BCAP IJ - Company Report Update (020322)
Digital Financial Services Revolution
Solid Performance in 9M21
• BCAP's consolidated revenue grew +8.7% YoY to IDR1.92 tn in 9M21 (vs IDR1.77 tn in 9M20).
• This increase was supported by non-digital revenue, which grew +5.9% YoY to IDR1.85 tn. Meanwhile, digital revenue rose significantly by +252.7% YoY to IDR68.9 bn.
• Net profit increased +55.3% YoY to IDR26.15 bn in 9M21 (vs IDR16.84 bn in 9M20).
• MDT's revenue was recorded at IDR1.14 tn in 9M21, non-digital revenue as the main contributor reached IDR1.08 tn.
• Net profit was recorded at IDR54.78 bn in 9M21.
Motion Digital Technology for a Better Digital Ecosystem
• BCAP IJ formed PT Motion Digital Technology (MDT) entity which consolidates banking services (MotionBanking), securities transactions (MotionTrade), e-money & e-wallet (MotionPay), and Flash Mobile for payment gateway.
• The main reason of this consolidation is to create maximum synergy between MotionBanking, MotionTrade, MotionPay and Flash Mobile.
• The integration and synergy will attract more investors, including private equity, hedge funds, start-up investors, and other financial institutions.
• Apps under Motion Digital will be interconnected to each other with a single sign-on, connected eKYC, and even cross wallet for convenient transactions.
• Motion Digital will also maximize synergies with MNC Media and MNC Digital to attract Motion Digital users by collaborating with e-commerce and fintech to quickly increase the number of transactions as well as Motion Digital users.
Strategy in Accelerating Digital Growth
• MotionBanking will collaborate as a platform that provides Open API Banking with Fintech, ecommerce, also travel and ride-hailing services.
• MotionBanking partners with Pos Indonesia as a cash in and out agent, where customers can make a cash deposit or withdrawal transactions at all post offices. Currently, Pos Indonesia has 4,524 post offices.
• MotionBanking also collaborated with lending platforms, such as 1) Kredit Pintar; 2) Atome; and 3) Kopnuspos to manage the risk.
• MNC Bank is also in the process to get approval from PT Kustodian Sentral Efek Indonesia (KSEI) to manage client fund accounts
• MotionTrade will add 3rd party e-KYC, especially in registering new customers, establishing synergies with fintech, and other expansions.
• In FY21, Motion Trade reached 343,054 of total downloads, which rose significantly by +6180% in 5 years. With transaction value increased by +120% YoY to IDR61.2 trillion, and commission value up +108% YoY to IDR71.2 bn.
• The company will focus on maximizing its transaction revenue through the underserved individuals and SMEs, considering that many of them still don't have access to credit.
Huge Market Opportunity Awaits
• Of the 276 million population in Indonesia, 26% are still underbanked, and 51% are unbanked.
• With the continuous growth of the digital economy, projected to reach a CAGR of +20% until FY25F, the company has an excellent opportunity to expand the range of its digital services.
• In the low-mid income population, there are 71% of people do not have access to credit. Therefore, digital loan services have the potential to continue growing along with economic growth.
• MSMEs contribute around ~60% to GDP, but only 26% of the total MSMEs have access to credit. Thus,
providing credit facilities might support the acceleration of micro-businesses and enterprises.
Valuation and Recommendation: NOT RATED
PT MNC Sekuritas is affiliated with PT MNC Kapital Indonesia Tbk. Therefore MNC Sekuritas Institutional Research Team does not recommend anything related to the prospect of the Company - NOT RATED
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