Stock Focus Analysts optimistic on Maybank after stronger FY13 results

by **Cals** Fri 28 Feb 2014, 14:26

Stock Focus Analysts optimistic on Maybank after stronger FY13 results

Business & Markets 2014

Written by Jonathan Gan of theedgemalaysia.com

Friday, 28 February 2014 10:55

KUALA LUMPUR (Feb 28): Analysts are optimistic on Malayan Banking Bhd (Maybank) following its stronger financial results and higher-than-expected dividend.

Yesterday, Maybank reported an 18.6% rise in fourth quarter net profit from a year earlier on higher Islamic banking and non-interest income.

Net profit rose to RM1.73 billion in the fourth quarter ended December 31, 2013 (4QFY13) from RM1.46 billion. Revenue rose to RM8.27 billion from RM7.8 billion.

Full-year net profit increased to RM6.55 billion from RM5.75 billion a year earlier. Revenue was higher at RM33.25 billion versus RM31.23 billion.

Maybank plans to pay a dividend of 31 sen a share for 4QFY13.

Maybank's stronger financials have invited analysts' upgrades.

RHB Research Institute Sdn Bhd maintained its “buy” rating on Maybank shares with a higher target price (TP) of RM11.70. This compares with RM11.40 previously, according to RHB analyst David Chong.

In a note today, Chong said RHB had also raised its FY14 net profit forecast for Maybank by 2%. At 10:24am, Maybank shares rose three sen or 0.31% to RM9.73.

Chong also expressed surprise over Maybank's higher-than-expected final dividend.

“Maybank declared a higher-than-expected final net dividend per share of 31 sen vs. our 28.5 sen expectation," Chong said.

Meanwhile, HwangDBS Vickers Research Sdn Bhd maintained its “buy” rating on Maybank shares with a TP of RM11.80.

In a note today, HwangDBS said it expected Maybank's dividend payout ratio to remain high.

“We expect dividend payout ratio to remain high (our assumption is 70%) as management continues to manage capital with the dividend reinvestment plan (DRP)

"In our forecasts, we have imputed return on equity (ROE) dilution arising from the DRP,” HwangDBS.

HwangDBS said Maybank's 4QFY13 net profit was in line with HwangDBS' forecast.

RHB's Chong said Maybank's FY13 results were "slighly ahead" of RHB's and consensus estimates.