reports
- Rahul Shah
SBM Holdings: Lower forecasts on asset clean-up, Covid-19 provisioning
WE CUT OUR 2020 PROFIT FORECAST BY 80%, AND OUR TARGET PRICE BY 30% We see SBMH delivering MUR447mn net profit this year; the key delta is higher risk costs due to Mauritius’ vulnerabilities to the global slowdown. On our new MUR5.00 Target Price, the shares trade at 14x 2021f PE and 0.6x tangible PB, and 7x 2022 PE. ASSET CLEAN-UP MAY NOT HAVE RUN ITS COURSE Significant changes in the Board’s composition earlier this year (which saw more than half the members replaced, including the Chairma...
- Rahul Shah
Management update: momentum is building
Management comments support our positive outlook. After a difficult 2018 which saw two of the year’s interim dividends being cut, 9M 19 has been more stable. Management reiterated its view that FY 19 results should improve significantly yoy. With revenues likely to grow, the cost/ income ratio stabilising and risk costs likely to improve, we maintain our projections for strong earnings growth (20% CAGR in 2020-23), which should see ROTE rise towards 13% by 2023 (see Table ...
- Bhavik Desai
SBM Earnings Review CY16
Recommendation: BUY. We fair value SBM at Rs8.70 offering an upside potential of ~23% in coming months. We calculate SBM’s Rolling 12Mth recurrent EPS to stand at Rs0.89 (+44%) resulting in A deteriorated Price-to-Earnings Ratio (PER) of 7.9x against 7.4x on its Sep-16 12M EPS, But an improved Price-to-Book Value Ratio (PBV) of 0.76x against 0.78x on its Sep-16 NAV Earnings Before Impairments & Taxes (EBIT) for FY16 declined to Rs3.7bn (-7%) mainly as a result of increased Amortisation charg...
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