Lets start this off with analyst consensus, since people tend to trust analyst more 😏
Consensus Target Price: RM21.76
Difference: RM1.90
Potential Gain/Loss: (%)9.58%
Consensus Date: 17 Oct 2019

A little background before we start our engines, Public Bank Bhd is a Malaysian banking group that provides a range of financial products and services, including personal banking, commercial banking, Islamic banking, investment banking, share broking, trustee services, nominee services, sale and management of unit trust funds, and general insurance products. The majority of their earning assets are from loans, advances, and financing.

✔️ Profitability – Income Statement 📨

The group’s revenue slightly decreased from 5.62bil to 5.61bil, a marginally small decreased but on the other hand their Net income increased by around 2.2% from 2,69bil to 2,75bil which is also a small increase but it is good considering that their revenue decreased.

Revenue 🔻 0.18%
Net Income 🔺 2.19%

Profit before tax expense and zakat increased from 1.759bil to 1.761bil however their Net profit for the period decreased from 1.4bil to 1.378bil this was due to higher tax expense and zakat for Q3 2019. Earnings per share also fell from 35.6 cents a share to 35.1 cents a share.

Profit Before Tax 🔺 0.11%
Net Profit 🔻 1.63%
EPS 🔻 1.41%

✔️ Assets, Liabilities and Equity – Balance Sheet ⚖️

Cash and balances with banks 💵 for “this bank” 🏦 has decreased by more than 4bil from 14.74bil to 10.13bil, we have to look more into this in their cashflow statement to see what is really happening. 🤔

However, their loans, advances and financing which is their bread and butter of this company has increased by around 15bil from 315.259bil to 325.232bil for the group, this estimates to be around an 3.11 percent increase.

Overall their total assets also increased about around 8bil from 419.693bil in Q3 2018 to 427.627bil in Q3 2019. Their increased of assets was due mainly from the loans, advances and financing section.

Loans, advances and financing 🔺 3.11%
Total Assets 🔺 1.87%

Now in terms of their liabilities. 🤔 Since banking sector is quite different from normal companies which borrows money from bank as their liabilities, so what exactly are the liabilities for banks?

One of them is “deposits from customers”. Yes you are right, we deposit our cash in banks such as FD or savings account, these are the liabilities for banks. So for Public Bank their deposits from customers increased by around 8bil from 339.159bil to 347.208bil.

Total liabilities has also increased around 46bil from 377.596bil in Q3 2018 to 383.845bil in Q3 2019. Total equity increased by around 1.7bil from 42bil to 43.78bil comparing both Q3 results.
Total liabilities 🔺 1.64%
Total equity 🔺 3.92%

✔️ Cash management – Cashflow statement 💰

Total operating income for the group has increased by around 8mil from 91.67mil to 98.2mil in Q3 2019, this was due mainly from 3 things.

📍 Foreign exchange profit
📍 Rental income from: investment properties
📍 Net gain on revaluation of investment properties

For their cash and cash equivalents at the end of the period decreased significantly is due to the balances with banks with original maturity more than three months which is stated in their Q3 2019 report.

Total group operating income 🔺 6.87%
Cash and cash equivalents at the end of the period 🔻 30.51%

So let me ask you guys, from the top when you see the analyst consensus versus what we have showed you based on their financials, is this company a good company, moderate company or bad company? Leave your comments down below! 😀

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