MBSB - Challenging times to persist

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 1.88

MBSB - A good FY13, but challenging FY14 ahead

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 1.88

MBSB - Bank Negara Malaysia measures to curb household debt

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.50

Promotional package led to a stronger personal financing growth again

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.50

4Q/FY12 results - revenue within expectations, NPAT a bit above. Maintain Buy Call.

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MERCURY

Price Call: BUY

Target Price: 2.68

Cost to income ratio expected to trend higher moving forward

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.50

Yet to diversify from its high concentration in personal loans

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.45

3Q/FY12 results - within expectations. Maintain Buy Call.

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MERCURY

Price Call: BUY

Target Price: 2.66

OSK keeps 'buy' call on MBSB

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: OSK

Price Call: BUY

Target Price: 3.02

OSK Investment Banking raised its fair value estimate for Malaysia Building Society Bhd shares to RM3.02 from RM2.70
as the financial services firm renews focus on driving fee-based income.

"The growth drivers are expected to be bancassurance tie-ups with several insurance players, as well as the kick-start of a foreign currency transfer business under Western Union," it said in a research note on Friday.

OSK maintained its "buy" call on the firm and added that the firm is also focused on maintaining the aggressive loans growth it showed in the past two quarters.

"We believe MBSB will repeat the fund-raising exercises carried out in 2011," OSK said.

At 10.14am Malaysia Building Society was up 0.89 per cent at RM2.27 per share while the Malaysia's benchmark composite index was up 0.01 per cent at 1618.18. - Reuters

Loan growth to moderate as year’s target has been exceeded

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.45

Kenanga raises MBSB's target price

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: KENANGA

Price Call: BUY

Target Price: 2.70

Kenanga Research lifted Malaysia Building Society Bhd's (MBSB) target price to RM2.70 per share despite the lender's first quarter earnings result came in marginally below expectations.

"The stock's valuation still looks undemanding at 5.9 times price-to-earnings ratio post adjustment, against its banking peers of 13.0 times," the broker said in a research note on Monday.

Maintaining "outperform" on the stock, Kenanga said MBSB offered potential capital upside of 21 percent, with an additional dividend yield of 2.5 percent, bringing the potential total return to 23 percent over the next 12 months.

"Its return on equity of 28.1 percent remains one of the highest for financial stocks," it added.

By 10.25am, MBSB's shares dropped 1.33 percent to RM2.23 per share, underperforming the Malaysia's benchmark stock index that shed 0.19 percent. -- Reuters

Strengthening the credit process

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.20

Growing its non-retail business

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.20

MBSB - Sustainable growth

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 2.50

Malaysia Building Society; Not Rated; RM2.21
Fair Value: RM2.50; MBS MK

Personal finance to remain key growth driver. Strict credit processes and continuous efforts to recover legacy NPL. Fair value at RM2.50, assuming 8x FY13 EPS.

Source: HwangDBS Research 26 March 2012

MBSB (FV RM2.70 - BUY) Company Update: Firing up Its Earnings Growth Pace

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: OSK

Price Call: BUY

Target Price: 2.70

At MBSB's analyst briefing last Friday, management shedlight on its outlook and the group's business in 2012.  We  areoptimistic  that the group will  sustain its loans  growth while  maintaining  asset quality. All in all, we are maintainingour positive view on MBSB on the belief that its initiatives and business strategies will continue to deliversustainable  earnings  growth. Maintain BUY, with an unchanged fairvalue (FV) of RM2.70, premised on 2.6x FY12 PBV.

Reviving corporatelegacy loans. Media  reports lastweek said MBSB has signed an agreement for term and bridging financingfacilities of up to RM215m with NCT United Development SB (NCT) to revive thelargest abandoned housing project in Malaysia. The project, which is part ofMBSB's new recovery facility, is situated in Bandar Baru Salak Tinggi inSepang, Selangor. The reports added that management is determined to addressand resolve its corporate legacy accounts and is  looking to  improve its net impaired loans ratio by 2-3%from 8.5% as at Dec 11.

Getting more out ofexisting branches.  Besides expandingits branch network, management said the group will also focus on making furtheroperational improvements and increasing employee productivity to maximizeincome per branch. The group also intends to reinvent the image of its branchesto standardize their look and feel, a move we view as essential in enhancingits corporate image. The company also aims to beef up its fee-based income byintroducing more new products and fee-based income services at its branches.

