Coastal Contracts secures sales of RM268m for 12 vessels

Coastal Contracts secures sales of RM268m for 12 vessels
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 09 February 2011 18:57


KUALA LUMPUR: COASTAL CONTRACTS BHD [] said its units have secured contracts for the sale of 12 vessels for an aggregate value of RM268 million, increasing its total sales to RM760 million up to 2012.

It said on Wednesday, Feb 9 its units Coastal Offshore (Labuan) Pte Ltd, Pleasant Engineering Sdn Bhd and Thaumas Marine Ltd had secured contracts for the sale of seven offshore support vessels (OSV), three tugboats and two oil barges for an aggregate value of approximately RM268 million.

Coastal contacts executive chairman Ng Chin Heng said these latest contracts would be the largest vessel sale orders for Coastal Group since December 2009 and would significantly replenish its vessel sales order book.

“Including the new contracts, Coastal Group now has about RM760 million worth of vessel sales orders awaiting delivery to customers up to 2012,” the company said.

Coastal Contracts said the revenue stream from the latest contracts were expected to contribute positively to the earnings per share and net assets per share of group for the financial years ending Dec 31, 2011 and 2012.

The company said of the seven OSV sales, six units were purchased by Tidewater Group -- the world’s largest and most experienced provider of marine support services for the offshore energy industry.

It added Tidewater, which is listed on the New York Stock Exchange, owns 384 vessels, and is the world’s largest fleet of vessels serving the global offshore energy industry.

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Coastal Group vessel sales of RM268m
Published: 2011/02/09


COASTAL Contracts Bhd's three units have collectively secured contracts for the sale of seven offshore support vessels, three tugboats and two oil barges worth RM268 million.

Including the new contracts, Coastal Group now has about RM760 million worth of vessel sales orders awaiting delivery to customers up to 2012, it said.

The revenue stream from the latest contracts is expected to contribute positively to the earnings per share and net assets per share of Coastal Group for the financial years ending Dec 31, 2011 and 2012, it said in a statement.

The wholly-owned subsidiaries that secured the new contract are Coastal Offshore (Labuan) Pte Ltd, Pleasant Engineering Sdn Bhd and Thaumas Marine Ltd.

The latest contracts will be the largest vessel sale orders for Coastal Group since December 2009, and will significantly replenish our vessel sales orderbook, its executive chairman Ng Chin Heng said.

Of the seven OSV sales secured by Coastal Group, six units were purchased by Tidewater Group, which is the world’s largest and most experienced provider of marine support services for the offshore energy industry.

The other unit of OSV was sold to Swiber Group, which offers a full range of offshore engineering, procurement, construction, installation and commissioning and marine support services to support the entire spectrum of offshore oil and gas exploration projects.

"We are pleased that Coastal Group was able to capitalise on the recovery in the shipbuilding sector by securing these contract wins from existing as well as new customers," he said.

Moving forward, he said, greater emphasis would be placed on building larger deepwatersuited and dynamic-positioning enabled vessels as Coastal Group seeks to broaden its product offering and scale up shipbuilding value chain.

Regionally, demand for OSV services would increase, especially in Malaysia, Indonesia and Vietnam, as more new oil and gas exploration activities are expected to take place in coming years, said Ng.

With the gradually improving world economic outlook, this will lead to increasing demand for oil and gas and increased production spending by oil majors.

"As structural demand for oil and gas from emerging economies continues to grow, investments in exploration and development activities are expected to increase.

