KLCI Stock - MAYBANK / 1155 - 2010 Quarter 4

Market Cap : 7077982768*8.13 = 57,543,999,903.84 (Very Large)
NTA per share : (27877176-4480714)/7077983 = 3.31
P/BV : 8.13/3.31 = 2.4562
Forecast P/E now : (8.13-0.55)/0.5933 = 12.78 (Moderate)
ROE : 13.32% (Moderate)
DY : 0.55/8.13*100 = 6.77% (Moderate)
Fixed Asset Turnover(3 year) : Not applicable
Liquidity Ratio : Not applicable
Receivables Collection Period : Not applicable
My Target Price : 8.9+0.55 = 9.45 (PE 15, EPS 0.5933, DPS 0.55)
My Decision : BUY
My Comment : Revenue and profit still high but slow down, good cash flow, navps increased, better economic in Malaysia, Indonesia & Singapore, strong Ringgit, higher BLR, expect all business segment to be grow
Technical Support Price : 7.7
Risk Rating : LOW
OSK Target Price : 8.5 (14 May 10)

My notes based on 2010 quarter 4 report (number in '000):-

- The Group posted a 451.9% significant increase in profit attributable to equity holders for the financial year ended 30 June 2010. For the fourth quarter ended 30 June 2010, the Group posted a 181.6% significant increase in profit attributable to equity holders

- The Group’s net interest income for the financial year ended 30 June 2010 increased by 14.4%. The increase in net interest income is mainly due to the full year's contribution from PT Bank Internasional Indonesia Tbk (BII), a 97.5% subsidiary acquired on 30 September 2008, and lower interest expense in Malaysian and Singapore banking operations arising from reduction in OPR in early 2009. Income from Islamic Banking operations for the financial year ended 30 June 2010 also increased by 17.2%, this was mainly contributed by the growth of assets in the Islamic business

- Non interest income increased significantly by 38.3% for the financial year ended 30 June 2010. The increase was contributed by significantly higher fee income arising from commission, service charges & fees and other loans related fee income, unrealized gain on revaluation of derivatives, realized gain arising from sale of securities and foreign exchange profit due to strengthening of Ringgit Malaysia against other major currencies

- Overhead expenses increased by 15.3% for the financial year ended 30 June 2010 over the corresponding period, mainly due to the full year's contribution from BII compared to the corresponding period. Personnel cost increased by 14.3%. Establishment costs increased by 6.3% (including amortization of BII's Customer Deposits Intangibles). Administration and general expenses increased by 35.1% due mainly to increase in royalties paid for the expansion of cards businesses, insurance premium and higher professional fees

- Allowance for losses on loans, advances and financing decreased by 30.1% due to improvements in loan assets quality and better recovery

- The Group posted a 11.4% decrease of profit attributable to equity holders for the fourth quarter ended 30 June 2010 compared to the preceding quarter

- The Group’s net interest income and income from Islamic Banking Scheme operations for the fourth quarter ended 30 June 2010 increased by 6.9% against the preceding quarter

- Non-interest income for the quarter decreased 4.4% compared to that of preceding quarter. The decrease is mainly attributable to the unrealized loss on revaluation of derivatives incurred for the current quarter compared to unrealized gain on revaluation of derivatives incurred for the preceding quarter

- Overhead expenses for the quarter increased by 1.9% over that of the preceding quarter mainly due to higher administrative and general expenses and claims incurred.This was however partly offset by lower marketing expenses

- Compared to the preceding quarter, allowance for losses on loans, advances and financing and impairment losses were higher

- Estimate next 4Q eps after 2010 Q4 result announced = 0.5394*1.1 = 0.5933, estimate PE on current price 8.13 = 12.78(DPS 0.55)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1456*4 = 0.5824, estimate highest/lowest PE = 13.68/11.59 (DPS 0.19)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1404*4 = 0.5616, estimate highest/lowest PE = 13.48/11.75 (DPS 0.19)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1246*4 = 0.4984, estimate highest/lowest PE = 14.04/13.1 (DPS 0.08)

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