dividend yield

 
 

RHB maintains ‘buy’ call on Matrix with target price of RM2.35

KUALA LUMPUR, March 18 — RHB Research Institute Sdn Bhd has maintained its “buy” call on Matrix Concepts Bhd with a higher target price (TP) of RM2.35 following a meeting with the company’s management on its joint venture project in…


Maybank FY18 earnings climb to record RM8.11 billion

KUALA LUMPUR: Malayan Banking Bhd (Maybank) registered its highest ever net profit of RM8.11 billion for the financial year ended Dec 31, 2018 (FY18) from RM7.52 billion a year ago, mainly underpinned by higher loan growth, lower overheads as well as lower provisioning.

Its FY18 revenue increased 3.8% to RM47.32 billion from RM45.58 billion previously.

Net profit for the fourth quarter, meanwhile, grew 9.1% to RM2.33 billion from RM2.13 billion in the same quarter a year ago, with revenue expanding 3.8% to RM12.23 billion from RM11.79 billion.

The bank has proposed to declare a final dividend of 32 sen per share for the quarter under review.

Together with the 25 sen interim dividend declared earlier, the full-year dividend payout of 57 sen per share amounts to RM6.3 billion or 77.3% of net profit.

The total dividend payout translates into a higher dividend yield of 6% versus 5.6% in 2017.

In 2018, Maybank achieved record net operating income of RM23.63 billion, up 1.7%, on the back of a 3.1% increase in fund-based income as a result of higher contributions from all business sectors and key home markets.

Group gross loans expanded at a faster pace of 4.8% in FY18, compared with 1.7% previously. The Malaysian operations saw loans expanding 4.8%, Singapore 4.5%, Indonesia 7.0% and 10.9% for other international markets.

Maybank highlighted that its net impairment losses for the year coming in 20.5% lower than the previous year, lifting operating profit by 9.3% to RM10.8 billion in 2018.

For the fourth quarter alone, it saw net impairment losses coming in 58.1% lower than in the preceding quarter.

The bank continued to maintain a healthy liquidity position with its liquidity coverage ratio of 132.4% and loan-to-deposit ratio of 92.7%.

Total capital ratio was 18.51% while its fully loaded common equity tier 1 ratio stood at 14.51%, both well above the regulatory requirements of 8.0% and 4.5% respectively.

Maybank group president and CEO Datuk Abdul Farid Alias anticipates external headwinds to continue to create uncertainties in the market, and expects the bank’s loan growth to grow in line with the market expansion of 5.1% this year.

Nevertheless, he said the competition for deposits could place pressure on the bank’s net interest margins (NIMs) this year.

“We compressed about three basis points (bps) in 2018, so we expect (NIM compression) around three to five bps (in 2019),” he said at a press conference today.

The bank’s NIM was marginally lower at 2.33% in FY18, from 2.36% in FY17.

Moving forward, Farid said, the bank remains cautious over the global operating environment given continued geopolitical concerns as well as volatility in commodity prices, although it expects greater stability in the domestic market arising from measures being put in place to ensure sustainable growth.

Asked whether the bank will be able to maintain last year’s revenue growth, Farid said it will depend on the business sentiment, noting that within the domestic market, the consumer market is still robust despite the external headwinds.

He said: “2018 was a very difficult year for the market. Last year, the challenge for us is more on the non-retail site, apart from SMEs. We hope that the business sentiment will turnaround this year.

“But I believe for that to happen, we need to understand what is the long-term economic policy is going to be going forward. So I’m quite hopeful with the setting up of the new Economic Action Council,” he added.


Maybank achieves record earnings of RM8.11 billion for 2018, declares 32 sen final dividend

PETALING JAYA: Malayan Banking Bhd’s (Maybank) registered highest ever net profit of RM8.11 billion for the financial year ended December 31, 2018 (FY18) from RM7.52 billion a year ago, mainly underpinned by higher loans growth, lower overhead costs as well as lower provisioning.

Its FY18 revenue also rose 3.8% to RM47.32 billion against RM45.58 billion previously.

Net profit for the fourth quarter, meanwhile, grew 9.1% to RM2.33 billion from RM2.13 billion in the same quarter a year ago, with revenue expanding 3.8% to RM12.23 billion from RM11.79 billion.

The bank has proposed to declare a final dividend of 32 sen per share for the quarter under review.

Together with the 25 sen interim dividend declared earlier, the full-year dividend payout of 57 sen per share amounts to RM6.3 billion or 77.3% of net profit.

The total dividend payout also translates into a higher dividend yield of 6% versus 5.6% in 2017.

In 2018, Maybank’s achieved a record net operating income which rose 1.7% to RM23.63 billion, on the back of a 3.1% increase in fund based income as a result of higher contributions from all business sectors and key home markets.

Group gross loans expanded at a faster pace of 4.8% in FY18, compared with 1.7% previously. The Malaysian operations saw loans expanding 4.8%, Singapore 4.5%, Indonesia 7.0% and 10.9% for other international markets.

