4Q14 review: Earnings beat estimate; Maintain Hold - Amazon Web ...
`
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
4Q14 review: Earnings beat estimate; Maintain Hold
Rating Summary Recommendation
Earnings beat consensus estimate: Bank AlBilad has reported 4Q14 net profit of SAR
Hold
Target price (SAR)
48.0
Upside/ (downside)
+8%
249mn (+5% qoq, and +17% yoy) that has beaten consensus by c.14%. Net income from investing and financing („NIIF‟) was SAR 269mn (+2% qoq & +7% yoy) while the estimated
Stock Details
quarterly NIIF Margin (calculated on Average Total Assets) contracted 8bps (after contracting
Closing price*
SAR
44.4
Market capitalization
SAR Mn
Shares outstanding
Mn
400
52-Week High
SAR
60.0
Volume growth remains strong; sound liquidity position: Besides the earnings beat,
52-Week Low
SAR
34.0
cues on the volume front are mostly positive. AlBilad‟s Net Financing Portfolio (NFP)
Price chg. (3 months)
%
-14.0
increased 21% yoy in 4Q (and c.3% qoq) while the Customer Deposits grew 26% yoy (and
EPS 2015E
c.0% qoq). However, while we highlight that the growth rate of net financing portfolio has
Ticker (Reuters/ Bloomberg)
somewhat slowed down in 4Q14 (NFP +30% yoy in 9M14 vs. +21% yoy in 4Q14),
* as of January 12, 2015
nevertheless, AlBilad‟s volume growth compares favourably to that of the system (Assets:
Key Shareholding (%)
+12%, Loans: +12%, Deposits: +13% yoy, as per SAMA data as of November 2014).
Mohammed Al-Subeaei & Sons Co. Abdullah Ibrahim Al-Subeaei Investment Co. Abdulrahman Saleh Abdulaziz Al Rajhi
30bps qoq in 3Q14) sequentially to 2.41%. While details are not disclosed at this stage, we attribute margin pressure to potentially aggressive pricing, a key risk to the equity story.
AlBilad‟s Net Financing/Customer Deposits ratio stood at c.77% as of 4Q14 (75% in 3Q14) and indicates that AlBilad has sufficient space to grow its financing portfolio. As per SAMA data, the group added 4 new branches, 12 new ATMs and 75 new POS terminals in the first
17,740
SAR 1140.SE
2.5 ALBI AB
18.5% 11.1% 8.4%
two months of 4Q 2014. Valuation seems close to full; trading at a premium to sector; Maintain Hold rating:
Valuation (at current price)
AlBilad‟s low cost funding base (demand deposits c.72% of total Customer Deposits vs. System: 62% as at end 3Q 2014) and adequately capitalized balance sheet (Tier I ratio of 15.6% as at end 3Q 2014) is supporting its aggressive lending strategy. However, potentially
2015e
2016e
P/E (x)
17.7
14.2
P/Pre-Provision Profit (x)
14.0
11.4
2.8
2.5
P/B (x)
aggressive pricing on the financing portfolio and its exposure to the building and construction sector (c.15% of performing financing portfolio) remain the key risks for the stock. Although,
Stock price movement vs. TASI
in the previous 3 months, AlBilad shares were down 14% vs. KSA Banks index (-11%) and
280
TASI (-17%), AlBilad currently trades at a 2015E P/B of 2.8x which is at a significant
260
premium to KSA/GCC peer group (KSA: 1.4x & GCC: 1.4x). All in all, although we like AlBilad‟s growth profile, we think at the current price, positives are largely priced in which leads us to maintain our Hold rating on the stock with a target price of SAR48.0/share (from
220 200 180 160
SAR50/share).
140 120
4Q14
Cons*
% Dev
3Q14
% qoq
Net Income from Investing and Financing
269
na
na
264
2%
250
7%
1,314
1,522
Net Profit
249
219
14%
237
5%
214
17%
1,000
1,249
Total Assets
45,230
na
na
44,062
3%
36,323
25%
50,036
57,561
Net Financing
28,355
na
na
27,521
3%
23,415
21%
33,303
38,704
Customer Deposits
36,724
na
na
36,803
0%
29,108
26%
41,217
47,811
SAR mn
240
4Q13
% Yoy
2015e
2016e
100 80 Jan-13
Jul-13 TASI
Sources: Tadawul, Company, Saudi Fransi Capital, *Bloomberg
Jan-14
Jul-14
Jan-15
Bank AlBilad
Sources: Tadawul and Saudi Fransi Capital
Sector Coverage Dipanjan Ray [email protected] +966-1-12826861 AbdulAziz Jawdat [email protected] +966-11-2826856
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
Recommendation Framework BUY: The analyst recommends a BUY when our fair value estimate is at least 10% higher than the current share price. HOLD: The analyst recommends a HOLD when our fair value estimate ranges within ±10% of the current share price. SELL: The analyst recommends a SELL when our fair value estimate is lower by more than 10% from the current share price.
