Newsroom
11 Nov 2020
The Star : Quick take: RCE Capital climbs to multi-month high of RM2.20
 
Quick take: RCE Capital climbs to multi-month high of RM2.20

MARKETS 


Maybank IB Research said its records indicate that RCE Captial's 2QFY21 earnings are a record high. "That said, we caution that 2QFY21 earnings could have ‘played catch up’ with the 1QFY21 one, ” it said.

KUALA LUMPUR: Shares of RCE Capital rose to multi-months high of RM2.20 in early Wednesday trade after its strong earnings and revenue in the second quarter ended Sept 30,2020.

At 10.12am, share price of the consumer financing company was up 18 sen to RM2.12. There were 1.96 million shares done at prices ranging from RM2.07 to RM2.20.

The FBM KLCI was down 10.97 points or 0.7% to 1,564.10. Turnover was 3.35 billion shares valued at RM1.37bil. There were 478 gainers, 426 losers and 405 counters unchanged.

Maybank Investment Bank Research said RCE Capital’s earnings and dividends came in within its expectations.

“In fact, our records indicate that the 2QFY21 earnings are a record high. That said, we caution that 2QFY21 earnings could have ‘played catch up’ with the 1QFY21 one, ” it said.

Maybank Research said it was wise to maintain its earnings estimates and RM2.09 target price based on target end-CY20E price-to-book value of one time for now.

It continues to like RCE for its relatively resilient business model and high dividend yields of 6% per annum.

It added that net profit of RM33mil (+22% YoY, +45% QoQ) brought 6MFY21 net profit to RM55.8mil (+9% YoY), which was within its expectations at 48% of its FY estimate.

The first interim DPS of six sen (+20% YoY) was also in-line with its expectations at 50% of its FY estimate.

“We gather the strong net profit growth QoQ was due to lifting of the Movement Control Order (March 18 to May 3), which allowed many customers to refinance and be charged early settlement income, ” it said.