"Paired with rising prices for crude oil, the resultant demand for OSV is expected to remain firm," he added. -- BERNAMA

Read more: Coastal Group vessel sales of RM268m http://www.btimes.com.my/Current_News/BTIMES/articles/20110209201750/Article/index_html#ixzz1DTbZSMh9

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Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Profit Margin %
19-Nov-10		31-Dec-10		3	30-Sep-10		192,091		53,634		14.80		27.92%
24-Aug-10		31-Dec-10		2	30-Jun-10		138,619		48,275		13.32		34.83%
25-May-10		31-Dec-10		1	31-Mar-10		141,142		43,306		11.95		30.68%
22-Feb-10		31-Dec-09		4	31-Dec-09		150,901		54,030		14.97		35.80%

ttm-Revenue = 622.753m
ttm-Earnings = 199.245m
Net Profit Margin = 199.245 / 622.753 = 32%


ttm-EPS = 55.04 sen
Price (9.2.2010) MR 2.38
ttm-PE = 4.3 x




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Including the new contracts, Coastal Group now has about RM760 million worth of vessel sales orders awaiting delivery to customers up to 2012, it said.


Over the next 2 years or 8 quarters, the sales in the orders book = RM 760m (or RM 380m per year or RM 95m per quarter).

Assuming the profit margin is 32%, its net earnings for the next 2 years or 8 quarters = RM 243.2m (or RM  121.6m per year or RM 30.4m per quarter).

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Current Price (2/2/2011): 2.39
(Figures in Malaysian Ringgits)

Recent Stock Performance:
1 Week 0.4%
4 Weeks 6.7%
13 Week 0.8%
52 Weeks 19.5%

Coastal Contracts Bhd Key Data:

2009 Sales 466,058,353
Employees: 420

Market Cap: RM  866.260 m
Shares Outstanding: 362,452,000
Closely Held Shares: 252,641,000

Growth versus Value: Why invest unless you see value?

Growth companies are those that are growing sales and earnings every year.

Value companies are trading at low prices.  These low prices are usually the result of tough times at the company but occasionally just because the market's a weird place.

Often, the best growth investments are smaller companies.

The best value plays are usually large companies.  Not always, but most of the time.


Here are some examples (retrospectively):


Growth companies:  Topglove, Hartalega, Kossan, KNM, Hai-O, Coastal, Latexx, Nestle, Petdag, PPB, etc.


The PEs of growth companies tend to fluctuate hugely.  When the growth slowed or the companies hit a rough patch, the shares of growth companies can fall by a large amount.  Can you spot these companies in the early stages of their growth paths?


Value companies:  Maybank, PBB, LPI, DLady, Guinness, Sime, APM, etc.


Large good companies were selling at bargain prices during the recent global financial crisis in 2008/2009. These companies are "safe" to buy during these periods when they are undervalued.  They usually will rebound during recovery of the market.  Some companies met some headwind or rough patch during their financial year and their share prices were sold down hugely, offering bargain prices for the savvy investors.  Did you spot the values in these times in these stocks?  Did you seize these opportunities or were you seized by fear of loss and the unknown?


The division between growth and value companies is not always clear-cut.  Many can also be classified as stocks that have business growth selling at reasonable prices (GARP).


Another phenomenon to note is that investors tend to invest into value companies when they also starting to show some growth in their business.  Similarly, investors buy into growth companies at the point when they are starting to show some value.  :-)


Therefore, growth and value investings are basically two sides of the same coin.  They are joined at the hip, according to Buffett.  Above all else, why invest unless you see value in either?

OSK Research ups Hartalega TP to RM7.40

OSK Research ups Hartalega TP to RM7.40
Written by theedgemalaysia.com
Tuesday, 08 February 2011 09:29


KUALA LUMPUR: OSK Research said Hartalega’s 9MFY11 results were within expectations, which it believed were contributed by its higher-end product mix comprising 80% nitrile gloves.

In its research report issued on Tuesday, Feb 8, it said these gloves are mostly sold to big healthcare MNCs which mostly place constant orders that do not fluctuate significantly even during a pandemic.

“Based on the encouraging numbers, we are upgrading our FY11-12 earnings by 3%-8%. We continue to like the company’s market leadership in the nitrile gloves market. Maintain Buy but with a higher target price of RM7.40,” OSK Research said.

