Maybank has just announced its results for QE30/9/2011. Its net profit increased by 11% q-o-q or 25% y-o-y to RM1.286 billion while turnover increased by 6% q-o-q or 21% y-o-y to RM6.074 billion. From Chart 1 below, we can see that Maybank's top-line & bottom-line are growing steadily for the past 8 quarters.
Table: Maybank's last 8 quarterly results
Chart 1: Maybank's 24 quarterly results
Valuation
Maybank (closed at RM8.25 yesterday) is now trading at a trailing PE of 12.9 times (based on last 4 quarters' EPS of 64 sen). Based on steady growth, Maybank should deserve a higher PE multiple, possibly 15 times. However, Maybank may be affected by the risk aversion caused by the European sovereign debts problem, which saw many funds reducing their exposure to banking stocks. I feel that this is not appropriate for a Malaysian banking stock that operates mainly in Malaysia.
Technical Outlook
If we take a long-term view of Malaysia, we can see that the stock has strong resistance at RM9.50. Its medium-term outlook is slightly negative, with the stock trading below the 10-month SMA line. Its monthly indicators have also turned downward. However, if the bear market were to get worse, the stock should see strong support at its "long-term uptrend line" at RM6.50. In the past, that "long-term uptrend line" had failed twice- during the Asian financial crisis in 1997-98 & the Global financial crisis in 2008.
Chart 2: Maybank's monthly chart as at Nov 1, 2011 (Source: Tradesignum)
Conclusion
Based on good financial performance & attractive valuation, I think Maybank is a good stock for long-term investment. Due to the negative technical outlook, I would rate it a HOLD for now.
1 comment:
Hi Alex
Maybank is due to declare its final dividend of 32sen by this week, which come together with dividend reinvestment option at discount 10% to market price. Lets hope it could serve as catalyst to move share price upward
Post a Comment