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
Contacts RESEARCH & ADVISORY DEPARTMENT [email protected]
SAUDI FRANSI CAPITAL Call Centre 800-125-9999 Website www.sfc.sa
SAUDI FRANSI CAPITAL LLC C.R. 1010231217, PO Box 23454, Riyadh 11426, Saudi Arabia, Head Office Riyadh
Authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
Disclaimer This report is prepared by Saudi Fransi Capital (“SFC”), a fully-fledged investment firm providing investment banking, asset management, securities brokerage, research, and custody services. SFC, and its affiliate, might conduct business relationships with the company that is subject of this report and/ or own its security. This report is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. This report is intended for general information purposes only, and may not be reproduced or redistributed to any other person. This report is not intended as an offer or solicitation with respect to the purchase or sale of any security. This report is not intended to take into account any investment suitability needs of the recipient. In particular, this report is not customized to the specific investment objectives, financial situation, risk appetite or other needs of any person who may receive this report. SFC strongly advises every potential investor to seek professional legal, accounting and financial guidance when determining whether an investment in a security is appropriate to his or her needs. Any investment recommendations contained in this report take into account both risk and expected return. To the maximum extent permitted by applicable law and regulation, SFC shall not be liable for any loss that may arise from the use of this report or its contents or otherwise arising in connection therewith. Any financial projections, fair value estimates and statements regarding future prospects contained in this report may not be realized. All opinions and estimates included in this report constitute SFC‟s judgment as of the date of production of this report, and are subject to change without notice. Past performance of any investment is not indicative of future results. The value of securities, the income from them, the prices and currencies of securities, can go down as well as up. An investor may get back less than what he or she originally invested. Additionally, fees may apply on investments in securities. Changes in currency rates may have an adverse effect on the value, price or income of a security. No part of this report may be reproduced without the written permission of SFC. Neither this report nor any copy hereof may be distributed in any jurisdiction outside the Kingdom of Saudi Arabia where its distribution may be restricted by law. Persons who receive this report should make themselves aware of, and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
Saudi Fransi Capital LLC; C.R. 1010231217, P.O Box 23454, Riyadh 11426, Saudi Arabia, Head Office – Riyadh. Authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
4Q14 review: Earnings beat estimate; Maintain Hold
Rating Summary Recommendation
Earnings beat consensus estimate: Bank AlBilad has reported 4Q14 net profit of SAR
Hold
Target price (SAR)
48.0
Upside/ (downside)
+8%
249mn (+5% qoq, and +17% yoy) that has beaten consensus by c.14%. Net income from investing and financing („NIIF‟) was SAR 269mn (+2% qoq & +7% yoy) while the estimated
Stock Details
quarterly NIIF Margin (calculated on Average Total Assets) contracted 8bps (after contracting
Closing price*
SAR
44.4
Market capitalization
SAR Mn
Shares outstanding
Mn
400
52-Week High
SAR
60.0
Volume growth remains strong; sound liquidity position: Besides the earnings beat,
52-Week Low
SAR
34.0
cues on the volume front are mostly positive. AlBilad‟s Net Financing Portfolio (NFP)
Price chg. (3 months)
%
-14.0
increased 21% yoy in 4Q (and c.3% qoq) while the Customer Deposits grew 26% yoy (and
EPS 2015E
c.0% qoq). However, while we highlight that the growth rate of net financing portfolio has
Ticker (Reuters/ Bloomberg)
somewhat slowed down in 4Q14 (NFP +30% yoy in 9M14 vs. +21% yoy in 4Q14),
* as of January 12, 2015
nevertheless, AlBilad‟s volume growth compares favourably to that of the system (Assets:
Key Shareholding (%)
+12%, Loans: +12%, Deposits: +13% yoy, as per SAMA data as of November 2014).
Mohammed Al-Subeaei & Sons Co. Abdullah Ibrahim Al-Subeaei Investment Co. Abdulrahman Saleh Abdulaziz Al Rajhi
30bps qoq in 3Q14) sequentially to 2.41%. While details are not disclosed at this stage, we attribute margin pressure to potentially aggressive pricing, a key risk to the equity story.