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Hartalega 3Q earnings up 32.1% to RM49.2m
Written by Joseph Chin of theedgemalaysia.com
Monday, 07 February 2011 18:59


KUALA LUMPUR: HARTALEGA HOLDINGS BHD []’s earnings rose 32.1% to RM49.20 million in the third quarter ended Dec 31, 2010 compared with RM37.2 0 million a year ago.

It said on Monday, Feb 7 revenue rose 26.5% to RM188.12 million from RM148.59 million while pre-tax profit increased by 31% to RM62.21 million from RM47.47 million. Earnings per share were 13.54 sen versus 10.23 sen. It declared an interim dividend of five sen.

“The significant achievement in revenue and profit before tax is in line with the group’s continuous expansion in production capacity, increase in demand, effective cost control and improvement in production processes,” it said.

Hartalega said its group’s products were sold to the healthcare industry. It added glove consumption was inelastic in the medical environment because the usage of glove is mandatory for disease control.

“Our nitrile synthetic glove was well accepted by the end users due to its high quality and elastic PROPERTIES [] that mimic that of a natural rubber glove. Our protein free and competitive priced nitrile glove has made it more affordable for the acute healthcare industry to continue switching from the natural rubber to our synthetic nitrile glove to avoid the protein allergy problem,” it said.

Hartalega had also commissioned three more new advanced high capacity glove production lines for the current quarter ended Dec 31, 2010, the last production line from Plant 5 was commissioned in January 2011.

Public Bank still ahead of the pack

Public Bank still ahead of the pack


Written by Financial Daily
Monday, 07 February 2011 11:39

Public Bank Bhd
(Feb 2, RM13.44)
Maintain buy at RM13.65 with target price RM14.20: Public Bank reported an FY10 earnings growth of 24.7% year-on-year (y-o-y) and a 4QFY10 quarter-on-quarter (q-o-q) growth of 8%, the highest sequential growth in FY10, further cementing the group’s share of domestic market leading loans, core customer deposits and private unit trust at 16.2%, 16% and 43.3% respectively.

The group’s FY10 results were spot on with our full-year estimates but slightly ahead of consensus, representing 99.6% and 104.8% of our and consensus full-year forecast respectively. The results are commendable as the group continued to register above industry growth rates, which translate into a one percentage point improvement in return on equity (ROE) to a record 27.1% despite the competitive domestic banking landscape, which has put immense pressure on industry wide retail lending yields and upward pressure on deposit rates in general.

Growth was broad based across all key operating lines. Net interest income jumped 13.9% y-o-y on a relatively robust loans growth of 13.8%, which was more than sufficient to offset the slight 10 basis points contraction in net interest margins. Non-interest income expanded by 18.7% on: i) higher unit trust management fees (up 29.7% y-o-y) due to expansion in assets under management, ii) a 45.7% surge in forex income, and iii) a 18.1% increase in transactional fee income. Meanwhile, profit before tax from its overseas operations expanded by 30% largely on the back of lower credit costs on improving non-performing loans. Asset quality remained solid, with gross impaired loans ratio declining to 1.1% from 1.4% while coverage ratios hit 142%.

We have raised our FY11 and FY12 earnings by 2.9% and 3.7% respectively, taking into account the stronger fee-based income growth from its bancassuarce business. Consequently, our ROE is raised marginally to 26.3% from 26% and our target price from RM14.20 to RM14.40. Maintain buy. — OSK Investment Research, Feb 2


This article appeared in The Edge Financial Daily, February 7, 2011.

