Tuesday, April 23, 2013

PBBank- earning growth slowed down by higher personnel cost

Result Update
For QE31/3/2013, PBBank's net profit dropped 2.4% q-o-q but increased 2.9% y-o-y to RM968 million while revenue increased 1% q-o-q or 9% y-o-y to RM3.673 billion. Net profit dropped slightly q-o-q due to higher personnel costs and lower other operating income.

Table: PBBank's last 8 quarterly results

From the chart below, we can see that PBBank's profit margin has been sliding for the past 2 years. The lower profit margin has capped the group's bottom-line during the period.

Chart 1: PBBank's last 29 quarterly results


PBBank (closed at RM16.32 yesterday) is now trading at a PE of 14.7 times (based on last 4 quarters' EPS of 111 sen). At this PE multiple, PBBank is deemed reasonably priced, with potential to command a PE of 16-17 times.

Technical Outlook

PBBank is still in an uptrend..

Chart 2: PBBank's monthly chart as at April 23, 2013 (Source: quickcharts)


Based on good financial performance, reasonable valuation & still-positive technical outlook, PBBank is still a good stock for long-term investment.

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, PBBank


Ethan Lee said...

Dear Alex,

Can you please comment about Johotin technical outlook? Is it still attractive to buy at RM1.62?

Thank you.

Alex Lu said...

Hi Ethan Lee,

If Johotin breaks the RM1.60 support, the uptrend would be over and the stock would enter a sideway phase. If it breaks the RM1.40 support, it may ever go into a downtrend.

Let's wait & see how well the RM1.60 support can hold up.