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Friday, April 21, 2017

PBBank: Steady-as-she-goes

Result Update

For QE31/3/2017, PBBank's net profit dropped 16% q-o-q but rose 1.5% y-o-y to RM1.25 billion while revenue dropped 1% q-o-q but rose 0.4% y-o-y to RM5.03 billion. PBT dropped q-o-q mainly due to the allowance for loan impairment in the current quarter of RM67.1 million as compared to a net writeback of RM37.1 million in the preceding quarter, higher other operating expenses in the current quarter and non-recurring gain on revaluation of investment properties of RM60.7 million in the preceding quarter.


Table: PBBank's last 8 quarterly results

From the chart below, we can see that PBBank's top-line and bottom-line have stagnated for the past 6 quarters.


Graph: PBBank's last 45 quarterly results

Valuation

PBBank (closed at RM19.92 yesterday) is now trading at a PE of 14.7 times (based on last 4 quarters' EPS of 135 sen). At this PE multiple, PBBank is deemed fully valued. It pays a decent dividend yield of 2.9%.

Technical Outlook

PBBank is still in a long-term uptrend, with 30-month EMA acting as a support at RM19.00. 


Chart: PBBank's monthly chart as at Apr 20, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, fair valuation & positive technical outlook, PBBank is still a good stock for long-term investment. However PBBank is likely to underperform banking stocks that had been sold down in the past 2-3 years, such as CIMB, AMBank & AFG. Hence, CIMB, AMBank & AFG are likely to give you better return than PBBank.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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