Higher civil servicepay  to perk up earnings  later. The  Government recently abolishedthe New Remuneration Scheme for civil servants (SBPA) and  reintroduced the existing MalaysianRemuneration System (SSM) with some enhancements such as an effective 7  ' 13% pay hike. While we think that MBSB willbenefit from the  hike in civil servants'pay  as this increases the lattergroup's  disposable income, we do not expect  the group to register higher-than-expected loans growth in 1H11 as  the salary adjustments may take time toimplement. .

Maintain BUY. Wecontinue to like MBSB's strong fundamentals backed by its; i) strong assetquality, ii) innovative business strategies, and iii) sound management. Nonetheless,we maintain our earnings forecast for now as we have  incorporated the outcome of management's initiatives into our earnings assumptions.Maintain BUY, with an unchanged FV of RM2.70, premised on 2.6x FY12 PBV.

Source: OSK188

MBSB (FV RM2.70- BUY) Corporate News Flash: Govt Scraps New Salary Scheme

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: OSK

Price Call: BUY

Target Price: 2.70

Prime Minister Datuk Seri Najib Tun Razak announcedyesterday that the Government is scrapping the New Remuneration Scheme forcivil servants (SBPA) and the existing Malaysian Remuneration System (SSM) willbe reintroduced with some enhancements. The PM added that a commission will beset up to conduct a comprehensive study of the civil servant remunerationsystem.

OUR TAKE

A more structured,transparent approach. The previous SBPA was met with criticism from thecivil servants union which claims that the scheme awards unequitable salary increasesthat favour those in the higher ranks of the civil service. We gather that the salaryadjustments announced yesterday, as shown in Figure 1, will be backdated from 1Jan this year and will be paid from this month (or the next) onwards. The PMalso announced that the Cost of Living Allowance (Cola) had been increased fromRM200 to RM250 for those in the B category while those in the C category willreceive RM150 compared with RM100 before. Given that the election is justaround the corner, the move appears to be an attempt to appease thelower-ranked government servants who make up the majority of the 1.4m civilservice force.

Already factored intoMBSB's earnings. We believe the overall effect from the pay hike showed inFigure 1 is equivalent to the upward salary adjustments under the SBPA, whichwe have incorporated into our forecasts. As depicted in Figure 2, assuming a conservative5% growth (average historical growth: ~8%) in Federal Government emolumentsfor  2012, the potential  size of the civil servant personal financing market will theoretically expand byRM4.6bn. This means that MBSB can easily expand its civil servants personalloan base by another RM204.8m, assuming that the company maintains its currentmarket share at 4.5%. However, we believe that the positive effects could onlybe measured from 2Q12 onwards as the adjusted salaries would only be paid outthis month or the next.

Maintain BUY.  Apart from the benefits arising from thecivil servant salary hike, we remain positive on MBSB's prospects as wecontinue to like the company's diversification strategy and innovativeness inexpanding its business. Thereby, we are retaining our BUY recommendation on thecounter, as well as its fair value of RM2.70, premised on 2.6x FY12 P/BV.

Source: OSK188

RHBInvest Research Highlights 13th February 2012

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: RHB

Price Call: BUY

Target Price: 15.00

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: RHB

Price Call: BUY

Target Price: 9.47

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: HOLD

Target Price: 7.41

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 6.23

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD

Research House: RHB

Price Call: SELL

Target Price: 11.01

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: RHB

Price Call: SELL

Target Price: 3.10

Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD

Research House: RHB

Price Call: SELL

Target Price: 3.56

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: RHB

Price Call: HOLD

Target Price: 2.32

Stock Name: RCECAP
Company Name: RCE CAPITAL BHD

Research House: RHB

Price Call: HOLD

Target Price: 0.57

13th February 2012

 

Malaysia Equities

Top Story

Banks ' Easing Headwinds + YTD Underperformance = Sector Upgrade              Neutral (Upgraded) Sector Update Public Bank ' Fair value at RM15.00 (from RM14.10)                                                     Outperform Maybank ' Fair value at RM9.47 (from RM7.33)                                          Outperform (upgraded) CIMB ' Fair value at RM7.41 (from RM6.20)                                          Market Perform (upgraded) AMMB ' Fair value at RM6.23 (from RM4.99)                                        Market Perform (upgraded) HL Bank ' Fair value at RM11.01 (from RM9.90)                                                        Underperform Affin ' Fair value at RM3.10 (from RM2.37)                                                                Underperform AFG ' Fair value at RM3.56 (from RM3.25)                                                                Underperform MBSB ' Fair value at RM2.32 (from RM1.95)                                                           Market Perform RCE ' Fair value at RM0.57 (from RM0.50)                                                              Market Perform

