Nov 2007 Financial News

AMBL Releases Nine Months Results

Nov 12, 2007

Ansa Merchant Bank Limited (AMBL)
Results for the Nine Months Ended September 30, 2007

Ansa Merchant Bank Limited (AMBL) for the Nine Months Ended September 30, 2007, reported Earnings Per Share (EPS) of $1.34 which represented a significant increase of 38.14 per cent or 37 cents when compared to NM06.

For NM07, Total Income amounted to $429.62 million, an increase of $67.25 million or 18.56 per cent on the same period in fiscal 2006. Q307 on Q306, this figure was up by a much smaller margin of 3.35 per cent from $134.71 million to $139.22 million. Total Expenses for the period under review stood at $293.90 million, up 9.43 per cent on the corresponding figure for NM06. However, Q307 on Q306, the Company was able to control Expenses as this figure fell by 1.57 per cent or $1.50 million. Thus, Operating Profit for the Nine Months was $135.73 million, up a noteworthy 44.71 per cent on the same figure for NM06. Q307 on Q306, Operating Profit was up a healthy 15.55 per cent or $6.02 million.

The Effective Tax Rate for the Nine Month period was 17.01 per cent compared to a Tax Rate of 13.03 per cent for NM06. As such, Profit After Taxation ended NM07 at $112.64 million, up a considerable 38.08 per cent or $31.06 million on the same figure in the last financial year.

AMBL last closed at a price of $20.00. We are forecasting an EPS of $2.00 for FY07, which at the current price translates to a P/E multiple of 10 times. Additionally using a multiple of 12 times and the forecasted EPS of $2.00, this share has an expected return of approximately 20 per cent on the current price or a target price of $24.00. Thus, based on this analysis we continue to recommend a BUY on this share. However, we continue to caution investors that the shares of AMBL are very tightly held. ANSA McAL Limited holds approximately 82 per cent of the share capital of this Company and hence there is limited availability and liquidity of these shares on the market.

Gia Singh
WISE Equity Research Team