Avior Capital Markets - Coronation Fund Managers Limited (12AS) Coronation | Priced for outflows

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Avior Capital Markets

David Talpert ...

Harry Botha

Coronation | Priced for outflows

Coronation Fund Managers' (CML) FY â€˜18 result was in line with our expectation as earnings decreased by 3.8% to 420.7cps. Average AUM was 3.1% higher YoY. However, revenue declined by 1.8% due to lower performance fees and fee discounts. CML reported net outflows of R31bn. We expect further outflows as CML's funds have underperformed their benchmarks. Despite the outflows, we expect market returns to support AUM. We therefore expect muted earnings growth for the next two years. However, we believe CML is undervalued having sold off by 37% YTD and offering a 9% forward yield.

26/11/2018 14 EN

Underlying

Coronation Fund Managers Limited

Coronation Fund Managers is a third-party fund management companies. Co. is organized into three key segments: institutional, which manages institutional assets in South Africa in both segregated and pooled mandates; retail, which provides a range of funds distributed through the non-affiliated channels of independent financial advisors and linked investment service providers; and international, which is being managed from Cape Town and London. Co.'s customers include retirement funds, medical schemes and multi-manager companies in South Africa, banking and insurance groups, investment advisory businesses, independent financial advisors, individuals and direct unit trust accounts.

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ZAE000047353 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

David Talpert

Harry Botha

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Coronation | Priced for outflows

Avior Financials | Coronation | Peregrine | Repo rate cut | Investment Banking statistics

Coronation | A slow improvement in net flows

Coronation | At the mercy of the markets

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

SA Banks | Low credit risk in commercial property | Time to buy SA banks

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