Asia United Bank Prospectus Highlights
Asia United Bank: Prospectus Highlights (Summary & Recommendation)
RECOMMENDATION: BUY
AUB at the offer price of P95/share, with a book value estimate of 58.34 – 59.24 (assuming exercise of overallotment/OA), registers a Price-to-Book Value (PBV) of 1.63 – 1.60x.
Based on a 2 – 2.3x PBV range, which is the current PBV range in the banking sector, we forecast a Price Target Range of 116 – 128. Assuming full exercise of OA, Price Target Range increases to 118 – 130. The closest comparable to AUB is EastWest Bank (EW) which currently trades at 2.67x.
With a primary offer of 80,000,000 shares, representing a 25% public float, the company will raise Gross Proceeds of P7.6 billion and Net Proceeds of P7.2 billion. The offer runs from May 7 – 14, and the company is expected to list on May 17, Friday.
AUB is a medium-sized commercial bank that has been in operations for 15 years. As of end-2012, the bank had 107 branches, including 68 branches strategically located in Metro Manila and 100 ATMs. In Feb. 2013, the bank’s application for a universal banking license was approved and will be effective in Q4 2013.
Earnings (2012 & Q1 2013)
In 2012, AUB earned P1.4 billion in Net Income and registered a Return on Average Equity of 13.60% . Total assets, Tier 1 Capital Adequacy Ratio and Total Capital Adequacy Ratio were P64.9 billion, 15.0% and 15.4%, respectively. The bank had maintained a healthy NPL ratio of 1.90% despite recent bank acquisitions (i.e. Asiatrust Bank) and has increased NPL coverage ratio at 120%. In Q1 2013, AUB earned P523 million, 62% higher from the same period in the previous year due to higher loan volume and trading gains. Total Assets further increased to P69 billion and Return on Equity to 18.3%. Note: Q1 2013 figures represented 37% of full-2012 Net Income.
Use of Proceeds
Acquisitions / Payments for Branch Licenses
1,000.00
13.00% within 3 years
Expansion of Branch Network
1,000.00
13.00% within 3 years
IT
RECOMMENDATION: BUY
AUB at the offer price of P95/share, with a book value estimate of 58.34 – 59.24 (assuming exercise of overallotment/OA), registers a Price-to-Book Value (PBV) of 1.63 – 1.60x.
Based on a 2 – 2.3x PBV range, which is the current PBV range in the banking sector, we forecast a Price Target Range of 116 – 128. Assuming full exercise of OA, Price Target Range increases to 118 – 130. The closest comparable to AUB is EastWest Bank (EW) which currently trades at 2.67x.
With a primary offer of 80,000,000 shares, representing a 25% public float, the company will raise Gross Proceeds of P7.6 billion and Net Proceeds of P7.2 billion. The offer runs from May 7 – 14, and the company is expected to list on May 17, Friday.
AUB is a medium-sized commercial bank that has been in operations for 15 years. As of end-2012, the bank had 107 branches, including 68 branches strategically located in Metro Manila and 100 ATMs. In Feb. 2013, the bank’s application for a universal banking license was approved and will be effective in Q4 2013.
Earnings (2012 & Q1 2013)
In 2012, AUB earned P1.4 billion in Net Income and registered a Return on Average Equity of 13.60% . Total assets, Tier 1 Capital Adequacy Ratio and Total Capital Adequacy Ratio were P64.9 billion, 15.0% and 15.4%, respectively. The bank had maintained a healthy NPL ratio of 1.90% despite recent bank acquisitions (i.e. Asiatrust Bank) and has increased NPL coverage ratio at 120%. In Q1 2013, AUB earned P523 million, 62% higher from the same period in the previous year due to higher loan volume and trading gains. Total Assets further increased to P69 billion and Return on Equity to 18.3%. Note: Q1 2013 figures represented 37% of full-2012 Net Income.
Use of Proceeds
Acquisitions / Payments for Branch Licenses
1,000.00
13.00% within 3 years
Expansion of Branch Network
1,000.00
13.00% within 3 years
IT