BIMB: Earnings Rose

Results Update

In QE30/9/2018, BIMB's net profit rose 32.5% q-o-q or 4.7% y-o-y to RM199 million while revenue rose 9.8% q-o-q or 19.4% y-o-y to RM1090 million. BIMB's PBZT increased by RM59.0 million or 24.9% q-o-q. The increase came from:

1) Bank Islam Msia Bhd which reported an increase in PBZT of RM31.5 million or 16.3%, due to increase in total income of RM54.1 million which was partly offset with higher IATD (increased by RM14.1 million) and increased net allowance charged for impairment on financing and advances (increased by RM11.3 million); and

2) Syt Takaful Msia Bhd which reported an increase in PBZT of RM26.4 million or 43.0%, which was attributable to higher net wakalah fee income.


Table: BIMB's last 8 quarters' P&L


Graph: BIMB's last 26 quarters' P&L

Valuation

BIMB (closed at RM3.75 in morning session) is now trading at a PER of 9.4x (based on last 4 quarters' EPS of 40 sen). At this pER, I believe BIMB is a fairly attractive.

Technical Outlook

BIMB has been declining gradually from a high of RM4.40 in early January to a recent low of RM3.40. Its immediate support is at RM3.40-3.50 while its immediate resistance is at RM3.75-3.80. Until BIMB has broken above its downtrend line at RM3.85, it is likely to remain in its diwnward channel.


Chart 1: BIMB's monthly chart as at Nov 29, 2018_12.30pm (Source: MalaysiaStock.Biz)

Chart 2: BIMB's daily chart as at Nov 29, 2018_3.30pm (Source: MalaysiaStock.Biz)

Conclusion

Based on tsatisfactory financial performance and fair valuation, BIMB is a good stock for long-term investment.

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.

BIMB Getting Ready For The Race?

Technical Outlook

BIMB has just broken above its 2013 high of RM4.29 and traded at a high of RM4.43 around 10:45am. If this upside breakout can sustain, BIMB could continue its prior uptrend. Based on a 1-to-1 extension, the potential target for a successful rally is RM5.00.


Chart 1: BIMB's weekly chart as at Feb 10, 2017_10.56 (Source: MalaysiaStock.Biz)

Its warrant, BIMB-WA has however showed no sign of any impending upside move. Trading at a premium of 17%, BIMB-WA has an exercise price of RM4.72 & expiry date of Dec 4, 2023. If BIMB can continue its prior uptrend, BIMB-WA would be a very good bet.


Chart 2: BIMB-WA's daily chart as at Feb 10, 2017_10.48 (Source: MalaysiaStock.Biz)

Recent News Flow

Today, the Sundaily published an extract bullish report on BIMB from HLIB Research (here). HLIB initiated a BUY call for BIMB with a target price of RM5.00. HLIB highlighted the strength of BIMB as follows:

• It consistently delivers top-tier ROE in the industry with an average of 11%, post-Bank Islam stake acquisition. In comparison, only two other banks – Public Bank Bhd and Alliance Financial Group – managed to maintain a double-digit ROE.
• It has high current accounts and saving accounts (CASA) ratios of 37% to 47%, higher than the industry average of 25%, which benefit mainly government bodies and agencies and religious associations.
• It has good asset quality, with gross impaired financing improved from a high of 22% in FY05 to FY06 to 1.1% in FY15.
• It is the only syariah-compliant full-fledged bank listed on Bursa Malaysia, riding on the under-served and rising Islamic finance awareness in Malaysia.

Recent Financial Results

In the last quarter (QE30/9/2016), BIMB's net profit dropped 2% q-o-q but rose 17% y-o-y to RM141 million while revenue rose 5% q-o-q or 10% y-o-y to RM881 million.


Table: BIMB's last 8 quarters' P&L


Graph: BIMB's last 18 quarters' P&L

Valuation

BIMB (closed at RM4.28 on Feb 8) is now trading at a PER of 11.6x (based on last 4 quarters' EPS of 37 sen). I believe this is a fair PER.

Conclusion

Based on tentative technical breakout, satisfactory financial performance and fair valuation, I reiterate my BUY call for BIMB. The alternative is to get into its warrant, BIMB-WA, which may present a better reward-to-risk proposition. Good luck!

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.

BIMB: Potential Bullish Breakout

Technical Outlook

BIMB broke above its upper line of its very gradual downward channel at RM4.15 today. This downward channel dates back to August 2013 or 3 years old. Any price breakout of a long-established "trend" could lead to a significant move.


Chart 1: BIMB's weekly chart as at Oct 4, 2016-10.10am (source: Chartnexus)

Recent Financial Performance

BIMB's latest quarterly results shows its net profit rose 6% q-o-q or 11% y-o-y to RM144 million. Its revenue is mixed- down 6% q-o-q but rose 3% y-o-y to RM839 million.


Table: BIMB's last 8 quarterly P&L


Chart 2: BIMB's last 17 quarterly P&L

Valuation

BIMB (closed at RM4.14 last Friday) is now trading at a trailing PER of 11.5 times (based on last 4 quarters' EPS of 36 sen). Its price to book is at 1.66 times (based on NTA of RM2.48 per share as at 30/6/2016). In term of valuation, BIMB is fairly valued.

Conclusion

Based on satisfactory financial performance, fairly valuation & potentially bullish technical outlook, BIMB could be a good stock for a trading BUY.

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.