Maybank also highlighted that its net impairment losses for the year coming in 20.5% lower than the previous year, lifting operating profit by 9.3% to RM10.8 billion in 2018.

For Q4 alone, it also saw net impairment losses coming in 58.1% lower than Q3.

The bank continued to maintain a healthy liquidity position with its liquidity coverage ratio of 132.4% and loan-to-deposit ratio of 92.7%. Total capital ratio was 18.51% while its fully loaded common equity tier 1 ratio stood at 14.51%, both well above the regulatory requirements of 8.0% and 4.5% respectively.

On its prospects, Maybank said it will maintain its balance sheet expansion in line with forecast economic growth of its three home markets, in tandem with the group’s risk posture, and continue building on its diversified franchise and footprint to expand income streams through cross business collaborations and focusing on diligent pricing of its assets and liabilities.

Barring any unforeseen circumstances, the group expects its financial performance for 2019 to be satisfactory in line with the expected growth prospects of its key home markets.

The group has set the headline key performance indicator (KPI) for return on equity (ROE) of approximately 11%.

At 2.35pm, Maybank’s share price was trading unchanged at RM9.54 on 3,344,100 shares done.


Maybank FY18 net profit rises 7.9pc to RM8.11b

KUALA LUMPUR, Feb 26 — Malayan Banking Bhd’s net profit for the financial year ended Dec 31, 2018 (FY18) rose 7.9 per cent to RM8.11 billion from RM7.52 billion a year ago. Revenue increased to RM47.32 billion from RM45.58 billion previously. In…


What is Financial Planning?

For many people, financial planning is usually associated with insurance products or even unit trust funds. In reality however, it has a much broader scope. A comprehensive financial plan covers the following areas – investments, insurance, estate planning, cash flow management, taxation planning and others. In short, it involves the process of developing strategies to […]


Axiata exits M1 investment for RM1.65b

KUALA LUMPUR: Axiata Group Bhd via its wholly-owned subsidiary Axiata Investments (Singapore) Limited has accepted the voluntary conditional general offer by Konnectivity Pte Ltd for the group’s entire stake in Singapore-based mobile operator M1 Limited for RM1.65 billion cash at the offer premium price of S$2.06 based on terms in the offer documents dated Jan 7, 2019.

The group will effectively divest its 28.7% stake in M1 and exit its investment in Singapore with an estimated gain of RM126.5 million from this deal.

Axiata’s investment in M1 commenced in 2005 and the company had steadily contributed to the group’s growth over the years with dividends amounting to RM1.1 billion in the last 10 years. Over that period, it had generated healthy dividend yields of 7% over the years.

Given the financial returns as well as its strategic benefits, Axiata has expressed its satisfaction with its M1 investment. The group also believes in the long-term future of the company despite the short-term industry challenges with the new entrant into the market.

“Axiata has been consistent in its view that the share price over the last year does not reflect the intrinsic value of the company’s long-term future. Nevertheless, Axiata has made the decision to accept the offer due to the need for capital reallocation and new priorities in line with its vision to be the next generation digital champion by 2022 and the investments required to achieve that. The group also prefers not to be a minority investor in a potentially privatised company, making the investment illiquid,” it said in a statement.

Over the past years, all of Axiata’s operating companies (OpCos) in the region have outperformed the market, in terms of revenue market share; some having done so significantly. The group said its OpCos are in the top two largest mobile company positions in their respective markets, with many of them being best performing companies in most financial metrics.

As such and given the achievements in their markets, the group noted that continued investments will be required to capitalise on the current momentum. This is in addition to supporting the transformation of all of Axiata’s mobile-centric OpCos into digital converged companies over the next few years,

while at the same time, continuing to provide moderate dividends to its shareholders.

These investments include the modernisation of the group’s IT and network infrastructure, digitisation of its operations across all functions and investments into new growth areas especially in home and enterprise segments, and to a smaller extent, its digital businesses.

Axiata also expects to participate in industry consolidation if opportunities arise, and possible acquisitions in new growth areas over the mid- and long-term in some of its footprint countries.

Axiata president & group CEO Tan Sri Jamaludin Ibrahim said it is actually not an easy decision for the group.

“We like our investment in M1 and believe in its long-term future. At the same time, we need to undertake a major reprioritisation and make better use of our capital to chart a new chapter for the group in line with our new vision whilst also further enhancing our shareholders’ value,” he said.


Alam Flora seen lifting Malakoff’s FY19 earnings by 4%

PETALING JAYA: Malakoff Corp Bhd’s acquisition of Alam Flora is expected to improve its earnings by 4% in financial year ending Dec 31 (FY19) based on an earnings contribution of five months, according to AmInvestment Bank.

On a full-year basis, Alam Flora would increase Malakoff’s FY20 net profit by 10% and boost Malakoff’s fair value from 85 sen per share to about 94 sen a share, AmInvestment analyst Gan Huey Ling said in a note last Friday.

