Public Bank (HOLD)
Continued To Deliver
§ 4QFY11 results were in line with HLIB and consensus.
§ 2nd interim single-tier dividend of 28 sen. FY11 total of 48 sen (48.3% payout), in line with HLIB's projection and company's unchanged dividend policy of circa 50%.
§ FY11 loans growth of 13.5% yoy slightly behind target of 14-15% and our assumption of 14% mainly due to overseas operations (only 7%) while domestic growth was 14.1%.
§ Targeting 12-13% FY12 loans and deposits growth (vs. HLIB's 11%) to offset anticipated 10-15bps erosion in NIM.
§ Asset quality continued to improve and remained stable. Guidance is for both asset quality and credit charge to stay stable with boost from full adoption of FRS139.
§ No issue meeting Basel III requirements and will strive to maintain a lean capital structure. BNM's concept paper on counter-cyclical capital buffer is expected by 2014.
§ FY12-13 forecasts raised by 1.4-1.9% following final results while we introduced FY14 forecast.
§ Thus, target price raised to RM13.90 (Gordon Growth with ROE of 24.3% and WACC of 9.6%) vs. RM13.45.
MAHB (BUY)
§ MAHB has proposed raise RM600m for its revised RM3.6-3.9bn capex (previously RM2bn) of KLIA2, through private placement exercise involving new share issuance of up to 10% of issued share capital or 110m shares.
§ The exercise is expected to be completed within 1H12.
§ The proposed private placement was within our expectation.
§ We have estimated earnings dilution impact of 4.6% in 2012 (half year impact) and 9.1% in 2013.
§ We are positive on the long term prospect of KLIA2 development backed by the continuous expansion of low cost airlines and strong demand for regional budget travelling.
§ Maintain Buy with unchanged target price of RM6.80.
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