Yes, MBSB is trading below its book value. Many big listed Chinese banks in Hong Kong are trading below their boik values.
OTOH PBB and HLB are trading above their book values.
The question calvin did not answer is, why is MBSB trading below its book value? He has written so many lines on MBSB but failed in answering the mist obvious ans important question.
Value wise and appreciation potential is very much higher than PBB loh..!!
MBSB has margin of safety PBB has none loh...!!
U buy on fundamental undervalue MBSB compare to u invest on overvalue PBB based on brand loh....!!
Value investor invest chose invest base on fundamental undervalue the foundation of all value investment mah...!!
Posted by 3iii > Aug 31, 2019 8:45 AM | Report Abuse
A P/B ratio less than one is seen as buying opportunity by some market participants.
But, MANY a time, it also suggests that the company is earning weak or negative returns on its assets, or the assets are overstated.
Posted by 3iii > Aug 31, 2019 8:51 AM | Report Abuse
Of course, the price-to-book ratio is only one of many things to consider when picking bank stocks. Investors must also consider the timeline for greater profitability to support higher values.
Added Calvin tan mbsb stock selection to his portfolio list. Please advise which of the stocks in your followed lost that you are no longer into so I can edit and adjust your performance. If you have free time, also do advice the percentage of Holdings for each of your held stocks so we can understand your confidence level and belief in each stock.
If I may answer 3iii simple question for Calvin tan to educate him, when I look at Banks for investment I use this mental model as the basis. How many people give me money to borrow ( which determines how strong I am when there is a crisis), who and what forms of lending am I giving ( which determines how safe my loans are), and how high are my non performing loans ( which determines how much real income I actually make, as banks love to delay putting npl losses on their books as it affects profit and loss).
In mbsb case, their biggest customer group is the b40 segment. In latest quarterly financials, they are borrowing 20 billion for PERSONAL FINANCING, 9.9 billion for corporate loans and financing, 5.7 billion for property loans and mortgage financing and 208 million for auto financing. Basically the safest segments property and mortgage is only 5.7 while the riskiest segment is 20 billion.
20 billion in outstanding loans to b40 individuals for PERSONAL FINANCING. Does Calvin tan needs a dictionary to define what personal financing means? In times of crisis, how much of this 20 billion can we collateralise? What is the NPL ( borrowers run away, declare bankruptcy, or straight up not pay) for this 20 billion. Please just don't look at the profits, we need to look at the loan portfolio risk.
Then touch your heart and ask yourself sincerely, if a bank gives you fixed deposit rate of 3.8% and uses it for loans to this group instead of the corporate loans (like lending to topglove,ql,hartalega, Sunway, hapseng, etc), would you really feel comfortable putting money here instead of into backs like Hong Leong, Maybank and public Bank?
>>>>>>>>>>>
3iii Calvin has not enlighten us why this financial institution is trading at below its book value. 31/08/2019 8:29 AM
On the non performing loans ration, as a comparison, mbsb is at 1.3%, while Hong Leong as an example is at 0.87%.
What did this mean? Taken as an example
Mbsb total 36 billion of loans, non performing is around 468 million every year. 1.3%
Hong leong total 137 billion of loans, non performance of 0.87% is around 1.19 billion.
Using the same ratio, if mbsb grew its b40 loan book ( which is almost impossible to grow further without increasing the NPL and seriously undermining the business).
If you think banks are a guaranteed pot of gold, I invite you to look at the list of defunct and BANKrupt banks in the history of Malaysia and Singapore, and the exact reasons as to what happened. The reason are all the same, foolhardy loans to foolhardy individuals done at greedy rates which exploded when they least expected it.
Business Background Malaysia Building Society Bhd is a Malaysia-based company. The company operates through four major segments: a financing business, which grants loans on the security of freehold and leasehold properties and offers retail financing and related services; a property development business, which develops residential and commercial properties; a business that leases real property, which leases out office buildings; and a hotel operation business, which leases hotel rooms, in addition to retail and other related business. The company also operates a business in project management and investment holding. It generates the majority of its total revenue from the financing business, and conducts business solely in Malaysia.
Let's Highlight what i3 investor Forum Team has quoted about MBSB
The company operates through four major segments: a financing business, which grants loans on the security of freehold and leasehold properties
HAS PHILIP CHECKED WITH THE MANAGEMENT OF MBSB?
