- Revenue increased by 6.95% while net profit increased by 9.9% (Well done to the management on the cost controlling).
- Interest income increased by 9.37% while interest expenses associates to revenue increased by 7.05% (might due to borrowing rate as bank negara lower the OPR).
- Director and staff salary increased by 7.05% which is in line with its increase in revenue.
- Allowance for impairment loss reduced by 25.5% (Improvement on the quality of loan).
- Net profit margin improved 37.39% from 36.38%.
- Its total assets decreased by 3.73% as compared to last year mainly due to a reduction in cash.
- Although the total assets decreased, its loans and receivables actually increased by 2.88% (meaning to say the loan business actually grows).
- Bank borrowings dropped by 7.88% as compared to last year (This is something WOW! image your overall business increase by 6.95%, your loan receivables increased by 3.73% however your bank borrowings decreased by 7.88%. Meaning Rcecap actually uses the money effectively).
- Gearing ratio is currently 1.77 which is lower than last year's gearing of 1.91.
- With such amazing quarter report, the management still remain cautious with the outlook and didnt sound too pessimistic.
Comments
- Valuation of Rcecap at RM1.77
- At currently price of RM1.77, its PE is merely 6 which is not consider as too expensive. At PE8, Rcecap is worth RM2.33.
- Rcecap usually distribute 30 to 35% of its net profit as dividend. Assuming if Rcecap is able to achieve an EPS of 30 sen, a 10 sen dividend payout is expected. At RM 1.77 a share, its DY is 5.6%.
- Its NTA is 1.69, hence at RM1.77 a share, its price to book value workout to be 1.04 which is very fair. However if we use its net asset per share of RM1.80 to calculate, its price to book value is 0.98 which is undervalue.
- Conclusion: even at the price of RM1.77, Rcecap doesnt seems to be too expensive. Considering that the volume has started to increase, any correction is consider an opportunity to collect.
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