20180803-辉立证券-DBS_Group_Holdings_Ltd__NIM_at_2-year_high_and_guided_higher_9页_767kb

DBS Group Holdings Ltd 2Q18 Results Summary

核心内容

DBS Group Holdings Ltd reported its 2Q18 results, showing mixed performance across different income streams. The company's Net Interest Income (NII) and Net Interest Margin (NIM) performed well, with NIM reaching a two-year high of 1.85%, driven by rising interest rates. However, the company missed its profit forecast due to higher-than-expected income tax expenses. The report also highlighted the strong performance in Hong Kong, with earnings up 33% YoY, and adjusted the full-year loan growth guidance to 6-7% from 8% due to external market headwinds.

主要观点

积极因素

• NIM at two-year high: NIM expanded by 11 bps YoY, reaching 1.85%, with guidance suggesting further increases of 1-2 bps.
• Loans growth: Loans grew by 11.5% YoY, with notable increases in building and construction, housing loans, and loans to financial institutions. Housing loans grew by 14.1% YoY, maintaining a strong market share of 31% in Singapore.
• Hong Kong performance: Hong Kong earnings surged by 33% YoY, with NII up 28% YoY and NIM rising to 1.98% due to higher HIBOR.
• Dividend increase: 1H18 dividends reached 60 cents/share, a 82% YoY increase, with a current dividend yield of 4.5%.
• Target price upgrade: The target price was revised to S$33.32, an upgrade from S$32.70, based on higher book value assumptions.
• Wealth management growth: Wealth management revenue increased by 22.4% YoY, outperforming expectations.
• Asset quality: Credit costs declined to 12 bps, indicating improved asset quality.

消极因素

• Treasury market underperformance: Treasury market income dropped 58.5% YoY, leading to a pre-tax loss of S$50mn.
• Non-interest income decline: Other non-interest income fell by 31.8% YoY due to a flattening yield curve and wider credit spreads from trade tensions.
• Loan growth adjustment: Full-year loan growth guidance was revised to 6-7% due to property cooling measures and trade war impacts.

关键信息

财务数据

• NII (Net Interest Income): 2Q18 reached SGD 2,224 million, up 17.8% YoY and 4.5% QoQ.
• Net Fees & Commission Income: Increased by 11% YoY to SGD 706 million, with wealth management fees up 22.5% YoY.
• Other Non-Interest Income: Declined by 31.8% YoY to SGD 273 million, mainly due to lower net trading income and net income on financial investments.
• Total Income: Increased by 9.5% YoY to SGD 3,203 million.
• Expenses: Rose by 12.1% YoY to SGD 1,410 million, with the cost-to-income ratio at 43%.
• Profit Before Tax: Increased by 25.7% YoY to SGD 1,521 million.
• Net Profit After Tax: Increased by 25.7% YoY to SGD 1,521 million.
• EPS (Earnings Per Share): Rose to SGD 2.16 for FY18e, up from SGD 1.86 in FY17.
• BVPS (Book Value Per Share): Increased to SGD 19.11 for FY18e, reflecting a stronger balance sheet.
• ROE (Return on Equity): Reached 12.3% for FY18e, showing improved profitability.

财务比率

• P/E Ratio (Average): 11.7 for FY18e.
• P/B Ratio (Average): 1.4 for FY18e.
• Cost-to-Income Ratio: 43.6% in 2Q18, in line with guidance.
• Loan to Deposit Ratio (LDR): 86.1% in 2Q18, indicating a stable balance sheet.
• Non-Performing Loan (NPL) Ratio: 1.53% for FY18e, showing improved credit quality.

股票表现

• Last Traded Price: SGD 26.50.
• Forecast Dividend: SGD 1.20.
• Total Return Forecast: 30.27%.
• Market Cap: USD 48,862 million / SGD 66,946 million.
• 52-Week High/Low: SGD 30.76 / SGD 19.68.

业务板块表现

• Consumer/Priv Banking: Increased by 22.7% YoY to SGD 1,399 million.
• Institutional Banking: Grew by 9.5% YoY to SGD 1,421 million.
• Treasury: Declined by 58.5% YoY to SGD 107 million.
• Others: Increased by 21.1% YoY to SGD 276 million.
• Hong Kong: Contributed SGD 650 million, representing 20.3% of total revenue.

地区表现

• Singapore: Revenue of SGD 1,977 million, up 2.8% YoY.
• Hong Kong: Revenue of SGD 650 million, up 21.3% YoY.
• Rest of Greater China: Revenue of SGD 300 million, up 44.2% YoY.
• South and SE Asia: Revenue of SGD 197 million, up 17.3% YoY.
• Rest of the World: Revenue of SGD 79 million, down 11.2% YoY.

投资建议

• Rating: Buy (upgraded from previous).
• Valuation: Gordon Growth Model with assumptions of a risk-free rate of 2.6%, equity-risk premium of 5.5%, and a terminal growth rate of 3.0%.
• Target Price: SGD 33.32 (up from SGD 32.70).
• Recommendation: Based on both quantitative return bands and qualitative factors such as risk reward profile and market sentiment.

总结

DBS Group Holdings Ltd demonstrated resilience in its core banking activities, particularly in NIM and loans growth, despite challenges in non-interest income and treasury markets. The company's strong performance in Hong Kong and its strategic focus on wealth management and digital platforms support a positive outlook. With an upgraded rating to Buy and a revised target price, the stock is seen as a good investment opportunity, driven by its improving financial metrics and market position.