Listed Company Analysis – AGRO

Hello August! Welcome to listed company analysis. Today, we are going to discuss a company named Bank Rakyat Indonesia Agroniaga Tbk. Banking is important to keep the nation’s economy spinning. That is why today, and the next edition will still talk about banking. How many did you know when and how is banking first invented in this world? Any of you curious about this? Here we go, based on my last reading, first prototype of banking is happened in the merchant world when they start giving loan with grains. It’s happening in Assyria, India, Sumeria at 2000 BC. But it’s just lending not Banking right? First renowned bank in this world is start in Italy, by The Bardi and Peruzzi Families who dominated banking in 14th century. They established many branches across Europe. But there’s a bank of that time that is still existing today, it’s name Banca Monte dei Paschi di Siena which had been continuously operating since 1472. Awesome right? In Indonesia there is one named Bank Rakyat Indonesia since 1895, and today we going to learn more from the oldest bank of Indonesia’s subsidiary.

PT Bank Rakyat Agroniaga Tbk is a holding company. The primary business of the company is to deliver a diversified approach to investing in emerging markets. AGRO help focus on agribusiness but not only agribusiness. 2019 shown 56% of its loans given to agribusiness and 44% to non-agribusiness. Also AGRO has an apps for peer to peer lending to their customers named PINANG (Pinjam Tenang) or in english lend then calm, showing the confidence of the product with low interest rate so the borrower won’t be mad to fulfill the debt. Current ticket size at IDR 4 Mio with IDR 20 Mio as the top limit.

AGRO listed date on 08 August 2003 when first joining IHSG. AGRO shares are owned by three shareholders, majority shareholder with 87.10% hold by PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), then 6.32% Pension Fund Plantation (Dana Pensiun Perkebunan) and the rest sold to public 6.58% of total shares.

Key Financial Statistics

Semester-1 AGRO.

Financial Statements Semester 1 AGRO
Financial Ratio Semester 1 – AGRO

Highlights of 2020

  • AGRO partnering with Dewan Pengurus KORPRI Nasional (DPKN) related to Pinang (Pinjam Tenang) peer to peer lending by AGRO so any member of KORPRI could enlarge their business by lending money to AGRO. Total member of KORPRI in total about 4 Million employees.
  • AGRO partnering with Investree (a startup lending based on Indonesia) with providing funds IDR 100 Bio to help growing UMKM to enlarge the market capitalization and digital economics ecosystem in Indonesia.
  • As of December 2019, Pinang reach IDR 30 Bio in total lending amount.
  • First semester of 2020 net profit AGRO reach IDR 20.1 Bio, with current target reaching IDR 102 Bio or twice the 2019 net profit. It’s still long way to go, is it possible to get IDR 81.9 Bio in the semester 2?
  • In 2020 AGRO going to buyback its shares with 20% as the maximum portion, AGRO already prepared IDR 2.5 Bio to buyback in around 3 July 2020 until 2 Oct 20.

Target Price

Hopemity – Buy Rating – 285

AGRO is only good for short term trading, not long term. Due to the financial statistics, surf the buyback period. Chance to profit taking, also look the BRIS because the time usually similar of both increase drastically. Pros on AGRO is it have good back up and huge holding company, and Indonesia agribusiness is enormous. AGRO market is still growing and promising.

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