Sector Update

Plantation ' Only Time Can Resolve The Indonesian Tax Structure Problem                    Overweight Sector Update -          The seasonal decline in production continued in Jan as CPO production fell 13.8% mom. Exports fell by a slightly smaller 13.2% mom also due to seasonal factors, post-festive season. Despite the lower CPO stock levels, annualised stock/usage ratio rose to 11.1% (up from 10.5% in Dec), mainly due to the smaller export volume in Jan.

Corporate Highlights

SEG International ' No Signs of Slowing Down                                                            Outperform Visit Note -          The management expects total student population of 35k (vs. our previous assumptions of 37k) by end-2012, implying yoy growth of almost 30% from the current 27k.   Gamuda ' PDP Terms For Klang Valley MRT Announced                                        Market Perform Company Update -          The agreement between MRT Co and project delivery partner (PDP) for the Klang Valley MRT project MMC-Gamuda JV has been signed with key terms being: 1) The PDP will be paid a fee equivalent to 6% of total contract value; 2) If the actual project cost exceeds the target cost by up to 15%, the PDP fee will be reduced in accordance with an agreed formula; 3) The PDP will have to shoulder the balance if the actual project cost exceeds the target cost by 15%; and 4) The PDP is liable to a liquidated and ascertained damage (LAD) for late delivery of RM500,000/day.   MPHB ' Sells down stake in Associate, Philippine Racing Club                                       Outperform News Update -          MPHB has sold a 13.1% stake in Philippine Racing Club Inc. (PRCI) at an average price of Peso 9.50/share, for Peso 722.4m (RM51.64m). Post-disposal, MPHB will own 19.9% of PRCI, and will no longer equity account it as an associate. MPHB will record a dispoal gain of RM17.34m.   CSC Steel ' 4QFY12/11 in the red on inventory writedown                                             Trading Buy Results Note -          FY11 net profit exceeded our full-year forecast by 42%, but missed the full-year market consensus by 22%. The variance against our forecast largely came from a lower-than-expected writedown of inventories. CSC Steel also declared a 7sen single tier dividend (net yield of 4.9%).

Regional Equities

Indonesia Banks : Opportunity To Accumulate                                                             Overweight Sector Update Bank Rakyat ' Fair value IDR8,200                                                                               Outperform Bank Mandiri ' Fair value IDR7,900                                                                             Outperform BCA ' Fair value IDR7,500                                                                                     Market Perform Bank Danamon Fair value IDR5,500                                                                             Outperform

Macro

GDP ' Resilient GDP Growth In 4Q 2011, Odds Of An Upgrade Improving Economic Update (published 10 Feb 2012) -          The country's real GDP growth is estimated to have softened to 5.4% yoy in the 4Q, after bouncing back to +5.8% in the 3Q. The moderation in real GDP growth is expected to persist into 2012, due to global economic slowdown amidst a lingering sovereign debt crisis in the Eurozone.

 

OSK keeps "buy" call on MBSB at RM2.70

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: OSK

Price Call: BUY

Target Price: 2.70

OSK Research is maintaining a "buy" recommendation on Malaysia Building Society Bhd (MBSB) with a fair value of RM2.70, in line with the company efforts to grow its loans book aggressively
while keeping its asset quality intact.

In a note today, the research house said MBSB was channeling greater efforts into generating more fee-based income via bancassurance and other products.

The company, which has been innovative in bundling its products, also planned to roll out another bundled product, it said.

OSK Research said it continued to like MBSB's diversification and
innovativeness in growing its business moving forward.

It said other key rerating catalysts of the stock were higher-than-expected loans growth, a further upgrade in civil servants' salaries, continuous improvement in asset quality, and a sustainable dividend policy.

At mid-day break, MBSB's share fell two sen to RM2.11. -- BERNAMA

Greater Room For Upside Surprise

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: OSK

Price Call: BUY

Target Price: 2.70

Significantly higher loan growth target for FY12

Stock Name: MBSB
Company Name: MALAYSIA BUILDING SOCIETY BHD

Research House: AMMB

Price Call: BUY

Target Price: 2.70