WHY THEY SAID
(((The company grants loans on the security of freehold and leasehold properties )))
THERE ARE THOSE WHO BOUGHT HOUSES ARE GOTTEN LOANS AND THERE ARE THOSE WHO USED HOUSES ARE COLLATERAL FOR PERSONAL LOANS
SO THE LOANS ARE SECURED
READ AGAIN
Business Background Malaysia Building Society Bhd is a Malaysia-based company. The company operates through four major segments: a financing business, (((which grants loans on the security of freehold and leasehold properties))) and offers retail financing and related services; a property development business, which develops residential and commercial properties; a business that leases real property, which leases out office buildings; and a hotel operation business, which leases hotel rooms, in addition to retail and other related business. The company also operates a business in project management and investment holding. It generates the majority of its total revenue from the financing business, and conducts business solely in Malaysia.
Read deeper into the financial statements, don't get fooled by the nice sounding business introduction or the nice looking covers. For a annual report/qr the important points has always been the last few back pages, the balance sheets, the notes and the errata. Why don't you read again properly, how much of the loan book breakdown is like. How many percent is loans for corporate financing, how much is for house loans, how much is for personal financing.
READ AGAIN THE NOTES IN DETAIL. HOW SECURE IS THE 20 BILLION IF PERSONAL FINANCING LOANS.
The automative land of 200 million yes secure.
The corporate financing and projected yes secure.
The housing loans yes secure.
The personal financing? I SUGGEST MR CALVINTANENG TO DO MORE STUDY, OTHERWISE HE WILL END UP EAT MORE TALAMT KUEH AT 9 CENTS TO 3.5 CENTS, KPS DROP AND DROP AND DROP AFTER DIVIDEND, AND UZMA FROM 89 CENTS DOWN DOWN DOWN.
WHY DON'T YOU ASK PROPERLY WHAT SECURITY THEY HAVE FOR THE 20 BILLION IN PERSONAL FINANCING LOANS, THE QUALITY OF LOANS AND IS AFFECT ON THE INTRINSIC BOOK VALUE OF MBSB?
if you want the truth do you listen to your pastor Kong hee, management of city harvest? Or the audited accounts of city harvest itself?
You need to use your eyes, ears and brains to invest wisely.
I'm sure the management of city harvest church is right and the entire 99% Singapore government is wrong.
I hope your church members still visit you in the penitentiary.
Salary deduction guaranteed? No collateral as long as government worker is a safe bet? Many have said and many have been broken.
False assumptions to equate government workers as a guaranteed high quality resource.
If you assume just because it's a government worker then definitely will be a safe bet no need to worry no need collateral, then you deserve to lose every cent of you're investment.
Posted by calvintaneng > Sep 5, 2019 12:12 AM | Report Abuse X
Posted by (HK1997 again) Philip > Sep 5, 2019 12:06 AM | Report Abuse
Pchem collapsing? Don't make me laugh. 50 billion dollar company with 4.3 billion in revenue and 1.1 billion in profit AFTER TAX and a horde of cash behind it.
I am just enjoying collecting my 11 +18 cents dividend since February when I started buying at 8.15 collecting my 11 +18 cents dividend
SO?
COST OF PURCHASE Rm8.15
Less 29 sen dividend = Rm7.86
Price now Rm6.83
SO REAL LOST OF Rm1.03 PER SHARE
IS THIS PHILIP IN HIS RIGHT MIND?
YOU BETTER DON'T LEAD SORCHAI TO HOLLAND HOR! 05/09/2019 12:14 AM
@huawei19 be careful of this Calvin!!....his hard core promoted stock may take you to HOLLAND. Good example is KPS, nonstop bleeding from RM1.65 to RM0.71 now.. 04/09/2019 9:19 PM
You should have sold it after collecting the Special Dividend Bonus. I sold mine all of it at RM 1.025+ Special Dividend Bonus when I saw the ECRL Project was not moving anywhere..
Anyway, Kelvin thanks for this MBSB research. I decided to buy MBSB shares since I always wanted to enter into the Banking sector. This is my first entry into Banking Sector. After MBSM, I proceed to continue buying two other Banking Shares
Hope to see you back in i3 in November.
Cheers!
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Posted by cheoky > 2019-08-29 23:31 | Report Abuse
No to uzma and mbsb. Yes to bimb and curry mee