Wednesday, May 2, 2012

Some snippets about Maybank


Recently, I received Maybank annual reports, it's a big change. Now no more thick and heavy book, unless you ask for it. It came with thin booklet and a CD. To my surprise, the CD came with CEO presentation, you can view something like “youtube” as the CEO talk to you at front and presenting the annual report. Compare to last year, where CD came with boring PDF file, now this is big improvement!

Maybank was my first investment when I was schooling at form six. In fact, last time I never did any homework. The reason I bought it last time was because it's the first bank I came to know, where I open my first Saving Account and the branch was near my house. Luckily I made the right choice, Maybank still exist today!

Today, I still make Maybank as my core investment, meaning about 30 to 40% of fund park at Maybank's share. After so many years' up and down, I learnt lesson how to handle the share with profit trading. The 1997 crisis and 2008 financial crisis, both sent Maybank's share price down by nearly 50% from the highest. The recent crisis in 2008 was most scary, the market value just gone by 50% in few weeks time. That time, I still remember, almost all news paper advised investor sell Maybank and many brokers gave target price of below RM3.00! The news of Maybank bought Indonesia BII (Bank International Indonesia), they need money for the purchase, so Maybank came out Right Issue at RM2.75. After the announcement, Maybank's share drop by 10%, 20%, 40% and more, people think Maybank had over paid for the deal. I am not sure how many dare to buy Maybank's share at that time! I advised friends buy Maybank stock and keep for long term, but I came to know later that nobody actually interest to buy at that time. 

Today, Maybank is trading at the range of RM8.65 to RM9.00! Many might not know Maybank is still forming up trend movement. It gave dividend of 60 cents last year, with RM8.65, it's about 6.91%. I think people still willing to pay for RM10.10 a share which translate to 5.94%, is quite reasonable. (but again, I will wait for next financial crisis to buy more, now not in any hurry to buy it)

When one calculate the PE ratio, with earning per share of 68 cent, 14 times is about RM9.52. RM10.10 is about 15 times PE.

From the earning side, Maybank's profit grow by 8% annually, last year, a big surprise! As the profit grow by nearly 20%. Thanks for the re branding exercise and purchase of Kim Eng. Now, the "Tiger" grows with "wings", it can fly higher and further.

However, I don't think it will repeat the same growth as of last year. Assume it can't grow and with flag earning for the next few years, with dividend policy of 40 to 60%, one can easily beat the bank's FD rate if buy Maybank whenever the price go down. Also, Maybank reward the share holder handsomely by providing Dividend Reinvestment Plan. Just imagine how nice if you can buy Maybank with 10% discount to current market price. This enable investor to accumulate Maybank's share at RM8.00 when the current market price is RM8.80!

Maybank don't pay me to promote the stock, this is just to share with all how to take investment from business point of view and make huge potential return! 
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4 comments:

  1. Hi Vincent,
    Can you share more experience about how you look for one stock and annual report skill?

    ReplyDelete
  2. Sonic,
    Actually, you just need to read 3 reports in annual report. You may refer to "Fundamental Analysis" at the left column of my blog for simple points. For each stock, just come out with your own check list, similar to the one "Investment Check List" where you can find from this blog. However, one kind of rice feed different kind of people, my investment objective might not suitable for you, hence, always build one that fix to your investment style.

    ReplyDelete
  3. Any idea when maybank price will shoot up again.. Got some price about 8.70..

    ReplyDelete
  4. Hi Vincent,

    My remisier has retired- he was not market savvy in my opinion. I am looking for a more knowledgeable one. I had wrote an email to you. If you didn't receive, pls write to me at infopurplepumpkin@gmail.com, TQ.

    I am looking at Maybank at present @RM 7.62, what do you think?

    ReplyDelete

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