Kenanga Investment notes a technical rebound may be in store for MBSB’s share price after touching a recent low of RM0.55 in mid-July. This follows its earlier fall from a high of RM0.68 in early April this year.
The positive momentum is expected to persist as both the RSI and stochastic indicators are in the midst of climbing out from the oversold territory. This could then lift the stock to challenge the resistance thresholds of RM0.61 (R1; 10% upside potential) and RM0.65 (R2; 17% upside potential). The stop loss price level is pegged at RM0.51 (representing an 8% downside risk from yesterday’s close of RM0.555).
A full-fledged Islamic banking group, MBSB registered a 63% YoY jump in net profit to RM438.7m in FY December 2021
that was followed by quarterly net earnings of RM58.2m (-8% YoY) in 1QFY22. Moving forward, consensus is forecasting the group’s bottomline to come in at RM624m in FY22 and RM757.5m in FY23. Valuation-wise, based on its book value per share of RM1.20 as of end-March 2022, the stock is currently trading at Price/Book Value multiple of 0.46x (or near the minus 1SD level from its historical mean).
In terms of corporate development, MBSB is presently exploring the possibility of undertaking an acquisition of a 100%
stake in Malaysian Industrial Development Finance (MIDF) with an announcement likely to be made by early October.