Latexx continues to see strong performance in its business for the remaining quarter of the year

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Prof. Marg %
10-Nov-10		31-Dec-10		3	30-Sep-10		129,878		17,625		8.19		13.6%
06-Aug-10		31-Dec-10		2	30-Jun-10		134,483		21,551		10.01#		16..0%
03-May-10		31-Dec-10		1	31-Mar-10		126,171		20,715		9.63#		16.4%
02-Nov-09		31-Dec-09		3	30-Sep-09		80,839		14,274		6.63#		17.7%

#Basic EPS adjusted for capital changes


9M 2010  (unaudited)
Revenue 390.532m
Earnings 59.891m
Profit Margin = 59.891 / 390.532 = 15.3%


Estimated 12M 2010
Estimated Revenue = 390.532 x (4/3) = 520.71m
Estimated Profit Margin = 14%
Estimated Earnings = 14% x 520.71m = 72.90m


Navis is offering 852.03m to take the whole business private.
At this offer price, the PE = 852.03 / 72.90 = 11.7 x




30.9.2010
Total Equity  233.895m
P/B = 852.03 / 233.895 = 3.64 x
(Net Asset Value per share = 1.0700)


Cash and bank balances 54.614m
Long term borrowings 18.536m
Short term borrowings 18.783m
Current portion of long-term borrowings 3.551m
Hire purchase/lease creditors 14.300m
Net Cash =   -0.556m



Current Assets 172.342m
Current Liabilities 107.024m
Current Ratio 1.61 x


Cash Flow Statement
Net CFO 55.627m
CFI (9.915m)
FCF 45.712m

Outlook

In summary, we strongly believe that with the company’s ability to pass-on costs to customers, coupled with our strategies to focus on the premium segments in both nitrile and natural rubber, we are able to cope with the temporary headwinds and move on to advance our market presence. The Group continues to see a strong performance in its business for the remaining quarter of the year.  The Board expects the demand for the Group’s products and services to improve further in the fourth quarter and the business of the Group for the remaining period to the end of the financial year to remain strong. Nevertheless, Latexx will continuously strive to produce the highest quality of gloves through the adoption of the latest techniques, technology and to train and motivate our employees for the enhancement of efficiency and productivity and pursue to be caring organization through our commitment to the well being of environment and community. 

	Current Quarter 3 months ended 30.09.10
Weighted average number of ordinary  shares in issue (‘000)	215,095
Effects of dilutive potential ordinary shares on conversion of warrants (‘000)	44,611
Adjusted weighted average number of ordinary shares in issue and issuable (‘000)	259,706

Latexx Partners says Navis has sufficient funds for takeover

Latexx Partners says Navis has sufficient funds for takeover
Written by Joseph Chin of theedgemalaysia.com
Wednesday, 02 February 2011 08:49


KUALA LUMPUR: LATEXX PARTNERS BHD [], which received a takeover offer from Navis Asia VI Management Company Ltd, has vouched that the fund management’s RM852.03 million offer would not fail as it has sufficient resources.

In reply to a query from Bursa Malaysia, Latexx said on Wednesday, Feb 2 that Navis confirmed that it had sufficient financial resources to undertake the acquisition as it currently has over US$3 billion in capital under management and had sufficient unutilised funds for the acquisition.

On Monday, Navis Asia offered RM852.03 million to acquire all of Latexx’s assets and liabilities for RM852.03 million or RM3.10 per share, which was 30 sen above the last traded price of RM2.80.

Latexx also said the takeover was in the best interest of of the company as the offer price was a premium of about 20% over the pre-disturbance closing price of RM2.58 per share (that is closing market price on Jan 26) and about 19.7% over the five-day volume weighted average market price up to Jan 26.

“The offer price represents a premium of approximately 189% over the unaudited consolidated net assets per share of the company as at Sept 30, 2010 of RM1.07 and a premium of approximately 260% over the audited consolidated net assets per share of the company as at Dec 31, 2009 of 86 sen,” it said.

Latexx added the acquiror’s track record reflected their ability to grow the business after the acquisition.

“After having considered the factors above, the board believes that the disposal is in the best interest of Latexx. The board will be appointing a principal adviser and an independent adviser to advise the shareholders on the fairness and reasonableness of the proposal,” it said.

It added the board does not intend to maintain the listing status of Latexx and the company will be delisted after the distribution of the cash and/or securities to shareholders and warrantholders.

