Qatari stock report - Qatar Islamic Bank

QATAR

Qatar Islamic Bank drops 3.3% August 16, 2018 12:30 AST

NEWS BITES - MIDDLE EAST & NORTH AFRICA

Qatar Islamic Bank (QE:QIBK), Qatar's 2nd largest Bank by market cap, has dropped QAR4.38 (3.3%) from its last trading session of August 15 to close at QAR126.47. Compared with the QE Index which fell 127.3 points (1.3%) in the day, the relative price change was -2.0%. The volume of 91,104 shares was close to average trading. Its MCap is QAR29.9 billion (US$8.2 billion).

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

SECTION 2 BULLISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 GLOBAL RANKING

SECTION 6 SUMMARY FINANCIALS

SECTION 7 PROFILE

SECTION 1 QATAR ISLAMIC BANK BEARISH SIGNALS

1.1 Technicals:

Significant Downtrend: The stock dropped 3.3% on high volatility today.

+ The price tumbled 6.3% in the last week.

+ Compared with the QE Index which fell 4.4% for the week, this represented a relative price decrease for Qatar Islamic Bank's stock of 1.9% for the week.

Low Performance Indicators and rank of Qatar Islamic Bank in the Qatar market:

DescriptionQIBK ValueRank In Market
Price Change %-3.3In Bottom 6%
Volatility %4.1In Bottom 9%
Return on Assets [ROA] %1.5In Bottom Quartile

1.2 Fundamentals:

+ Total Liabilities/EBITDA of 20.3 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ As per the Du Pont analysis, Return on Equity [ROE] is less than stellar at 2.0%; a deterioration from 2.1% last year. ROE is computed as net profit margin of 41.2% times asset turnover [sales/assets] of 0.04 times leverage factor [total assets/shareholders' equity] of 1.4.

YOY Deterioration in ROE and Profit Margin

Du Pont AnalysisROEProfit MarginAsset TurnoverEquity Multiplier
Current Year2.041.20.041.4
Previous Year2.144.40.041.4

1.3 Overvaluation [compared with sector average]:

+ Price/Earnings of 13.6 [11.5]. We estimate Qatar Islamic Bank stock is trading at a current year P/E of 11.2 and a forward year P/E of 10.1.

+ Return on Equity 2.0% [7.7%].

SECTION 2 QATAR ISLAMIC BANK BULLISH SIGNALS

2.1 Technicals:

+ In the last three months the stock has hit a new 52-week high sixteen times, pointing to a significant uptrend.

+ The present value of QAR1,000 (PV1000) invested one year ago in Qatar Islamic Bank is QAR1,467, comprising a capital gain of QAR397 and dividend reinvested of QAR70.

PV10001-week1-month1-year
QIBK.QE9371,0401,467
QE Index9569871,049

+ The present value of QAR1,000 (PV1000) invested ten years ago in Qatar Islamic Bank is QAR1,537, including a capital gain of QAR197 and dividend reinvested of QAR340.

+ 10 years Multiplier in QAR = 1.537x

+ Compound Annual Growth Rate (CAGR) in QAR = 4.4%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in Qatar Islamic Bank is $US1,536, including a capital gain of $US196 and dividend reinvested of $US340.

+ 10 years ago USD 1 equalled QAR 3.6377

+ 10 years Multiplier in USD = 1.536x

+ Compound Annual Growth Rate (CAGR) in USD = 4.4%

Aug 16, 2018: USD 1 equals QAR 3.64

2.2 Oversold/Bullish/Support Signals:

+ The stock is oversold according to the Williams % R indicator of -81.3, suggesting the price is close to its 14-day low of QAR124.0.

High Performance Indicators and rank of Qatar Islamic Bank in the Qatar market:

DescriptionQIBK ValueRank In Market
Price/MAP2001.21In Top 3%
P/E * P/NTA3.94In Top 7%

2.3 Fundamentals:

+ The P/E of 13.6 multiplied by the P/NTA of 0.3 is 3.9. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ The relative yield of QIBK, defined by its yield of 4%, divided by average yield of dividend yielding stocks in the QE Index of 3.4% is 115.8%. This suggests Qatar Islamic Bank stock is undervalued in dividend yield terms.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.2. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stocks by value of Q Ratio.

+ Net profit margin has averaged 43.5% in the last 3 years. This is considered superior and suggests a high margin of safety.

Annual Trend in Revenue, EPS and EBITDA:

5-years average annualized earnings growth rate of 11.4%

+ Profit growth and EBITDA growth are positive and have seen consecutive rises in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Dec 17138.97.1
Dec 1624.56.13.4

2.4 Undervaluation [compared with sector average]:

+ Price to Book of 0.3 [0.9]. We estimate Qatar Islamic Bank stock is trading at a current year Price to Book of 0.1 and a forward year Price to Book of 0.1.

+ Year-on-Year Earnings Growth of 8.9% [6.5%].

+ Price/Earnings/Growth of 1.1 [1.8].

+ Dividend yield of 4% [3.2%].

