Journey to Wealth
Bursa Malaysia - 2Q12 broadly in line
Period 2Q12
Actual vs. Expectations Results came in broadly in line with our expectations. The reported 2Q12 net profit of RM37.9m was approximately 8.6% above our quarterly forecast of RM34.9m. The accumulated six months' net profit of RM78.7m accounted for 52% of the street's full year estimate and our forecast of RM151m.
Dividends Declared an interim single-tier DPS of 13.5 sen (vs. our estimate of 13.0 sen). Ex-date is on 31/07/2012 while the entitlement date is fixed on 02/08/2012.
Key Result Highlights QoQ, total income and net profit declined 4.1% and 6.9% respectively to RM106.0m and RM37.9m due mainly to the much lower average daily trading value and volume in 2Q12. The average daily trading value and volume were recorded at RM1.5b (-20.6% QoQ) and 1.1b shares (-41.5% QoQ) compared to RM1.9b and 2.0b shares in 1Q12. In addition, its other operating revenue also declined 44% QoQ to RM5.6m from RM10.0m.
YoY, both the total income and net profit grew 4.9% and 6.3% respectively despite a lower average daily trading value (2Q12: RM1.6b). This was due to increases in the stable revenue income streams (see overleaf for details).
On a cumulative basis YoY, the total income declined marginally by 0.3% while net profit grew marginally at 3.3% due mainly to a lower overall operating cost by 6.1% YoY.
Outlook With our more optimistic market view, we believe that market conditions should improve in the coming quarters. We have recently pegged our 12-month index level at 1,750 and revised up our year-end index target to 1,680 (from 1,650 previously). We believe the equity market average trading value and volume should rise back to RM1.85b and 1.45b respectively in 2H12, which will be 25% and 27% respectively higher than 2Q12.
Change to Forecasts Maintaining our FY12E-FY13E net earnings estimates of RM150.7m (+3.1% YoY) and RM175.6m (+16.5% YoY).
Rating Maintain OUTPERFORM
Valuation Maintaining our target price of RM7.70, which is based on 23.3x FY13 PER and 4.6x FY13 PBV, which are in line with its 3-year average Forward PER and PBV of 23.9x and 4.4x respectively.
Risks Much slower than expected market activities.
Source: Kenanga
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
