FIGURE 1: MALAYAN BANKING
BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2020 annual report.
1. GENERAL INTRO: MAYBANK’s core business
is in banking. MAYBANK is the largest bank in Malaysia.
2.
NOTABLE
POINTS:
a. In FY 2020, Maybank's net profit declined 20.9%
YoY to RM6.48 billion, or an earnings per share of 57.7 sen. Despite the fall
in net profit, Maybank made a total dividend declaration of 52.0 sen per share,
translating to a dividend payout ratio of 91.2%.
b. As one of the largest loan provider in Malaysia,
Maybank's losses due to impaired loans is low. Its Net Impaired Loan percentage
from FY2012 to 2020 ranged from 0.95 to 1.62%.
c. In the FY 2020
report also shown that if Maybank shares were invested long term over 25
years (1995-2020), the total shareholders return would have amounted to 447.17%
(KLCI: 268.59%), which is equivalent to an effective annual rate of return of
7.03% (KLCI: 5.35%), which shows that Maybank is a stock counter that is worthy
of long term investment.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 51030 million as
reported in 2020 annual report, this is a high revenue company. Between year
2012-2020, the counter’s revenue has been on an overall rising trend. On the
other hand, both of the Profit Before Tax (PBT) and Profit After Tax (PAT) are also
on a gradual rising trend.
b.
SHARE PRICE: from Jan 2016 to Jan 2021, share
price range between RM7.00 to RM10.00.
c.
EARNING PER SHARE (EPS): earning per share in
last 5 years was overall steady, whereby it ranged from 57.7 to 74.2 sen.
d. PRICE TO EARNINGS (P/E) RATIO: current P/E ratio
is 14.56, which shows that the share price is not too expensive to invest in
e.
FUTURE POTENTIAL/PROSPECTS: share price expect
to be stable in the next few years.
f. CAPITAL EXPENDITURE (CAPEX): spending on
purchase of new fixed assets and other investments amount to about RM 480
million, which is around 0.06% of total assets. This shows that the management
is not making a major investment in the future growth and expansion of the
business.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2020 financial year, MAYBANK declared
a dividend payout of 52 sen to its shareholders, which amounts to a dividend
yield of 6.31%.
b. DIVIDEND PAYOUT RATIO: The dividend-to-earnings
payout ratio is about 91%, last few years dividend-to-earnings payout ratio ranged
from 77 to 91%.
c. CONSISTENCY: This counter’s dividend payout has
been very consistent (dividend paid to shareholders in 5 years out of 5 years)
in the last five years, whereby dividends paid to shareholders ranged from 52
to 64 sen per share.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN ON EQUITY (ROE): in 2020 financial year, MAYBANK
reported a moderate return of shareholders’ equity, at 8.1%. Last five years
ROE ranged from 8.1 to 10.6 %.
b. COST-TO-INCOME RATIO: In FY2020, the report
cost-to-income ratio is 45.4%. Last five years cost-to-income ratio ranged from 45.4 to 48.6 %. This
shows that the cost of doing business is very low, which is normal in the
banking industry.
c. DEBT-TO-EQUITY (GEARING) RATIO: Its gearing
ratio is at 883%, whereby its debt level is more than its equity, resulting in
a potentially unhealthy balance sheet.
d.
CASH FLOW: cash flow is positive, at around RM 43813
million, equivalent to RM 3.83 per share.
6.
OTHER
INDICATORS:
a. SUPPORT BY INSTITUTIONAL INVESTORS: This counter
is very well supported by institutional investors, there are 24 institutional
investors at top 30 major shareholders list, including a few investment funds, as
well as insurance funds and retirement funds. Its major shareholders are AMANAH
SAHAM BUMIPUTERA (35.24%), EPF (14.11%) and PERMODALAN NASIONAL BERHAD (7.27%).
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