Period 2Q12/1H12
Actual vs.Expectations Within
expectations. MBSB reported 1H12 net profit of RM173.1m (46% of our estimate
and 44% that of the consensus).
Dividends Interim gross dividend of 6 sen per
share.
Key Result Highlights
2Q12
revenue of RM235.9m was up +35% YoY and +25% QoQ, driven by higher loans of
RM21.9b (+66% YoY, +25% QoQ) with an estimated 4.2% NIM (vs. FY11’s 4.66% and
1Q12’s 4.6%).
MBSB had an
aggressive PF-I campaign during the period of January-April 2012 with the aim
to capture market share from its peers. The campaign successfully disbursed
RM6.8b of new PF-I loans, which helped MBSB’s personal financing loans segment
grew strongly by +78% YTD, even while its mortgages and corporate loans
segments remained flat.
However,
the price cutting strategy and promotion on the transfer packages resulted in
lower fee-based incomes, which fell 13.8% QoQ to RM24.1m.
Nonetheless,
the 2Q12 PAT of RM93.7m (+17.9% QoQ) was strong. We expect the earnings momentum
to remain strong heading into 2H12.
Outlook
We believe
the group’s total loan disbursement target of RM8.0b PF-I loan in 2012 is
highly achievable, as 1H’s RM6.8b loan disbursement already made up 85% of its
full year target. Hence, its balance sheet expansion story remains intact.
Management
is guiding for NIM to remain above 4%.
However,
the management did not provide any guidance on the fee-based income. As such,
lower fee-incomes as a result from aggressive promotion could be a risk to our
earnings estimates.
Change to Forecasts No
change in our earnings estimates.
Rating Maintain OUTPERFORM
The stock's
valuation still looks undemanding at 6.0x to its FY13 EPS of 38.1 sen against
its banking peers of 11-13.0x. Its ROE of 28.1% remains one of the highest for
financial stocks.
Valuation Maintaining
our target price at RM2.70 based on a targeted P/BV of 1.6x over its FY13 BV of
RM1.70.
At current
level, the stock offers a potential capital upside of 17%. Coupled with an
additional dividend yield of 2.5%, this will bring the potential total return
to approximately 20% over the next 12 months.
Risks Potential
tighter regulation by BNM.
Source: Kenanga
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