BJBR Fr DBS VICKERS:::Fair value at Rp1,200

BJBR Fr DBS VICKERS:::Fair value at Rp1,200; room for improvement as NIM accelerates and micro lending takes off

Moving on from the past. While it has recorded NIM compression and weak asset quality in the recent past, we believe there is room for improvement going forward as it gears up its micro lending business, both organically and inorganically, supported by its captive markets. BJBR is currently trading at 1.7x FY12F P/BV and 8x FY12F PE. Our fair value of Rp1,200 is based on the Gordon Growth Model with assumptions of 21% targeted ROE, 8.4% long term growth and 16.1% cost of equity.

(source : Listri Adistri)