Security Bank (SECB)

[shoyu_ramen]

Citiseconline
Philippine Equity Research
23 December 2011

Issue: Security Bank (SECB) Price: 96.65
Recommendation: Hold (but watch for breakout)
Suppt: 93.90 – 90.00 Resist: 98.50 – 100 / 105 RSI: 58

•SECB is still proceeding with its wind up after rallying significantly since October
•A pattern was generated given overbought levels but this has already been accounted for and may soon offer new up space for action looking at 100- 105+
•MACD readings have eased down and do show enough corrective action was performed adding to the timeliness
•Hold or look to add up into a resistance break above 98.50; support stop is placed at 93.90

[shoyu_ramen]

Security Bank, Marubeni JV to increase capital
Published : Thursday, December 29, 2011 00:00

The joint venture leasing company of Security Bank Corp. and Marubeni Corp. of Japan recently obtained regulatory approval to increase its capitalization.

Documents from the Securities and Exchange Corp. show that SBM Leasing Inc. raised its authorized capital stock from P150 million to P250 million. Out of the increase in capital stock, Security Bank subscribed to P60 million worth of shares and paid half of the subscription in cash.

Prior to the capital hike, the bank owned 60 percent of the leasing company, while Marubeni held the remaining 40 percent.

Formerly known as Security Finance Inc., SBM Leasing specializes in heavy equipment leasing.

SBM Leasing caters to Marubeni’s clients through Maxima Machineries Inc., the Japanese firm’s joint venture with another Philippine firm that is engaged in selling heavy equipment for construction and mining.

Marubeni is involved in the handling of products and provision of services in a broad range of sectors, including power projects and infrastructure, plants and industrial machinery, real estate development and construction, finance, logistics and information industry, and business investment, development and management. Marubeni has been engaged in the leasing business supporting the sales of construction machinery in the United Kingdom and in the Republic of Indonesia.


http://www.manilatimes.net/index.php/bu ... se-capital

[surfer]

average up buy. now aep 94

[Samael]

Aw yeah SECB!

[surfer]

Konti Lang sa classroom na Ito. Pero puro honor students

[surfer]

Tenkyu secb. Sold half. Sa uulitin

[Mr. Banker]

Tenkyu secb. Sold half. Sa uulitin

Ikaw naman congrats ko...fren surfer...galing secb noh!!!

[Samael]

Bol markit

[shoyu_ramen]

Citiseconline Research


Security Bank: Outperformance and Strong Growth Potential
Company Update
16 JANUARY 2012


Raising earnings forecast on higher than expected interest earning assets and margins. We raised our earnings forecast on Security Bank by 9.6% to Php5.1Bil in FY11 and 12.2% to Php5.6Bil in FY12 after factoring in 1.) the larger than expected growth in SECB’s lending portfolio and interest earning asset base, and 2.) the higher than expected net interest margin, 3.) partly offset by the lower than expected other income. (see exhibit 1)

During 9M11, SECB earned Php4.0Bil, up 21.8% year on year and already equivalent to 86.6% of our full year forecast. SECB delivered better than expected results as loans grew 23.2% to Php84.47Bil while interest-earning assets expanded by 37.8% to Php191.2Bil. Both figures were already higher than our original year end forecast of Php82.28Bil and Php175.8Bil respectively. Net interest margin dropped to an average of 4.1% during 9M11. However, the figure was also higher than our original forecast of 4.0%.

Premiere Bank acquisition and BSP’s decision to lift bank branching restriction to ensure sustainability of growth. SECB’s recent acquisition of Premiere Bank coupled with the BSP’s decision to lift bank branching restriction on smaller banks should improve SECB’s ability to grow its low cost deposit base. This in turn should enable SECB to grow its interest earning asset base, ensuring the sustainability of earnings growth. Last year, Security Bank acquired 98% of Premiere Bank for Php1.3Bil. Although the total deposit base of Premiere Bank is only Php2.9Bil or less than 3% of SECB’s deposit base as of end September 2011, the said bank has 38 branches, equivalent to 29% of SECB’s current branch network. Potential growth to SECB’s deposit base is substantial assuming that the productivity of Premiere Bank branches improves. Security Bank also said that it will most likely keep Premiere Bank separate to help it expand its branch network at a faster pace.

With two separate banks under the group, Security Bank could double the number of application for branch licenses.
Security Bank should also benefit from the Bangko Sentral ng Pilipinas’ (BSP) relaxation of its bank branching restrictions in key cities for banks with less than 200 branches. In fact, Security Bank already received approval from the BSP to expand its branch network in the restricted area, although the exact number of branches is not available.
Reiterating BUY rating. We reiterate our BUY rating on SECB and FV estimate of Php129/sh based on a target 2012E P/BV multiple of 2X. We like SECB given its track record of being the most profitable listed bank in the country in terms of ROE, and for having the strongest balance sheet.

Its recent acquisition of Premiere Bank and the BSP’s decision to lift bank branching restriction on smaller banks should also help Security Bank sustain earnings growth and maintain an elevated ROAE despite its larger size.


RESEARCH CONTACT

April Lynn Tan, CFA
april.tan@citiseconline.com

Charles William Ang
charles.ang@citiseconline.com

[Mr. Banker]

Wow na wow SecB...sayang wala na me nito...congrats to all holders!!!

[BartenderMD]

one of my favorites as well. I consider this one of my "ruler" stocks.

[BartenderMD]

Candlestick: long upper shadow
RSI: 87.77, oversold but above previous high of 85.33, no bearish divergence
DMI: does not show exhaustion

[Samael]

Gap filled. Consolidation muna ulet