MAYBANK – Fundamental Analysis (1 Sep 2015)

MAYBANK Analysis:-

Excel – http://1drv.ms/1PHPuoY

My View:-

  • Valuation:
    • Historical P/B:
      • Trailing:
        • FY14 (BPS: 5.849) – 9.54 (Uncertainty Risk: HIGH)
        • Current (BPS: 5.978) – 9.76 (Uncertainty Risk: HIGH)
      • Forward:
        • FY15 (BPS: 6.05 ± 5%) – From 9.38 to 10.37 (Uncertainty Risk: MEDIUM to HIGH)
        • FY16 (BPS: 6.293 ± 5%) – From 9.76 to 10.78 (Uncertainty Risk: MEDIUM to HIGH)
      • BPS applied to reach the current stock price (8.76): 5.368
    • Historical P/B:
      • Trailing:
        • FY14 (BPS: 5.849) – 8.76 (Uncertainty Risk: HIGH)
        • Current (BPS: 5.978) – 8.96 (Uncertainty Risk: HIGH)
      • Forward:
        • FY15 (BPS: 6.05 ± 5%) – From 8.61 to 9.52 (Uncertainty Risk: HIGH)
        • FY16 (BPS: 6.293 ± 5%) – From 8.96 to 9.90 (Uncertainty Risk: MEDIUM to HIGH)
    • Dividend Yield (based on FY14 payout): 6.5%

      image

  • I think fair value of MAYBANK is from 9.3 to 9.7. Uncertainty risk is HIGH.
  • Compare to my previous valuation, the fair values are reduced due to declining of ROE and stagnant dividend payout growth.
  • For FY15, management has guided an ROE of 13-14%, Group loan growth of 9-10% (Malaysia: 8-9%, Singapore: 8-9% and Indonesia: 13-15%), Group deposit growth of 9-10%, CI ratio of 47-48%, NIM contraction of 8-10bp and credit cost of not more than 0.30%.
    • I think MAYBANK is on track to achieve its FY15 KPI targets.
  • MAYBANK forecasted that Malaysian loan growth of 6% to 7% in 2015.
  • Due to its strong dividend yield, healthy liquidity and strong capital position, I will continue to hold MAYBANK, and accumulate MAYBANK without increasing my average price too much.

Latest Financial – FY2015 Q2 Financial Report (27 Aug 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4847333

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

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