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Author: Tan KW   |   Latest post: Wed, 11 Dec 2019, 6:24 PM

 

COMMENTS ON ALLIANCE BANK BERHAD (2488) - louisesinvesting

Author:   |    Publish date:


Tuesday, November 12, 2019 

 

FIGURE 1: ALLIANCE BANK BERHAD LAST 5 YEARS SHARE PRICE TREND
 
**analysis based on 2019 annual report.
1.       GENERAL INTRO: This counter core business is on various banking services. Alliance Bank is one of the major banks in Malaysia. Alliance Bank's last five years earning per share fluctuated from 31.9 to 34.8sen. At current share price, P/E ratio is at relatively low level (9.26). Total annual dividend payout was 16.7sen per share, at current share price dividend yield is around 5.84%.
 
2.       NOTABLE POINTS:
a.       Alliance Bank is not one of the top performing banks in Malaysia, return on equity around 8.37% only, cost-to-income ratio, relatively high at around 50%. Management have room for improvement to match the performance of other major banks in Malaysia. Dividend payout ratio is at 48%, which is similar other banks. Overall, shares investment in Alliance Bank are less attractive compared to Maybank, CIMB Bank and Public Bank, except for the good dividend yield at current low share price.
 
3.       IS THIS COUNTER A STRONG GROWTH STOCK? 
a.       REVENUE RANGE (million): ~1622 million in 2019 annual report, this is a high revenue company.
b.      SHARE PRICE: from 2013-2019, share price on decreasing trend from RM5.60 to around RM2.80
c.       EARNING PER SHARE (EPS): earning per share in last 5 years were fluctuating between 31.9 to 34.8 sen per share.
d.      FUTURE POTENTIAL/PROSPECTS: very dependable and reliable counter, share price expected to be stable.
e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 24 million, around 0.04% of total assets.
 
4.       IS THIS A STRONG DIVIDEND STOCK?     
a.       DIVIDEND YIELD: in 2019 report, Alliance Bank declared a total dividend payout of 16.7 sen per share, amounts to dividend yield of 5.84 % based on current share price.
b.      CONSISTENCY: consistent dividend payout, last five years (2015-2019) dividends declared range from 14.5 to 16.7 sen per share.
 
5.       OTHER INDICATORS:
a.       CASH FLOW: cash flow is positive, around RM 1804 million, equivalent to RM 1.17 per share
b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is well supported by institutional investors, there are 30 institutional investors at top 30 major shareholders list, including EPF (10.61%), DBS Bank Ltd (29.06%), Permodalan Nasional Berhad (0.38%), Focus Asia Strategies Ltd (4.75%) and few insurance companies and investment funds.
 
Disclaimer: The content of the blog posts are for sharing purpose only. Readers are encouraged to carry out further research and analysis as well as follow up latest update information before making any investment decisions.

 
 

 

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