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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » ANALYSIS OF GOOD BANKING STOCKS

ANALYSIS OF GOOD BANKING STOCKS

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21ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 12:13 am

mono


Vice President - Equity Analytics
Vice President - Equity Analytics
@SilverHawk wrote:
@Monster wrote:
@SilverHawk wrote:CDB can pass 150/= in short run.
If CDB able to produced same result in Q4 as they did in Q3,

Their EPS will be 10.2 and P/E will be 95.5/10.2 = 9.4 according to the current price level.
Backing sector PE is around 21, there for it’s extremely undervalued.
(Note that, this is my personal view and can be right or wrong)

They produced EPS 5.31 in 3Q. But most of the income has come from other income. The regular income didn't improve much. So, it's hardly unlikely they will produce the same EPS in Q4.


CDB 2010/11 Q1
NP: 34,564
EPS: 0.87 and growth compared to previous quarter 7.21%

CDB 2010/11 Q2
NP: 65,497
EPS: 1.65 and growth compared to 2010 Q1 89.45%

CDB 2010/11 Q3
NP: 210,699 (include 114,975 million market to market adjustment)
EPS: 5.31 (with market to market adjustment)
EPS: 2.41 (without market to market adjustment) and growth compared to 2010 Q2 46.19%

If they able to produced same Q3 results in Q4
Annualized EPS: 7.83 + 2.41 = 10.24

They are showing 50 million 'other income' even without the mark to market adjustment? if it's a regular income they should list it as such and tell us what it is. that way we won't have to guess.

If you look at the cash flow statement. they do have 55 million in commissions for the last 9 months and my guess is that figure can be fairly consistently maintained. but the 78 million 'other income' for the 9 months we cannot expect being repeated because in 2009/2010 they made only 19 million in 'other income' for 9 months. There is a good chance that these are one off capital gains that cannot be repeated.

they've also put down 15 million income from doubtful debt. that is definitely a one off adjustment that value should always be negative and around 10 million all things considered.

IMHO, you cannot expect anything remotely close to this performance in the next quarter they should have at least 10 million

22ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 1:13 am

SilverHawk


Equity Analytic
Equity Analytic
Yp. Good point. Very Happy

8 OTHER INCOME 2008
Dividend Income nil
Fees and Commission Income 127,682,448
Profit/(Loss) from sale of Dealing Securities nil
Profit/(Loss) from Disposal of Assets 14,552,534
Other Income from Micro Finance 11,400
TOTAL 142,246,382

8 OTHER INCOME 2009/10
Dividend Income 1,023,752
Fees and Commission Income 109,434,509
Profit/(Loss) from sale of Dealing Securities (3,819,047)
Profit/(Loss) from Disposal of Assets (2,558,947)
Other Income from Micro Finance nil
TOTAL 104,080,267


2008 other income AVG per quarter: 35,561
2009 other income AVG per quarter: 20,816

2010/11 Q1 Other income: 36,718
2010/11 Q2 Other income: 46,867
2010/11 Q3 Other income: 166,370 - 114,975 = 51,395 (market to market adjustment removed)

Seem to me, they have regular other income sources. Let me know, if I miss anything.

23ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 7:31 am

mono


Vice President - Equity Analytics
Vice President - Equity Analytics
@SilverHawk wrote:Yp. Good point. Very Happy

8 OTHER INCOME 2008
Dividend Income nil
Fees and Commission Income 127,682,448
Profit/(Loss) from sale of Dealing Securities nil
Profit/(Loss) from Disposal of Assets 14,552,534
Other Income from Micro Finance 11,400
TOTAL 142,246,382

8 OTHER INCOME 2009/10
Dividend Income 1,023,752
Fees and Commission Income 109,434,509
Profit/(Loss) from sale of Dealing Securities (3,819,047)
Profit/(Loss) from Disposal of Assets (2,558,947)
Other Income from Micro Finance nil
TOTAL 104,080,267


2008 other income AVG per quarter: 35,561
2009 other income AVG per quarter: 20,816

2010/11 Q1 Other income: 36,718
2010/11 Q2 Other income: 46,867
2010/11 Q3 Other income: 166,370 - 114,975 = 51,395 (market to market adjustment removed)

Seem to me, they have regular other income sources. Let me know, if I miss anything.

Yes they seem to have a steady stream of other income. Smile

but i'd be more confident if these people can disclose where this is coming from. are they investments? if so we need to look at CDB as a bit of an investment bank.

any ways good luck...

24ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 8:05 am

dhamm


Manager - Equity Analytics
Manager - Equity Analytics
@Monster wrote:LFIN is currently undervalued. Last nine month EPS is 17.76
If they can produce EPS 7 in this quarter, simply it can break 440/- with PER 18. But still it's trading at 285/-.

LFIN started to move few weeks back, but with the announcement of bonus issue(1:1), it became stagnated again. what do you all think about that? why investors taking bonus issue negatively?

25ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Banking and Finance Sat Feb 05, 2011 8:10 am

Soundchips


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Next financial results will give a clear indication to go ahead with B & F stox.

26ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 8:30 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
@dhamm wrote:
@Monster wrote:LFIN is currently undervalued. Last nine month EPS is 17.76
If they can produce EPS 7 in this quarter, simply it can break 440/- with PER 18. But still it's trading at 285/-.

LFIN started to move few weeks back, but with the announcement of bonus issue(1:1), it became stagnated again. what do you all think about that? why investors taking bonus issue negatively?

LFIN is a share which reached Rs 330 in the past. Yes then the bonus was issued market took is negatively. Think it is amatter of time since this goes up due to their stroing financials. If they declare EPS of RS 6 even ( consistent with last quarters) this will be worth around Rs 400 +- 10 %.

27ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 9:38 am

dulandesilva


Equity Analytic
Equity Analytic

It will also be important to keep an eye on CINV and LOLC also.

28ANALYSIS OF GOOD BANKING STOCKS - Page 2 Empty Re: ANALYSIS OF GOOD BANKING STOCKS Sat Feb 05, 2011 1:37 pm

dhamm


Manager - Equity Analytics
Manager - Equity Analytics
@slstock wrote:
@dhamm wrote:
@Monster wrote:LFIN is currently undervalued. Last nine month EPS is 17.76
If they can produce EPS 7 in this quarter, simply it can break 440/- with PER 18. But still it's trading at 285/-.

LFIN started to move few weeks back, but with the announcement of bonus issue(1:1), it became stagnated again. what do you all think about that? why investors taking bonus issue negatively?

LFIN is a share which reached Rs 330 in the past. Yes then the bonus was issued market took is negatively. Think it is amatter of time since this goes up due to their stroing financials. If they declare EPS of RS 6 even ( consistent with last quarters) this will be worth around Rs 400 +- 10 %.

LFIN quarter to quarter results:
profit EPS
Q22010 220m 6.36
Q12010 181m 5.23
Q42009 213m 6.17
Q32009 123m 3.56
Q22009 86m 2.5
Q12009 76m 2.21
Q42008 118m 3.60
Q32008 84m 2.43
Q22008 86 2.51

EPS for 2009/10 is 500m with EPS of 14.44. The profit for two qtrs of 2010/11 is 400m with EPS 11.59.

If we assume the last qtr EPS for Dec qtr as well ( it may be more than that), the trailin EPS is 6.17+5.23+6.36+6.36 = 24.12

with PER of 15, it should trade 24.12x15= 361. But with the quarter to quarter growth shown above its worth more than that. Guys, what do you think?

PS: FYI only. Do ur own study.

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