Slower ADV + Cukai Makmur to impact FY22E
Results were in-line with FY21 net profit at 104%/102% of our/consensus forecasts. We raise FY22/23E net profit by 5%/2% post house-keeping and introduce FY24E. On slower equity ADV forecast and incorporating Cukai Makmur, we forecast FY22 net profit to fall 34% YoY. Our revised TP is MYR6.38 (+5%) based on unchanged 22x PER (10Y mean) on raised FY22E EPS. Catalysts are lacking with growth, policy risks and politics to impact sentiment and trading activities, in our view. Maintain HOLD.
Equity ADV and velocity slowed in 4Q21
4Q21 net profit of MYR65m (-38% YoY, -19% QoQ) brings FY21 to MYR355m (-6% YoY). 4Q equity ADV slowed to MYR2.66b, bringing 2021 to MYR3.66b (-15% YoY). Velocity was 35% in 4Q; 49% in 2021 (2020: 64%). At derivative trading, 4Q total contracts was flattish YoY/QoQ, bringing 2021 growth to just 1% YoY. Trading revenue from equity/derivative made up 59%/12% of FY21 operating revenue. Costs were well managed with FY21 CIR at 38% (FY20: 37%). A final 17sen DPS lifts FY21 to 41sen, 93% DPR (FY20: 92%).
Small revision to profits; no special dividend plan
Jan 2022 MTD’s equity ADV has been slower at MYR2.2b with foreign/DI/ retail participation at 20%/48%/32% (2021: 19%/44%/37%). We believe this is due to raised stamp duty on contract notes and growth-plus-policy risks affecting sentiment. We retain our 2022E (i) ADV of MYR2.5b based on YE2022 KLCI target of 1,710 [link] implying MYR1.95tr exchange market value at YE (YE2021: MYR1.79b), (ii) 32% trading velocity (pre-pandemic levels) assumption. For derivatives, we continue to impute 2% growth in
contracts in 2022. Our 93% DPR assumption translates into 27sen DPS for FY22E (4.4% DY). At its results briefing, management guided for no intention for a special dividend.
Key deliverables in 2022; strong balance sheet
Despite a challenging outlook, Bursa’s 2021-23 Strategic Roadmap is on track. Its 3 key deliverables in 2022 are the: (i) Voluntary Carbon Market (YE2022 launch), (ii) PLC transformation programme, and (iii)
commercialisation of digital gold Dinar. Its balance sheet remains strong with a net cash balance of MYR499m (62sen/Bursa shr) as of end-FY21.