Discerning Growth from Value

Growth versus Value Stocks

Growth companies are those that are growing sales and earnings every year. Their stock prices are rsing, their profit margins are big, and their expectations are high.

Value companies are trading at low prices (relative to their intrinsic values). The low prices are usually the result of tough times at the company but occasionally just because the market is a weird place. Preferably, you buy a value stock just when it has fixed its troubles and begins to profit again, or just before the market discovers its discount price.

Often the best growth investments are smaller companies. Of particular importance in evaluating growth companies are high earnings record, high relative strength and low price-to-sales ratios. O'Shaughnessy found price-to-sales a great measure to mix with traditional growth yardsticks because it keeps growth investors from getting too carried away with emotion and paying too much for a stock.

The best value plays are usually large companies. Not always, but most of the time. Large companies don't change much and that makes them prime candidates for bargain pricing. They are not going anywhere, after all, so they have no choice but to recover from whatever trouble they're in. For such companies, traditional value measures will be your focus. Those are dividend yield, P/E, price-to-book, and price-to-sales.

Cocoa windfall for Guan Chong

Cocoa windfall for Guan Chong
Tags: Cocoa prices | Guan Chong Bhd

Written by Daniel Khoo
Thursday, 27 January 2011 11:53


KUALA LUMPUR: The recent sharp rise in cocoa prices has brought a windfall for Guan Chong Bhd, which had earlier stocked up on the soft commodity at substantially lower prices.

The company’s profit margin has already widened substantially to 6.7% for the nine-month period ended September 30, 2010, from 1.8% in the previous corresponding period.

For nine-month period, Guan Chong’s revenue nearly doubled to RM836.3 million from RM424.8 million. Net profit soared more than seven-fold to RM56.17 million from RM7.66 million in the same period a year ago.

“We try to sustain profit margins of about 5% to 7% and sustain that no matter how high or low cocoa prices might go ” Guan Chong CEO Brandon Tay told The Edge Financial Daily yesterday.

Johor Baru-based Guan Chong is an upstream cocoa processor that converts raw cocoa beans into semi-complete ingredients like cocoa butter, cocoa cake and cocoa powder.

The company obtains its cocoa bean supply from Indonesia, Papua New Guinea, Ghana, Ivory Coast and Nigeria.

Tay said high cocoa prices are good for the company since it could always pass on the cost increase to its customers by quoting higher selling prices.

“Our prospects are good moving forward. Sales have indeed been great,” Tay added.

“You see, whether at high or low prices, the big boys have to buy cocoa from middleman like us. Once we use our supplies, we immediately hedge it on the futures market to replenish the stock for the coming already kept this [increasing raw material costs] in mind when making their orders,” he explains.

Cocoa prices shot up early this month due to political tension in Ivory Coast, where a disputed election has left the country with two rival presidents.

A one-month ban on cocoa exports from Ivory Coast, the world’s biggest cocoa producer, has added more upward pressure on prices. Cocoa prices rose to US$3,366 a tonne yesterday, from US$2,745 in late August last year.

Commodity analysts quoted by news agencies say that prices might even soar to the US$3700-level, the highest since 1979, should the supply of cocoa get even tighter.

On Bursa Malaysia, Guan Chong’s share price has climbed in tandem with the rise of cocoa prices. The stock surged to a record high of RM2.72 yesterday, up 51% from RM1.80 in mid-December. Analysts say the company’s improved financial performance could be attributed to the large stocks of raw cocoa beans it keeps in storage, which is now worth much more based on current prices.

Its balance sheet as at Sept 30, 2010, shows the company’s inventory has been reduced to RM165.29 million from RM229.98 million a year ago. According to Tay, 80% of the company’s inventory is in raw material.

In fact, escalating cocoa prices and its high inventory level have come in handy for the company in obtaining loans. Its gearing is currently at 1.21 times, based on long- and short-term borrowings at RM180.52 million and total equity of RM149.11 million.

