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Thursday, June 2, 2011

KLCI Stock - CIMB / 1023 - 2011 Quarter 1

Company Info
Market Capital (Capital Size)62,063,668,294 (Very Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(8.35-0.26)/0.4827 = 16.76 (High)
Target Price7.72+0.26 = 7.98 (PE 16.0, EPS 0.4827, DPS 0.26)
DecisionNot interested unless revenue and profit from core business increase more
Revenue decreased 13.2% and also lower than preceding year corresponding quarter 1.3%, eps increased 4.2% and also higher than preceding year corresponding quarter 4.5%, no cash generated from operating or investing and is over spent and still no cash generate from financing activities, lower revenue is due to lower other income, interest and islamic banking income still high, unusual low allowance of losses on loans, advance & financing, if normal then profit have to deduct another RM160 million
First Support Price8.2
Second Support Price7.8

Research House
Affin Target Price10 (2011-01-21)
RHB Target Price9.8 (2011-02-21)
TA Target Price10.8 (2011-02-28)
Maybank Target Price9.6 (2011-03-07)
HwangDBS Target Price10.1 (2011-03-31)
Golman Sachs Target Price10 (2011-04-18)
MIDF Target Price9.6 (2011-04-27)
AMMB Target Price9.7 (2011-05-26)
ECM Target Price7.88 (2011-05-26)
HLG Target Price9.58 (2011-05-26)
OSK Target Price9.15 (2011-05-26)

Accounting Ratio
Return on Equity14.94%
Dividend Yield3.12%
Profit Margin44.81%
Tax Rate24.28%
Asset Turnover0.0435
Net Asset Value Per Share3.19
Net Tangible Asset per share1.89
Price/Net Tangible Asset Per Share4.38
Cash Per Share7.49
Liquidity Current Ratio1.1176
Liquidity Quick Ratio0.993
Liquidity Cash Ratio0.239
Gearing Debt to Equity Ratio10.4396
Gearing Debt to Asset Ratio0.9103
Working capital per thousand Ringgit sale231.1%
Days to sell the inventory1585
Days to collect the receivables5057
Days to pay the payables12354

My notes based on 2011 quarter 1 report (number in '000):-
- The Group’s Malaysian Consumer Banking division PBT jumped 145.0% Q-o-Q due to the combination of stronger operations and better recoveries in 1Q11 and the higher provisions and overhead expenses in 4Q10. CIB was 36.8% lower in view of the strong deal flow in 4Q10 but Treasury and Investments was 15.5% higher. CIMB Niaga’s PBT contribution declined 14.7% Q-o-Q to RM336 million. GAM and Insurance PBT was 16.0% lower at RM21 million. CIMB Thai’s PBT contribution (after GAAP adjustments) was a profit of RM37 million compared to a RM14 million loss in 4Q10

- CIMB Niaga reported a 1Q11 net profit of IDR728 billion, a 38.9% Y-o-Y growth with a 1Q11 net ROE of 19.3%. The stronger performance was attributed to the strong loans and deposits growth and lower provisions. On a sequential basis, the net profit was 3.4% lower primarily due to the lower Net Interest Margin (“NIM”) and higher overhead expenses

- CIMB Niaga’s gross loans grew 31.4% Y-o-Y in 1Q11 driven by strong performances from all major retail and corporate segments. The Gross NPL of 2.9% as at end-March 2011 was an improvement from the 3.1% at the previous corresponding period. CIMB Niaga’s loan loss coverage (based on BI definition) stood at 107.4% as at end-1Q11 compared to 116.0% as at end-1Q10

- CIMB Thai announced a 1Q11 net profit of THB282 million, a 19.0% decline from the THB348 million profit in 1Q10. Excluding the THB290 million one-off gain arising from the sale of the Sathorn building in 1Q10, CIMB Thai’s 1Q11 net profit would have grown 386.2% Y-o-Y. Additional provisions lifted its loan loss coverage ratio from 91.4% at end-December 2010 to 98.4% currently. For the 3-month period, CIMB Thai chalked revenue of THB1.590 billion, a 4.8% Y-o-Y decline

- CIMB Islamic’s Y-o-Y PBT jumped 81.6% to RM146 million as Shariah-compliant banking products continue to gain ground. CIMB Islamic’s gross financing assets grew 33.3% Y-o-Y, accounting for 13.9% of total Group loans. Total deposits grew by 27.3% Y-o-Y to RM22.4 billion

- Estimate next 4Q eps after 2011 Q1 result announced = 0.1097*4*1.1 = 0.4827(deduct RM160 million losses on loans, advance & financing), estimate PE on current price 8.35 = 16.76(DPS 0.18)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.49*1.05 = 0.5145, estimate highest/lowest PE = 15.86/14.69 (DPS 0.26)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1267*4*0.97 = 0.4916, estimate highest/lowest PE = 18.29/15.99 (DPS 0.18)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.125*4*1.1 = 0.55, estimate highest/lowest PE = 15.42/13.78 (DPS 0.14)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.2366*4*1.1 = 1.041(10% increase quarter-by-quarter), after bonus estimate eps = 1.041/2 = 0.5205, estimate highest/lowest PE = 15.19/12.46 (DPS 0.185/2 = 0.0925)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.2268*4*1.1 = 0.9979, estimate highest/lowest PE = 14.67/12.5 (DPS 0.185)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.2058*4*1.1 = 0.9055, estimate highest/lowest PE = 14.72/13.04 (DPS 0.25)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1879*4*1.1 = 0.8268, estimate highest/lowest PE = 15.59/11.73 (DPS 0.25)

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