FIGURE 1: ALLIANCE BANK BERHAD
LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2019 annual report.
1.
GENERAL INTRO: This counter core business is on various
banking services. Alliance Bank is one of the major banks in Malaysia. Alliance
Bank's last five years earning per share fluctuated from 31.9 to 34.8sen. At
current share price, P/E ratio is at relatively low level (9.26). Total annual
dividend payout was 16.7sen per share, at current share price dividend yield is
around 5.84%.
2.
NOTABLE POINTS:
a. Alliance
Bank is not one of the top performing banks in Malaysia, return on equity
around 8.37% only, cost-to-income ratio, relatively high at around 50%.
Management have room for improvement to match the performance of other major
banks in Malaysia. Dividend payout ratio is at 48%, which is similar other
banks. Overall, shares investment in Alliance Bank are less attractive compared
to Maybank, CIMB Bank and Public Bank, except for the good dividend yield at
current low share price.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~1622 million in 2019 annual report, this is a high revenue
company.
b. SHARE
PRICE: from 2013-2019, share price on decreasing trend from RM5.60 to around RM2.80
c. EARNING
PER SHARE (EPS): earning per share in last 5 years were fluctuating between 31.9
to 34.8 sen per share.
d. FUTURE
POTENTIAL/PROSPECTS: very dependable and reliable counter, share price expected
to be stable.
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 24 million,
around 0.04% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2019 report, Alliance Bank declared a total dividend payout of 16.7
sen per share, amounts to dividend yield of 5.84 % based on current share price.
b. CONSISTENCY:
consistent dividend payout, last five years (2015-2019) dividends declared range
from 14.5 to 16.7 sen per share.
5.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 1804 million, equivalent to RM 1.17 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 30 institutional
investors at top 30 major shareholders list, including EPF (10.61%), DBS Bank
Ltd (29.06%), Permodalan Nasional Berhad (0.38%), Focus Asia Strategies Ltd (4.75%)
and few insurance companies and investment funds.
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