RCECAP distributes dividend of 30 cents in FY 2023, this translates to dividend payout ratio of 63% (from The Edge)
As RCECAP announced a new dividend payout ratio of 60-80% for FY 2024 onwards, are we expecting that the dividend payout amount will be at around 30 cents or more for FY 2024 onwards, assuming the net profits remain the same and increasing yoy? If this is the case, the dividend yield for this Gem at the current price level is : 0.3/ 2.32 = 12.92%, which sounds awesome at the moment.
So glad i'm never believe in so called sifu observatory analysis and i been enjoying the capital gain plus increase dividends every year and the share split in 2022! Keep up the good work Rcecap Management and run the company well ! Thank you rcecap😄
What's wrong with you? Did observatory say he is a sifu? Did he give a sell call????? Below was his comment.
Posted by observatory > 2023-02-15 19:52 | Report Abuse
The top line is helped by non-interest income of almost RM19m, which is a record high. NII now constitutes 28.5% of total income. As mentioned in the management review, it's primarily driven by "higher early settlement income arising from increased refinancing activities". The question is, could refinancing activities be near its peak now?
More reassuringly, financing receivables have been growing above 6% YoY in the last and current quarters, reversing the slow down that started in 2020. As long as management remains prudent with its lending, this will be a more reliable and growing source of income in the future.
Thanks for the correction, my bad, with that special dividend, the total dividend payout of 30 cents in FY 23 represents a dividend payout ratio of 158% (as per RCECAP latest QR Note 8: Total dividend declared in respect of the financial year ended 31 March 2023 is 30.00 sen. This translates to a dividend payout ratio of 158.4%.)
With the anticipated dividend payout of 14 cents in FY 24 (Maybank report), the current dividend yield at current price is at 0.14 / 2.32 = 6.034%, still a decent yield but yeah, the price movement of this stocks are quite elevated at the moment...
Another good quarter. For the last 3 years, net interest income fluctuated at around RM43m - RM52m per quarter. It is RM46m in the latest quarter. The good result in recent quarter is contributed by rising non-interest income.
Impairment on financings has been coming down to RM4.7m (versus RM8.2m last quarter, and RM8.2m a year ago). Credit cost is 93 basis points. This is good. Hopefully this is a new trend after recording on average about 150 basis points per quarter throughout FY23.
Gross financing continues to grow modestly to RM2,045m (+1.2% QoQ, +7.4% YoY). This is in line with management's guidance to analysts earlier that the company financing growth will track the banking industry. It's better to grow conservatively through quality financing.
One bright spot with RCE is the Board is willing to return excess capital to shareholders. Not only through increased dividends, where payout ratio has increased from 30% a few years ago to current 60%, but also the 18 sen special dividends in late 2022.
As a result, the company has reversed the ROE decline seen earlier. Despite its growing business size, ROE has actually risen back to 17% - 18% range. This is rare and impressive act. Such attitude of taking care of shareholders is probably one reason that the market has re-rated its share.
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