“I know some analysts may not like it, but our company can afford to increase our gearing because our inventory mostly consists of cocoa beans,” Tay says.

Earlier, Tay had indiated that Guan Chong intended to sell some of its raw material stock to fund its second bean-grinding factory, on Batam Island, Indonesia.

“We have completed the first phase of the factory. If we run full capacity in the first phase, it will increase our capacity to 130,000 tonnes from 80,000 presently,” Tay says.

“We will complete the second phase of the factory by the end of this year. The second phase of the factory will add 60,000 tonnes to our capacity,” he adds.

Despite the threat of cocoa bean shortage due to the political unrest in Ivory Coast, Tay remains confident that it will not be a major problem for the company.

“Well, you know, every year they fight. They will eventually find a way to bring out the beans. They will somehow smuggle out from Ivory Coast into neighbouring countries such as Ghana, which will then delive to the rest of the world,” says Tay.

“So, we actually don’t really have to worry about the supply of cocoa beans,” he adds.


This article appeared in The Edge Financial Daily, January 27, 2011.

Public Bank Berhad - To Sell, Buy or Hold?

FYE 2010

EPS 87.18 sen

PRICE RM 13.40

PE 15.4 x

Investment Policies (Based on Benjamin Graham)
Summary of Investment Policies

A. INVESTMENT FOR FIXED INCOME:
US Savings Bonds (FDs or Amanah Sahams for Malaysians)

B. INVESTMENT FOR INCOME, MODERATE LONG-TERM APPRECIATION AND PROTECTION AGAINST INFLATION:
(1) INVESTMENT FUNDS bought at reasonable price.
(2) Diversified list of primary common stocks (BLUE CHIPS) bought at reasonable price.

C. INVESTMENT CHIEFLY FOR PROFIT: 4 approaches are open to both the small and the large investors:
(1) Representative common stocks bought when the MARKET level is clearly LOW.
(2) GROWTH STOCKS, when these can be obtained at reasonable prices in relation to actual accomplishment – GROWTH INVESTING.
(3) Purchase of securities selling well BELOW INTRINSIC VALUE – VALUE INVESTING.
(4) Purchase of WELL-SECURED PRIVILEGED SENIOR ISSUES (bonds and preferred shares).
(5) SPECIAL SITUATIONS: Mergers, arbitrages, cash pay-outs.

D. SPECULATION:
(1) Buying stock in new or virtually new ventures (IPOs) .
(2) TRADING in the market.
(3) Purchase of "GROWTH STOCKS" at GENEROUS PRICES.

My buying prices.
03-Apr-07      8.75
24-Apr-07      9.25
05-Jul-07        9.7
15-Aug-07      9.5
15-Aug-07      9.5
22-Aug-07      8.75
28-Aug-07      9.35
25-Sep-07      9.55
28-Jan-08     10.7
11-Jun-09       8.95
12-Oct-09    10.52
12-Oct-09    10.48

There are only a few occasions to buy this stock at bargain prices.  Often it is trading at fair or high valuations.
A great company is a bad investment if you overpay to own it.

Where is the value of this stock to the investor?  If you can buy this stock when it is trading at fair price or at bargain prices, the value in this stock is in its earnings growth.  Hopefully, this will continues to be sustainable and good for the coming years as it had been excellent in the past years.  Even in owning a great stock, there is some element of speculation! ;-)

Historical 

5 Yr PE 11.5 - 16.2

10 Yr PE 11.8 - 16.7

Signature PE = 14 x

Sell when price is > RM 18.31 

Buy when price is < RM 11.05

Stellar performance for Public Bank

Stellar performance for Public Bank
By Adeline Paul Raj
Published: 2011/01/26

Public Bank's net profit rises 21 per cent to a record last year and expects a similar magnitude of earnings growth this year

PUBLIC Bank Bhd (1295), the country's third largest lender, saw net profit rise by 21 per cent to a record last year and said it can probably maintain a similar growth rate this year despite stiffer competition.

