Period 4Q12/12M12
Actual vs. Expectations
The FY12 net profit of RM446.7m was higher than
expected, exceeding ours and the consensus estimates by 18% and 19% respectively.
Dividends MBSB
has proposed a final dividend of 9% less 25% taxation (net DPS: 6.75 sen) and a
special dividend of 18% less 25% taxation (net DPS: 13.5 sen), bringing the
total payout for FY12 to 24.75 sen (67% of PAT).
Key Results Highlights
YoY, the 4Q12 net profit grew more than double
to RM184.0m due to a higher contribution from its Islamic banking operations (mainly government
servant loans) and lower allowances made on impairment losses on loans,
advances and financing. This helped FY12 net profit to rise to RM447.0m, up
37%. Meanwhile, loans rose 60% to RM24.0b.
QoQ, the 4Q12 net
profit increased two-fold to RM184m underpinned by the higher income from Islamic
banking operations, a higher other operating income as well as from lower allowances
made for impairment losses.
Outlook MBSB’s
balance sheet expansion story remains intact, in our view.
The group, however,
needs a new capital management plan to address its relatively low core capital
ratio of 6.3% as at end-December 2012.
We believe the plan
could include securitisation of loans, issuance of debts and also possible capital
raising exercises.
Change to Forecasts
We are keeping our forecasts for now pending management
guidance on FY13 KPI and its plans for any capital raisings, which could be revealed
in the analysts briefing today.
Rating Maintain OUTPERFORM
Valuation The
stock's valuation still looks undemanding at 6.0x PER on its FY13 EPS of 38.1
sen against its banking peers of 11.0-13.0x.
Besides, its ROE of
28.1% remains one of the highest for financial stocks.
We are maintaining
our target price of RM2.70, which is pegged on 1.6x the FY13 BV of RM1.70.
Risks Potential tighter regulations by the central
bank
Source: Kenanga
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