Results Update
For QE30/6/2019, Maybank's net profit rose 7% q-o-q but dropped 1% y-o-y to RM1.94 billion while revenue was up 1% q-o-q or 13% y-o-y to RM13.05 billion. The increase in net profit was attributable to increase in Other Operating Income of RM302 million - the biggest item is net investment income of RM219 million - and (wait for this) decrease in impairment losses on loans, advances, financing and other debts of RM212 million. The latter would be a positive development as the market has been holding its breath- expecting Maybank to take a big hit from Hyflux and other big names.
Table: Maybank's last 8 quarterly results
Graph: Maybank's P&L for last 55 quarterly results
Valuation
Maybank (closed at RM8.57 yesterday) has a PER of 11.8 times (based the last 4 quarters' EPS of 72.79 sen). In addition, it is trading a price to book of 1.2 times (based on NTA of RM7.07 as at 30/6/2019). It has a dividend yield of 6.7%. At these multiples, Maybank is deemed fairly attractive, especially for income-seeking investors.
Technical Outlook
Maybank tested the line connecting the troughs/lows for the past 2 years at RM8.50. It came fairly close to the "uptrend line" SS, where the support would be at RM8.30. Maybank is likely to find support at these prices unless some terribly bad events happened.
Chart: Maybank's weekly chart as at Aug 29, 2019 (Source: MalaysiaStock.Biz)
Conclusion
Based improved financial performance, fairly attractive valuation and long-term positive technical outlook, Maybank remains 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.
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