"Given the healthy economy that is expected for this year, we expect a similar magnitude of earnings growth can be achievable, barring unforeseen circumstances," its chief operating officer Leong Kwok Nyem told reporters at a financial results briefing yesterday afternoon.

The group, which expects the Malaysian economy to expand by as much as 6 per cent this year, is also targetting to maintain its annual return on equity (ROE) at 27 per cent in the next two to three years.

ROE, a measure of how well re-invested earnings are used to generate additional earnings, improved to 27.1 per cent last year from 26.1 per cent the year before.
The group's fourth quarter net profit last year rose by 25 per cent to RM846 million, its highest quarterly earnings ever.

This brought net profit for the full year to RM3.05 billion compared with RM2.52 billion in 2009. Revenue improved by 13.6 per cent to RM11 billion. The results came in within analysts' expectations.

Chairman Tan Sri Teh Hong Piow, in a press statement, said the improved performance last year was mainly due to better income from loans, and higher fees from businesses like unit trusts. It had also set aside less money to cover potential bad loans.

The group's earnings from overseas rose by 30 per cent, helped by a marked improvement in its Hong Kong operations.

It expects to achieve a lending growth of between 14 per cent and 15 per cent this year, after a 13.8 per cent growth to RM156.5 billion last year.

Public Bank, the market leader for consumer loans, may see a small contraction in net interest margins this year as rivals price loans more competitively, managing director Tan Sri Tay Ah Lek said.

He, however, expects the impact on the group's earnings to be mitigated by hikes in the Overnight Policy Rate that may come in the second half of the year.

Bank Negara Malaysia may raise the OPR, which stands at 2.75 per cent now, by between 25 and 50 basis points in the second half, he said.

Analyst Eileen Tan of Affin Securities expects the group's net profit to expand at a slower rate of 10 per cent this amid stronger competition and a moderating economy. Economic growth is widely expected to slow down from a possible 7 per cent growth last year.

Meanwhile, Leong ruled out merging with any other bank in Malaysia, saying the group's position remained strong.

"Our domestic loan growth grew by about 16 per cent last year, adding close to RM20 billion of loans to the balance sheet. That's almost the size of a small bank," he remarked.

The group will continue with its organic growth strategy at home and abroad, with plans this year to add three more branches each in Hong Kong and Shenzhen, as well as some in Cambodia.

Public Bank's overseas operations are set to account for a tenth of its net profit in two to three years' time compared with 8 per cent now, Tay said.

On dividends, the group declared a second interim cash dividend of 25 sen less tax and a single tier dividend of 8 sen.

This brings the total net dividend for 2010 to RM1.59 billion, or 52 per cent of the group's net profit for the year. It expects to maintain a payout ratio of between 50 per cent and 53 per cent this year, Leong said.

Its share price closed unchanged at RM13.34 yesterday.


Read more: Stellar performance for Public Bank http://www.btimes.com.my/Current_News/BTIMES/articles/pubby-2/Article/index_html#ixzz1CHKNK8T8


Public Bank: Buy, target price RM14.80
Published: 2011/01/28


Kenanga Research expects Public Bank Bhd's (1295) outlook for 2011 to remain positive as the bank is well positioned to meet the challenges of a rising interest rate, low duration bond book and least asset risks.


The research firm said the bank's management has started managing its interest rate risk with the aim of growing fees income by 30 per cent year-on-year in financial year 2011.

"We believe the driver of earnings growth has shifted to fee incomes, instead of interest incomes previously," Kenanga Research said in a research note yesterday.

Kenanga Research has upgraded its rating for Public Bank to "buy" from "hold" previously and raised the target price to RM14.80. - Bernama


Read more: Public Bank: Buy, target price RM14.80 http://www.btimes.com.my/Current_News/BTIMES/articles/panga/Article/index_html#ixzz1CHLQFuJ6