According to Gan, the research house will upgrade Malakoff’s FY19 earnings forecast if the RM944.6 million acquisition of 97.4% of Alam Flora from DRB-Hicom Bhd is completed by the third quarter of 2019 (Q3FY19).

Recently, Malakoff announced that the cut-off date for the fulfilment of the conditions for the acquisition has been extended to July 31.

“We have assumed Malakoff’s gross dividend per share to be 3.5 sen for FY18 and 4 sen for FY19. These translate into decent dividend yields of 4.2% for FY18 and 4.8% for FY19. Implied net dividend payouts are 93% for FY18 and 100% for FY19,” she added.

The research house maintained its “hold” recommendation on Malakoff with an unchanged discounted cash flow-based fair value of 85 sen per share. Its fair value of 85 sen per share implies an FY19 price earnings (PE) of 21.2 times and FY20 PE of 20.7 times.

Going forward, Malakoff has scheduled 100 days of maintenance shutdowns for the Tanjung Bin Energy (TBE) power plant in FY19.

As these are scheduled outages, Gan said the group will still receive capacity payments from Tenaga Nasional Bhd in FY19.

“We gather that there has not been any unplanned outage at the power plants in 4QFY18,” she said.

However, she said TBE power plant’s earnings may still be slightly affected as the rectification works for the voltage regulator, which started in early September, was only completed at the end of October 2018.

Recall that there were unplanned outages at the TBE power plant, GB3 power plant and KEV (Kapar Energy Ventures) power plant in Q3FY18.

Gan also noted that Malakoff is negotiating with General Electric, which is the main contractor, on the compensation for the unplanned outages at the TBE power plant.

She said the compensation would not be able to make up for the loss in capacity payments. However, Malakoff is hoping to extend the warranty period for the equipment and parts and/or receive compensation to cover the cost of repair or rectification works.

Previously, Malakoff’s target was to achieve the stipulated power purchase agreement threshold unplanned outage level of 6% by February 2019.

However, due to the numerous unplanned outages in Q3FY18, the timeline has been shifted to September 2019.


Alam Flora to boost Malakoff’s offerings for FY19

KUCHING: Malakoff Corporation Bhd’s (Malakoff) acquisition of Alam Flora Sdn Bhd (Alam Flora) is said to improve the former’s net profits in financial year 2019 forecasts (FY19F) by four per cent, based on an earnings contribution of five months. The team behind AmInvestment Bank Bhd (AmInvestment Bank) said that on a full year basis, the […]


Banks to maintain earnings potential this year: Analysts

PETALING JAYA: Analysts believe that the banking sector will be able to maintain its earnings potential this year, as margin pressure is expected to ease and continued loans growth with stable asset quality.

MIDF Research said while the industry’s loans growth moderated to 5.6% year-on-year (y-o-y) as at December 2018 due to moderation in business loans and loans for the purchase of residential properties, the growth was still slightly above its expectations.

“As for CY19, we expect a moderation in loans growth to 4.7% y-o-y due to the high base effect. We also believe that deposits growth will moderate to 5.3% y-o-y due to lower growth in fixed deposits growth this year,” the research house said in a note.

“This also means that there will be accretion in value for banks’ book value. Hence, we maintain our ‘positive’ view on the sector,” it added.

Overall, MIDF Research said it is cautiously optimistic of the banking sector continuing its solid performance in 2019.

Given the current market conditions, the research house said its top picks for the sector are Maybank, CIMB and Public Bank.

In a separate note, AmBank Research said it expects that the foreign fund inflows into emerging markets would benefit the share prices of the liquid banking stocks as the US Fed rate hike is tapering off.

Therefore, the research house said it maintained its “overweight” stance for the sector with “buy” calls on RHB Bank, Public Bank, Alliance Bank, BIMB Holdings, Maybank as well as MBSB. Its tops picks include Maybank, Public and RHB Bank.

AmBank Research noted that Maybank’s earnings are well diversified and the bank is still recording positive JAWs (a technical term that denotes income growth exceeding that of expenses) with growth in total income outpacing expenses.

It added that Maybank’s net interest margins could also improve further ahead with the lowering of its funding cost as the group releases the excess liquidity built-up in the first half of financial year 2018 (1HFY18).

“Meanwhile, dividend yield for the stock continues to be attractive relative to peers with its high payout ratio while potentially offering investors higher returns with the reinvestment of their dividends into additional shares under the DRS (dividend reinvestment scheme),” it added.


STMB exceeds expectations despite market conditions

KUCHING: Syarikat Takaful Malaysia Keluarga Bhd (STMB) performed above expectations for the financial year 2018 (FY18) despite the challenging market conditions seen last year, analysts observed. MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) in a recent report, pointed out that STMB reported strong growth of 43 per cent year-on-year (y-o-y) for its first […]