SECTION 3 QATAR ISLAMIC BANK PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 90,019 shares worth QAR11.4 million (US$3.1 million) traded today. In the past week, volume was 1.0 times average and the shares were down 6.3%. The volume of 91,104 shares was close to average trading.

+ Qatar Islamic Bank is at a discount of 7.8% to its 12-month high of QAR137.20 on August 06. It is also at a premium of 52.8% to the 12-month low of QAR82.77 on September 18, 2017.

3.2 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 8.2% (or a turnover period of 12 years 2 months). This average length of ownership of the stock at 1.2 times the average holding period of 9 years 10 months for stocks in the QE Index suggests a larger number of core investors, making a long-term investment safer.

3.3 Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in QIBK would have produced a return of 45.2%.

QIBKClose (QAR)Dividends (QAR)Capital Gain / (Loss) %% YieldAnnual Return %
Aug 16126.47539.75.545.2
1 Yr ago90.534.75(12.5)4.6(7.9)
2 Yrs ago103.454.255.64.310.0
3 Yrs ago97.924.255.54.610.1
4 Yrs ago92.84467.97.275.2

Close 5 years ago QAR55.29

3.4 Beta:

+ Beta: the Beta of Qatar Islamic Bank stock is 0.6. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.5 Year-To-Date

+ Qatar Islamic Bank (QE:QIBK), has jumped QAR32.29 (or 34.3%) year-to-date (YTD) in 2018 to close at QAR126.47 today. This means the stock has outperformed 91% of Qatar-listed stocks in 2018. Compared with the QE Index which has risen 10.7% YTD, this is a relative price increase of 23.6%.

SECTION 4 QATAR ISLAMIC BANK RELATED NEWS

Other News

+ BSS/News Bites:

Qatar Islamic Bank is placed 4/40 in BSS News Bites' ranking of Qatar performers in the past year, a percentile ranking of 90.

+ Vanguard Total World Stock ETF 2588:

The stock was one of 2588 global stocks selected by Vanguard Total World Stock ETF (VT) who sold 15,816 shares in the period May 31, 2018 to Jun 30, 2018 worth $US-1,882,522 at an estimated Volume Weighted Average Price (VWAP) of $US119.0265. As at Jun 30, 2018, the Vanguard Total World Stock ETF held 0 shares worth $US0 or 36,597% by value of the ETF's portfolio [Ranked 1648 out of 2588 by value and 2 out of 4 for Qatar].

SECTION 5 QATAR ISLAMIC BANK GLOBAL RANKING

Global Rank [out of 47,644 stocks] and Rank of Qatar Islamic Bank in the Middle East & Africa Region [out of 2,279 stocks]

DescriptionValueGlobal RankIn MEA Region
MCap (US$)8.2B1,67443
Total Assets (US$)41.3B1,02734
Revenue (US$)1.7B4,814119
Net Profit (US$)660.8M1,51340
Return on Equity %2.026,3981,332
Net Profit Margin %41.22,551221
Price to Book0.32,203115
Price/Earnings14.17,598591
Yield %3.87,628797
PV$1000 (1Year) US$*1,4703,949178
US$* Change (1Year) %45.94,394192

* 1 year ago USD 1 = QAR 3.65

Aug 16, 2018: USD 1 equals QAR 3.64

SECTION 6 QATAR ISLAMIC BANK SUMMARY FINANCIALS

6.1 Dividend History

+ Trailing 12 months dividend has improved from QAR4.0 in 2014 to QAR5.0 in 2018.

6.2 Financials Summary (Past 3 years)

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)1.71.51.2
Pretax (USD M)623.3582.6560.6
Net (USD M)660.8592.1536.9
EPS (QAR)9.318.558.06

+ Net profit was up 11.6% from US$592.1 million in 2016 to US$660.8 million in 2017.

+ Earnings Per Share (EPS) was up 8.9% from QAR8.55 to QAR9.31.

SECTION 7 QATAR ISLAMIC BANK PROFILE

7.1 Activities

Qatar Islamic Bank provides banking services according to Islamic Sharia principles. The Bank carries out banking services, investment and financing activities through various Islamic modes of financing, such as Sukuk, Murabaha, Mudaraba, Musharaka, Musawama, Istisnaa and Ijarah. It also offers individual and corporate banking services. The Bank operates through 18 domestic branches and representative offices.

7.2 Top Management

The chief executive officer is Bassel Gamal.

7.3 Issued Capital

Based on 236,293,200 issued shares the market capitalisation is QAR29.9 billion (US$8.2 billion).

COMPANY IDENTIFIERS

Contact: 974 -4409409

Physical Address: Grand Hamad Ave. - Doha 559

State/Province/Country: Qatar

Exchange: Qatar Stock Exchange

Economic Sector: Financials

Business Sector: Banking & Investment Services

Industry Group: Banking Services

Industry: Banks

ISIN: QA0006929853

QA:QIBK; QD:QIBK; QISB.QA

PermID: 4295886959

RIC: QISB.QA

Source: www.BuySellSignals.com