AlBilad‟s Net Financing/Customer Deposits ratio stood at c.77% as of 4Q14 (75% in 3Q14) and indicates that AlBilad has sufficient space to grow its financing portfolio. As per SAMA data, the group added 4 new branches, 12 new ATMs and 75 new POS terminals in the first
17,740
SAR 1140.SE
2.5 ALBI AB
18.5% 11.1% 8.4%
two months of 4Q 2014. Valuation seems close to full; trading at a premium to sector; Maintain Hold rating:
Valuation (at current price)
AlBilad‟s low cost funding base (demand deposits c.72% of total Customer Deposits vs. System: 62% as at end 3Q 2014) and adequately capitalized balance sheet (Tier I ratio of 15.6% as at end 3Q 2014) is supporting its aggressive lending strategy. However, potentially
2015e
2016e
P/E (x)
17.7
14.2
P/Pre-Provision Profit (x)
14.0
11.4
2.8
2.5
P/B (x)
aggressive pricing on the financing portfolio and its exposure to the building and construction sector (c.15% of performing financing portfolio) remain the key risks for the stock. Although,
Stock price movement vs. TASI
in the previous 3 months, AlBilad shares were down 14% vs. KSA Banks index (-11%) and
280
TASI (-17%), AlBilad currently trades at a 2015E P/B of 2.8x which is at a significant
260
premium to KSA/GCC peer group (KSA: 1.4x & GCC: 1.4x). All in all, although we like AlBilad‟s growth profile, we think at the current price, positives are largely priced in which leads us to maintain our Hold rating on the stock with a target price of SAR48.0/share (from
220 200 180 160
SAR50/share).
140 120
4Q14
Cons*
% Dev
3Q14
% qoq
Net Income from Investing and Financing
269
na
na
264
2%
250
7%
1,314
1,522
Net Profit
249
219
14%
237
5%
214
17%
1,000
1,249
Total Assets
45,230
na
na
44,062
3%
36,323
25%
50,036
57,561
Net Financing
28,355
na
na
27,521
3%
23,415
21%
33,303
38,704
Customer Deposits
36,724
na
na
36,803
0%
29,108
26%
41,217
47,811
SAR mn
240
4Q13
% Yoy
2015e
2016e
100 80 Jan-13
Jul-13 TASI
Sources: Tadawul, Company, Saudi Fransi Capital, *Bloomberg
Jan-14
Jul-14
Jan-15
Bank AlBilad
Sources: Tadawul and Saudi Fransi Capital
Sector Coverage Dipanjan Ray [email protected] +966-1-12826861 AbdulAziz Jawdat [email protected] +966-11-2826856
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
Recommendation Framework BUY: The analyst recommends a BUY when our fair value estimate is at least 10% higher than the current share price. HOLD: The analyst recommends a HOLD when our fair value estimate ranges within ±10% of the current share price. SELL: The analyst recommends a SELL when our fair value estimate is lower by more than 10% from the current share price.
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
Contacts RESEARCH & ADVISORY DEPARTMENT [email protected]
SAUDI FRANSI CAPITAL Call Centre 800-125-9999 Website www.sfc.sa
SAUDI FRANSI CAPITAL LLC C.R. 1010231217, PO Box 23454, Riyadh 11426, Saudi Arabia, Head Office Riyadh
Authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Bank AlBilad Banks | 4Q 2014 Preliminary Results | January 13, 2015
Disclaimer This report is prepared by Saudi Fransi Capital (“SFC”), a fully-fledged investment firm providing investment banking, asset management, securities brokerage, research, and custody services. SFC, and its affiliate, might conduct business relationships with the company that is subject of this report and/ or own its security. This report is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. This report is intended for general information purposes only, and may not be reproduced or redistributed to any other person. This report is not intended as an offer or solicitation with respect to the purchase or sale of any security. This report is not intended to take into account any investment suitability needs of the recipient. In particular, this report is not customized to the specific investment objectives, financial situation, risk appetite or other needs of any person who may receive this report. SFC strongly advises every potential investor to seek professional legal, accounting and financial guidance when determining whether an investment in a security is appropriate to his or her needs. Any investment recommendations contained in this report take into account both risk and expected return. To the maximum extent permitted by applicable law and regulation, SFC shall not be liable for any loss that may arise from the use of this report or its contents or otherwise arising in connection therewith. Any financial projections, fair value estimates and statements regarding future prospects contained in this report may not be realized. All opinions and estimates included in this report constitute SFC‟s judgment as of the date of production of this report, and are subject to change without notice. Past performance of any investment is not indicative of future results. The value of securities, the income from them, the prices and currencies of securities, can go down as well as up. An investor may get back less than what he or she originally invested. Additionally, fees may apply on investments in securities. Changes in currency rates may have an adverse effect on the value, price or income of a security. No part of this report may be reproduced without the written permission of SFC. Neither this report nor any copy hereof may be distributed in any jurisdiction outside the Kingdom of Saudi Arabia where its distribution may be restricted by law. Persons who receive this report should make themselves aware of, and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
Saudi Fransi Capital LLC; C.R. 1010231217, P.O Box 23454, Riyadh 11426, Saudi Arabia, Head Office – Riyadh. Authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
Refer to important terms of use, disclaimers and disclosures on back page
Saudi Fransi Capital is authorized and regulated by the Capital Market Authority (CMA) License No. (11153-37)
