Affin Bank, Suria Capital downgraded to ‘Sell’ at MIDF Research

Affin Bank Bhd and Suria Capital Holdings Bhd have been downgraded to ‘Sell’ at MIDF Research after the release of their full year results.

In a note today, MIDF Research lowered Affin’s 52-target price to RM1.70 from RM2.24. As at 11.25 am today, the counter traded unchanged at RM2.58.

The report said there was a huge reduction in non-interest income (NII) and sharp cost inflation – regardless this was improved by excellent non-interest income (NOII) performance and significantly lower provisions, noting last year’s lumpy provision allocation.

It also said Affin’s full-year dividend payout at 34% was well below the 50% range it has hovered around in recent years, with the management attributed this to weaker economic performance — and wording implies this could repeat if economic conditions persist.

Affin’s net profit for the year ended Dec 31, 2023 (FY23) plunged 66% to RM402.2 million on the back of RM1.99 billion in revenue.

Suria Capital’s fourth quarter ended Dec 31, 2023 (4Q23) net loss of RM2.0 million compared to RM9.0 million was mainly due to additional amortisation of concession assets based on the first concession period and increase in provision for replacement of ports’ capital expenditure for the quarter under review.

Its full year results for the financial quarter ended Dec 31, 2023 (FY23) saw its net profit drop 14% year-on-year to RM34.9 million on the back of RM280.5 million. Its revenue drop was mainly due to a one-off transaction for the additional entitlement in the form of carpark units (non-cash consideration) in the year 2022.

Suria Capital which ended yesterday’s trading at RM2.16 dropped 7% to RM1.99 at at 11.20am today. — TMR