Bursa KLSE stocksMarket Updates

&&AMMB Aims for 15% Upside with Robust Earnings and NIM Stability&&

Posted on September 18, 2024 at 11:03 am (GMT+8)

Date: September 17, 2024
Broker: Maybank Investment Bank Berhad

Stock Overview

Current Share Price: MYR 5.17
Market Capitalization: MYR 17,134 million
Target Price: MYR 5.95
Potential Upside: 15%

Valuation Metrics

Price-to-Earnings Ratio (PER):
- CY24E: 9.4x
- CY25E: 8.8x
Price-to-Book (P/B):
- CY24E: 0.9x
- CY25E: 0.8x
Return on Average Equity (ROAE):
- CY24E: 9.5%
- CY25E: 9.5%
Net Yield:
- CY24E: 5.2%
- CY25E: 5.7%

Net Interest Margin (NIM) Outlook

AMMB’s NIM for FY23 was recorded at 1.79%, with expectations for it to rise to 1.89% in FY24. Maybank IBG has forecasted the bank’s NIM to stabilize at 1.85% for FY24E and 1.88% for FY25E. This improvement is supported by favorable liquidity conditions, indicating AMMB’s focus on enhancing its margins while managing competitive pressures.

Earnings Growth and Profitability

AMMB is positioned for steady earnings growth with a projected net profit increase of 4.4% if NIMs return to pre-pandemic levels. This potential uplift in earnings could take net profit from MYR 1,985 million to MYR 2,073 million in FY25E. The bank’s profitability is expected to remain strong, with ROAE holding steady at 9.5% for both CY24E and CY25E.

Liquidity and Funding

AMMB benefits from an improving liquidity environment within Malaysia’s banking sector, which should help sustain its funding costs and stabilize margins. The bank’s ability to manage liquidity effectively is key to maintaining its competitive advantage in a challenging market.

Growth Potential

AMMB offers an attractive investment proposition with a 15% potential upside. Its ability to manage NIM improvements and maintain profitability makes it a solid performer in the banking sector. The combination of stable earnings growth and an attractive dividend yield further enhances its long-term appeal.

Risks and Challenges

AMMB, like other banks in Malaysia, faces intense competition in both the deposit and lending markets. However, the bank’s solid NIM recovery and stable profitability mitigate these risks, positioning it for continued success in the near future.

This information has been extracted from the Maybank Investment Bank Berhad report dated September 17, 2024.

Previous Post

ABMB Targets 7% Upside with Stable NIM and Consistent Dividend Yield

Next Post

&&HLFG Positioned for 18% Upside with Strong Profitability and Attractive Valuation&&

Market UpdatesSingapore SGX stocks

text Download Copy code 1Okay, here’s an attempt to create an SEO title and answer potential user questions based on the provided document: 2 3SEO title: 4SEO title: SATS Ltd (SATS SP): Embedded Resilience & FY26F Outlook – CGS International Analysis 5 6Analysis based on the document: 7 8Based on the document provided, here’s a summary of key points and potential user questions with answers: 9 10Key Points: 11 12* Company: SATS Ltd (SATS SP) 13* Recommendation: Reiterate Add 14* Analyst: TAY Wee Kuang and LIM Siew Khee, CGS International 15* Key Themes: Embedded resilience, cargo market share gains, FY26F outlook 16* Target Price: S\$3.60 17* ESG: Rated B- by LSEG 18 19Potential User Questions & Answers: 20 21Q: What is the overall recommendation for SATS Ltd? 22A: CGS International reiterates an “Add” recommendation for SATS Ltd. [[1]] 23 24Q: What is the target price for SATS Ltd, and who set it? 25A: The target price is S\$3.60, set by CGS International. [[1]] 26 27Q: What is the basis for the target price? 28A: The target price is DCF-based (Discounted Cash Flow), with a WACC of 12.2%. [[1]] 29 30Q: What are the key factors driving the “Add” recommendation? 31A: The key factor is SATS’s growing market share in cargo handling, which is expected to support earnings growth in FY26F, even with potential global cargo demand weakness. [[1]] 32 33Q: What is SATS’s ESG rating? 34A: SATS has an ESG combined score of B- by LSEG. [[1, 5]] 35 36Q: What were SATS’s 4QFY3/25 financial results? 37A: SATS reported a 4QFY3/25 net profit of S\$38.7m (+18.3% yoy). Revenue was S\$1.48bn (+10.4% yoy). [[1]] 38 39Q: What are the potential risks to SATS’s performance? 40A: Downside risks include margin compression from weaker operating leverage due to softening cargo volumes and a decline in the aviation travel industry due to an economic downturn. [[1]] 41 42Q: What is the dividend payout? 43A: SATS declared a final DPS of 3.5 Scts, bringing FY25 total DPS to 5.0 Scts, representing a payout ratio of 30.6%. [[1]] 44 45Q: What is the earnings growth outlook? 46A: The report anticipates a 3-year earnings CAGR of 15.0%. [[1]] 47 48Q: Has the analyst revised earnings estimates? 49A: Yes, FY26F-27F EPS estimates have been increased by 7.9-8.5%. FY28F estimates are introduced. [[1]] 50 51Q: What are the catalysts for a potential re-rating? 52A: Potential re-rating catalysts include an expanded footprint for cargo operations supporting new contract wins and a faster step-up in utilization of its new central kitchens across China and India. [[1]] 53 54Q: What is SATS’s market capitalization? 55A: The market cap is US\$3,444m / S\$4,428m. [[1]] 56 57Q: Who are the major shareholders of SATS? 58A: Temasek Holdings is a major shareholder, holding 40.4%. [[1]] 59 60Q: What is SATS’s revenue in Mar-25A? 61A: SATS’s revenue in Mar-25A is S\$5,821 million. [[1]] 62 63Q: What are the peers of SATS? 64A: Airports of Thailand is a peer. [[4]] 65 66Q: What is the forecast dividend yield for Mar-26F? 67A: The forecast dividend yield for Mar-26F is 1.85%. [[1]]

minichart

May 26, 2025

CGS International May 26, 2025 SATS Ltd: Embedded Resilience to Tide Through FY26F Key Takeaways from SATS Ltd’s 4QFY3/25 Performance SATS Ltd reported a 4QFY3/25 net profit of S\$38.7m, which is an 18.3% year-over-year...