– Fair values/Market Timing:
– 5Y DCF: 17.45 – 20.00 (MOS: -9% – 5%)
– EY%: Buy below 17.45, sell above 22.18 (MOS: 13.96%)
– Absolute PE: 21.90 – 24.11 (MOS: 12.89% – 20.87%)
– MOS to be used is 23.38%.
– By looking at the fair values, I think PBBANK is now fully valued (or a bit overvalued). Even if the models proposed fair value above 20.00, but the MOS is not higher than 23%.
– PBBANK has been climbing up since Jul 2012 with couple of small corrections. In my opinion, PBBANK may starts to range somewhere below 20.00.
– In FY14-FY15, intense competition amongst financial institutions for market share as well as the need for higher capital conservation due to the requirements of Basel III capital framework, will continue to put pressure on pricing of products and return on equity. PBBANK growth will be slowing down, and this is proven from the declining ROE in the past 5 years.
– I will continue to hold and monitor PBBANK, but will not accumulate PBBANK at this moment. After holding PBBANK for almost 15 years, the dividend gains covered almost 95% of my cost. I will just let it float with so called "cost free".
Latest Financial – Annual Report 2013 (6 Mar 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1559257
At the time of writing, I owned shares of PBBANK.