{"id":326123,"date":"2023-12-15T12:27:56","date_gmt":"2023-12-15T04:27:56","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326123"},"modified":"2023-12-15T12:27:59","modified_gmt":"2023-12-15T04:27:59","slug":"stock-in-focus-security-bank-corp-secb-15-dec-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-security-bank-corp-secb-15-dec-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Security Bank Corp. (SECB) – 15 Dec 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SECB<\/td><\/tr>
Company Name<\/strong><\/td>Security Bank Corp.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 Dec 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 103.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We lowered our target price (TP) for SECB to Php103.00 from Php109.00 as we adjusted our forecasts primarily from the weaker-than-expected non-interest income. Nevertheless, our new Target Price provides a lofty share price upside of 48% and a potential 2024 dividend yield of 4.3%. We also note that SECB is trading near its 52-week low, which could be a bargain play due to its continued net interest margin expansion (NIM). It has one of the lowest PBRs among our coverage at 0.4x, below the average 2023 Price-to-Book Ratio (PBR) of our coverage at 0.6x. Still a Buy.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Forecast adjustments<\/h3>\n\n\n\n

We slightly downgraded our 2023\/2024 net income forecasts by 1%. First, we
boosted our 2023\/2024 net interest income (NII) forecasts by 4%\/3%, mostly accounting for loan repricing and higher rates. Second, we lowered our non-interest income estimates by 9%\/6%, primarily from the y\/y reversal to FX and trading losses. Third, we slightly raised our FY23\/FY24 opex by 2% on higher investments in manpower and technology.<\/p>\n\n\n\n

Continued NIM expansion<\/h3>\n\n\n\n

SECB\u2019s 3Q 2023 net income advanced 3% q\/q to Php2.7 billion. Its net interest income grew 8% q\/q to Php8.9 billioin with its net interest margin (NIM) expanded by 6bps q\/q and 7bps y\/y.<\/p>\n\n\n\n

Fair asset quality<\/h3>\n\n\n\n

Outside of the top three banks, SECB\u2019s asset quality is the most decent with its non-performing loans (NPL) ratio standing at 3.15% for 9M23. This is lower compared to Union Bank and East West, both having NPL ratios over 4%.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>