Home
Register
LB FINANCE PLC
Corporate Update - STRONG BUY
Current Price: LKR 118.0 Fair Value: LKR 178.0
“Forerunner in Finance”
[You must be registered and logged in to see this link.]
LB Finance, the 4th largest NBFI in terms of asset base (LKR 95Bn) is likely to register an earnings growth trend with a CAGR of 21% FY17E-19E driven by growth in lending volume (CAGR of 20%). We expect LFIN earnings to reach LKR 4.5Bn (24%YoY) in FY18 and LKR 5.3Bn (18%YoY) in FY19. LFIN at a target price LKR 178.0 offers a total return of 61% including dividends over a 1-Yr period. STRONG BUY.
Margins to register slow dip, Credit Growth to remain moderate: Rising interest rate environment results in LFIN’s deposit base re-pricing faster than it assets. Lending attached to leases is likely to experience a dip in margins while credit growth is expected to remain moderate around 16-18% despite deceleration from 2016. New LTV regulations also likely to support the slower credit in 2017E.
Second-hand vehicle market and rise in gold price may lead to improvement in NPLs: 66% of LFIN’s lending book is related to vehicles and we expect the rise in vehicle prices may lead to an improvement in asset quality of LFIN. The rise in gold prices has led to an improvement in the confidence level of gold owners who are likely to resettle the gold loans in order to recover the articles.
LFIN to provide a 61% return over 12-months period: FC Research expect LFIN.N to achieve a fair value of LKR 178.0 providing a total return of 61% (Dividend yield 10%) over 12-month period. [Justified PBV based LKR 187.6, Residual income based LKR 198.0 and PER based LKR 147.1].
Risks associated: Given the nature of the industry LFIN is exposed to credit, market and regulatory risks.
Disclosure on Shareholding:
First Capital Group or its affiliates do not hold shares in LFIN. Neither First Capital Group nor its affiliates have traded in the shares in the three trading days prior to this document, and will not trade in the shares for three trading days following the issue of this document.
Corporate Update - STRONG BUY
Current Price: LKR 118.0 Fair Value: LKR 178.0
“Forerunner in Finance”
[You must be registered and logged in to see this link.]
LB Finance, the 4th largest NBFI in terms of asset base (LKR 95Bn) is likely to register an earnings growth trend with a CAGR of 21% FY17E-19E driven by growth in lending volume (CAGR of 20%). We expect LFIN earnings to reach LKR 4.5Bn (24%YoY) in FY18 and LKR 5.3Bn (18%YoY) in FY19. LFIN at a target price LKR 178.0 offers a total return of 61% including dividends over a 1-Yr period. STRONG BUY.
Margins to register slow dip, Credit Growth to remain moderate: Rising interest rate environment results in LFIN’s deposit base re-pricing faster than it assets. Lending attached to leases is likely to experience a dip in margins while credit growth is expected to remain moderate around 16-18% despite deceleration from 2016. New LTV regulations also likely to support the slower credit in 2017E.
Second-hand vehicle market and rise in gold price may lead to improvement in NPLs: 66% of LFIN’s lending book is related to vehicles and we expect the rise in vehicle prices may lead to an improvement in asset quality of LFIN. The rise in gold prices has led to an improvement in the confidence level of gold owners who are likely to resettle the gold loans in order to recover the articles.
LFIN to provide a 61% return over 12-months period: FC Research expect LFIN.N to achieve a fair value of LKR 178.0 providing a total return of 61% (Dividend yield 10%) over 12-month period. [Justified PBV based LKR 187.6, Residual income based LKR 198.0 and PER based LKR 147.1].
Risks associated: Given the nature of the industry LFIN is exposed to credit, market and regulatory risks.
Disclosure on Shareholding:
First Capital Group or its affiliates do not hold shares in LFIN. Neither First Capital Group nor its affiliates have traded in the shares in the three trading days prior to this document, and will not trade in the shares for three trading days following the issue of this document.
» CCS.N0000 ( Ceylon Cold Stores)
» Sri Lanka plans to allow tourists from August, no mandatory quarantine
» When Will It Be Safe To Invest In The Stock Market Again?
» Dividend Announcements
» MAINTENANCE NOTICE / නඩත්තු දැනුම්දීම
» ඩොලර් මිලියනයක මුදල් සම්මානයක් සහ “ෆීල්ඩ්ස් පදක්කම” පිළිගැනීම ප්රතික්ෂේප කළ ගණිතඥයා
» SEYB.N0000 (Seylan Bank PLC)
» Here's what blind prophet Baba Vanga predicted for 2016 and beyond: It's not good
» The Korean Way !
» In the Meantime Within Our Shores!
» What is Known as Dementia?
» SRI LANKA TELECOM PLC (SLTL.N0000)
» THE LANKA HOSPITALS CORPORATION PLC (LHCL.N0000)
» Equinox ( වසන්ත විෂුවය ) !
» COMB.N0000 (Commercial Bank of Ceylon PLC)
» REXP.N0000 (Richard Pieris Exports PLC)
» RICH.N0000 (Richard Pieris and Company PLC)
» Do You Have Computer Vision Syndrome?
» LAXAPANA BATTERIES PLC (LITE.N0000)
» What a Bank Run ?
» 104 Technical trading experiments by HUNTER
» GLAS.N0000 (Piramal Glass Ceylon PLC)
» Cboe Volatility Index
» AHPL.N0000
» TJL.N0000 (Tee Jey Lanka PLC.)
» CTBL.N0000 ( CEYLON TEA BROKERS PLC)
» COMMERCIAL DEVELOPMENT COMPANY PLC (COMD. N.0000))
» Bitcoin and Cryptocurrency
» CSD.N0000 (Seylan Developments PLC)
» PLC.N0000 (People's Leasing and Finance PLC)
» Bakery Products ?
» NTB.N0000 (Nations Trust Bank PLC)
» Going South
» When Seagulls Follow the Trawler
» Re-activating
» අපි තමයි හොඳටම කරේ !
» මේ අර් බුධය කිසිසේත්ම මා විසින් නිර්මාණය කල එකක් නොවේ
» SAMP.N0000 (Sampath Bank PLC)
» APLA.N0000 (ACL Plastics PLC)
» AVOID FALLING INTO ALLURING WEEKEND FAMILY PACKAGES.
» Banks, Finance & Insurance Sector Chart
» VPEL.N0000 (Vallibel Power Erathna PLC)
» DEADLY COCKTAIL OF ISLAND MENTALITY AND PARANOID PERSONALITY DISORDER MIX.
» WATA - Watawala
» KFP.N0000(Keels Food Products PLC)
» Capital Trust Broker in difficulty?
» IS PIRATING INTELLECTUAL PROPERTY A BOON OR BANE?
» What Industry Would You Choose to Focus?
» Should I Stick Around, or Should I Follow Others' Lead?