May 4, 2011

Malaysia Building Society (MBSB) : A buy by AmResearch

BUY  Price: RM2.55 (Ex-rights price: RM1.90) Fair Value: RM3.00 (Ex-rights price: RM2.20)  4 May 2011


MBSB trades ex-rights and warrants today

  • Malaysia Building Society Bhd (MBSB) will trade ex-rights and warrants today. The entitlement date is 6 May 2011.
  • Commencement of trading of provisional allotment of the rights shares and warrants starts from 9 May 2011. The last day for the sale of provisional allotment of the rights shares and warrants is on 13 May 2011
  • The last day for receipt of acceptance of and applications for the rights and warrants is on 24 May 2011.
  • The company is targeting to list the rights and warrants in early June 2011.
  • MBSB is implementing the rights issue at RM1.00/rights share, on a five rights-for-every-seven shares basis.
  • In addition, there will be one free warrant for one rights share, with the warrant exercise price fixed at RM1.00 each. The warrants are immediately detachable from the rights. The warrants’ expiry date is five years from the date of issue and exercisable anytime during the period.
  • MBSB is expected to report its 1QFY11 results in the next two weeks. We believe there is a strong chance the annualized 1QFY11 will exceed our projected net earnings of RM195mil for FY11F. 
  • We believe MBSB has already disbursed quite a significant amount of personal loans to date. The total amount disbursed to-date is likely to be close to the 60% amount disbursed in FY10. Thus, even if we are to take into account repayments, we believe there is plenty of room to upgrade our loans projections later should the momentum continue.  We maintain our BUY rating with a fair value of RM3.00 on a cum-basis or ex-basis of RM2.20/share.


above: click to enlarge

Source :  AmResearch