parliament to not approve the rights issue, as BBNI is less likely to continue Share issued
growing due to capital condition. Although the date has not been set, management estimate ‘11(bn)
would like the rights issue to be implemented at the end of 2010. Recently, after 18.649
the green shoe issuance, government stake in BBNI decreased to 73.26% from Market Cap. (bn)
76.36%. If the government ownership is reduced to 40%, BBNI will release 3.376 57,659
billion (ratio 9:2) shares so the outstanding shares will be 18.6 billion shares (18%
12 Mth High/Low
maximum dilution). Management seeks Rp7-10 trillion of funding from the rights
issue, or Rp2,070 - 2,960 per share. Rp4,000/1,730
Target fund of Rp10 trillion seems reasonable. We change our projections by Avg Daily Vol (mn)
COMPANY UPDATE

incorporating the additional funds through the rights issue. We see the tar get fund
21.9
of Rp10 trillion as reasonable because the rights issue is offered at Rp 2,960/share
or 21.5% discount from yesterday’s closing price. With the assumption of Rp10 Free Float (%)
trillion rights issue to be accomplished early next year, we estimate BBNI CAR will 26.7
be 15.4% in FY11 with 17% loan growth. With 40% free float, the tax paid by BBNI Nominal Value
will fall by 5% or about Rp220 - Rp304 billion in FY11-12E. Rp375
Divestment of BNI securities will not have a significant impact. BBNI plans Book value/share ‘11
to divest BNI securities by 25-30%. Currently, BBNI owned 99.85% of BNI Rp1,752
securities. However, this transaction will not have a significant impact on the
financial statements due to less than 1% contribution of BNI securities to BBNI.
Maintain Buy . Through rights issue, we estimate book value will increase to
Analyst:
Rp1,752/share and ROE will decline to 17.2% in FY11. In our valuation, we also
change our time zero (base year) to 2011 from 2010. We raise our price target to Joseph Pangaribuan
Rp4,000 from previously Rp3,450. Currently, BBNI is trading at 2.2x PBV'11 lower (021) 2854-8107
Joseph.pangaribuan@e-
than the BBRI, BBCA, and BMRI. We think BBNI is feasible to trade at discount than samuel.com
BBRI, BBCA, and BMRI because of its lower ROE than peers. Maintain Buy
Forecast and Valuation (at closing price Rp3,775)
Y/E Dec (Rpbn) 09A 10F 11F 12F
Net Interest Income 11,133 13,275 15,999 18,116
Operating Income 15,428 19,200 22,714 25,582
Pre Prov Op.Profit 7,437 9,600 11,130 12,535
Net Profit 2,484 4,029 5,604 6,763
EPS (Rp) 187 264 301 363
P/E (x) 20.2 14.3 12.6 10.4
BVPS (Rp) 1,441 1,360 1,752 1,856
P/BV (x) 2.6 2.8 2.2 2.0
NIM (%) 6.0 5.8 6.0 6.1
ROE (%) 16.3 19.4 17.2 19.5

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no circumstances is it
to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for all investors. Moreover,
although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed.
All rights reserved by PT Samuel Sekuritas Indonesia.
 Tuesday, 21 September 2010
Joseph Pangaribuan
(021) 2854-8107
joseph.pangaribuan@e-samuel.com

Figure 1. BBNI – impact post rights issue

Pre-rights issue Post-rights issue Chg %
2011F 2012F 2011F 2012F 2011F 2012F
Net interest income 14,871 16,503 15,999 18,116 7.58 9.78
Fee Income 6,681 7,402 6,715 7,466 0.51 0.86
Operating income 21,553 23,905 22,714 25,582 5.39 7.02
Net Income 4,870 5,693 5,604 6,763 15.08 18.79

Equity 22,163 23,714 32,677 34,609 47.4 45.9

Shares outstanding (Mn) 15,274 15,274 18,649 18,649 22.1 22.1
EPS 319 373 301 363 (5.7) (2.7)
Free float (%) 26.7 26.7 40.0 40.0 49.6 49.6
P/E (x) 11.8 10.1 12.6 10.4 6.1 2.8
PBV (x) 2.6 2.4 2.2 2.0 (17.2) (16.3)
CAR (%) 13.2 13.7 15.4 15.2 16.1 11.0
Tier I (%) 9.2 9.5 11.5 11.4 24.8 19.4
ROE% 21.9 24.0 17.2 19.5 (21.7) (18.6)
Source: SSI

Figure 2. BBNI – Valuation BBNI vs peers

Company Code Price Target Mkt Cap P/E (x) PBV (x)
20-Sep-10 Price (Bn) 2010 2011 2010 2011
Bank Mandiri BMRI 6,600 6,700 138,475 16.9 14.4 3.3 3.0
Bank Central Asia BBCA 6,450 6,400 159,025 19.8 17.1 4.9 4.2
Bank Danamon BDMN 5,700 6,000 47,943 17.2 13.7 2.7 2.4
Bank Niaga BNGA 1,190 600 5,150 20.9 16.8 2.6 2.3
Panin Bank PNBN 1,110 1,200 26,727 21.1 15.4 2.3 2.0
Bank Rakyat Indonesia BBRI 10,200 9,600 125,817 13.6 10.6 3.7 2.8
Bank Negara Indonesia BBNI 3,775 4,000 57,656 15.5 12.6 2.8 2.2
Bank Tabungan Negara BBTN 1,870 1,900 16,288 15.6 11.7 2.7 2.5
Average 17.6 14.0 3.1 2.7
Source: SSI & Bloomberg

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for
2
all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and
reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.
 Tuesday, 21 September 2010
Joseph Pangaribuan
(021) 2854-8107
joseph.pangaribuan@e-samuel.com

Bank Negara Indonesia

Banking

Company Background
Balance Sheet
09A 10F 11F 12F
Assets Bank Negara Indonesia (BBNI) is one of the
Cash 4,903 5,405 6,243 7,180 largest bank in Indonesia based on loan.
RR 8,531 14,742 17,027 19,581 Total loans (gross) in FY09 reached Rp120
Due from Other Banks 36,481 30,712 35,472 40,793 trillion, As of December 31, 2009, the Bank
Marketable Securities 19,198 19,656 22,702 22,844 was supported by 1,014 domestic branches
Gross Loans 120,843 136,439 156,749 180,084 and sub branches, 26 sharia branches and
Loan Provisions (6,920) (7,466) (7,936) (8,027) 31 sharia sub branches.
Investments-net 51 197 128 147
Fixed Assets 3,708 3,560 3,399 3,288
Other Assets 9,663 9,828 9,932 11,422 Shareholding Structure
Total Assets 227,497 245,697 283,780 326,347 RI Government : 73.3%
Public : 26.7%
LIABILITIES & EQUITY
Deposits from customers 188,469 205,431 221,866 239,615
Deposits from other banks 3,819 4,044 5,906 8,087 Price Chart
Borrowings 5,570 7,033 10,271 14,064
Subordinated Loan - - 257 352
Total Liablities 208,322 224,888 251,058 291,692
Total Equity 19,144 20,769 32,677 34,609

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for
3
all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and
reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.
 Tuesday, 21 September 2010
Joseph Pangaribuan
(021) 2854-8107
joseph.pangaribuan@e-samuel.com

Recommendation Chart– United Tractors (UNTR)

Closing
Date Recommendation Price Target
21-Jun-10 BUY 2,425 3,000
29-Jul-10 BUY 2,425 3,450

Recommendation History – Bank Negara Indoensia (BBNI)

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for
4
all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and
reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.