MAYBANK – Fundamental Analysis (29 Aug 2014)

MAYBANK Analysis:-

Excel – http://1drv.ms/1rEhRgF

My View:-

– Fair values:
  – 5Y DCF:
    – 11.33 – 13.21 (MOS: 11% – 24%)
  – Absolute EY%:
      – Trailing:
        – FY13 (EPS: 0.758) – Buy below 9.95, fair value 12.03 (MOS: 16%)
        – R4Q (EPS: 0.745) – Buy below 9.78, fair value 11.82 (MOS: 14.6%)
      – Forward:
        – FY14 (EPS: 0.765) – Buy below 10.05, fair value 12.15 (MOS: 16.9%)
        – FY15 (EPS: 0.818) – Buy below 10.74, fair value 12.99 (MOS: 22.2%)
      – EPS applied to reach the current stock price (10.1): 0.636
  – Both models pointed that MAYBANK is still undervalued.
– Loan growth has improved in 2QFY14 contributed strongly by its international operations’ loan expansion.
– Its Singapore operations have performed well despite challenging conditions with strong growth in net fund based and net fee based in income in 1HFY14.
– Net fund based income for Islamic Banking improved significantly in 1HFY14 (+48.5%yoy) on strong loan expansion.
– Furthermore, the Group’s overhead expenses have been well controlled with a decline of 2.7%yoy in 1HFY14.
– Management lowered its ROE guidance from 15.0% to 14.0%. Management highlighted that it lowered its ROE guidance due to :
  i) The growth NOII in 1HFY14 which was not as fast as expected
  ii) even tough loan growth picked up pace in 2QFY14, the slow growth in 1QFY14 resulted in its loans growth in 1HFY14 to be lower than its target
  iii) higher loan impairment in Indonesia.
– I will accumulate MAYBANK a bit without increasing my average price too much.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1723605

At the time of writing, I owned shares of MAYBANK.

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