Bursa Malaysia Bhd (Feb 10, RM7.60)
Revise target price to RM6 from RM5.20: Net profit for 4QFY11 of RM31 million took FY11 earnings to RM146 million, within our and consensus expectations.
Net profit grew 29% year-on-year (y-o-y) led by higher revenues from securities (15%), derivatives (36%) and “stable revenue” (9%). Average daily turnover volume and value rose to 1.3 billion (35%) and RM1.7 billion (23%), but velocity was flat at 33%.
Average daily contracts for derivatives grew 39% on stronger foreign and domestic participation. Stable revenue was lifted by higher listing fees (larger listing market cap and structured warrants) although the number of initial public offerings was similar (28 against 29 in FY10).
Operating expenses rose 9%, but excluding Globex fees, expenses only rose 4%. Bursa declared a final 13 sen dividend per share in 4QFY11, taking FY11 DPS to 26 sen, equivalent to 95% payout (we assumed 90%).
The stronger than expected trading momentum in January and February this year (up to Feb 8, average daily turnover volume and value reached highs of 1.9 billion and RM1.8 billion) prompted us to tweak our FY12/FY13F average daily turnover volume and value assumptions to 1.1 billion to 1.2 billion (from one billion to 1.1billion) and RM1.5 billion to RM1.6 billion (from RM1.3 billion to RM1.5 billion), respectively.
Consequently, we raise our FY12/FY13F earnings per share by 8%. However, the sustainability of trading momentum remains the key.
Our RM6 target price is based on the dividend discount model and assumes 92% dividend payout (from 90% previously), 7% long-term growth (from 6% previously) and 11% cost of equity. Our target price implies 22 times FY12 earnings per share. — HwangDBS Vickers Research, Feb 10
This article appeared in The Edge Financial Daily, February 13, 2012.
Revise target price to RM6 from RM5.20: Net profit for 4QFY11 of RM31 million took FY11 earnings to RM146 million, within our and consensus expectations.
Net profit grew 29% year-on-year (y-o-y) led by higher revenues from securities (15%), derivatives (36%) and “stable revenue” (9%). Average daily turnover volume and value rose to 1.3 billion (35%) and RM1.7 billion (23%), but velocity was flat at 33%.
Average daily contracts for derivatives grew 39% on stronger foreign and domestic participation. Stable revenue was lifted by higher listing fees (larger listing market cap and structured warrants) although the number of initial public offerings was similar (28 against 29 in FY10).
Operating expenses rose 9%, but excluding Globex fees, expenses only rose 4%. Bursa declared a final 13 sen dividend per share in 4QFY11, taking FY11 DPS to 26 sen, equivalent to 95% payout (we assumed 90%).
The stronger than expected trading momentum in January and February this year (up to Feb 8, average daily turnover volume and value reached highs of 1.9 billion and RM1.8 billion) prompted us to tweak our FY12/FY13F average daily turnover volume and value assumptions to 1.1 billion to 1.2 billion (from one billion to 1.1billion) and RM1.5 billion to RM1.6 billion (from RM1.3 billion to RM1.5 billion), respectively.
Consequently, we raise our FY12/FY13F earnings per share by 8%. However, the sustainability of trading momentum remains the key.
Our RM6 target price is based on the dividend discount model and assumes 92% dividend payout (from 90% previously), 7% long-term growth (from 6% previously) and 11% cost of equity. Our target price implies 22 times FY12 earnings per share. — HwangDBS Vickers Research, Feb 10
This article appeared in The Edge Financial Daily, February 13, 2012.
