Case Study on DBS (SGX: D05) - Using ShareInvestor

Established on 16th July 1968 by the Government of Singapore to take over the industrial financing activities from the Economic Development Board, DBS Group Holdings Ltd is a now multinational banking and financial services corporation. DBS acquired POSB Bank on 16th November 1998 and currently have multiple branches all over Singapore. DBS Bank is the largest bank in South East Asia by assets and among the larger banks in Asia, with total assets of S$482 billion as at 31st Dec 2016.

DBS have strong market positioning in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund-raising in Singapore and Hong Kong. Its largest and controlling shareholder is Temasek Holdings. DBS received Global Finance's "Safest Bank in Asia" accolade for six consecutive years, from 2009 to 2015 and was also awarded the Best Digital Bank in the World in the year 2016 by Euromoney. With operations in 17 markets, the bank has a regional network spanning more than 250 branches and over 1,100 ATMs across 50 cities.

DBS recently reported a quarterly profit slightly below estimates on Monday (Nov 5), expressing worries due to trade war and property cooling measure that might lead to hold back on its loan book growth next year. With the intensifying tariff dispute between China and the United States impacting Singapore’s export-reliant economy, and implementation of new measure, outlook for bank are clouded after reporting their profit last year.

DBS reported net profit came in at S$1.41 billion in the three months ended September as compared to S$822 million a year earlier. 

DBS having 31 per cent share of the Singaporean housing loan market mention that the slowdown in new mortgages due to recent cooling measures is bigger than expected. Before the latest round of measures were introduced this year, DBS is expected to grow its mortgage book by around S$4 billion in 2018. However, the lender revised it to S$3.5 billion and now expects about S$2.5 billion after implementation of the cooling measures.

Let’s look at how DBS is scoring based on ShareInvestor’s grid:

DBS shares fell 2.6 per cent in afternoon trade after the result release, on track for their biggest single-day percentage fall in nearly three months.

In terms of price movement, although there is a huge decline in its year on year high but there is a strong support for its incremental year on year low. 

Reviewing historical CAGR data, the company is also showing positive performances across the ups and downs of both business and market cycles. 

However, considering that CAGR does not reveal growth volatility, we can look at forward estimates to have a sensing of the pace of growth and momentum that can be carried into future years. 

With strong estimates put forth by the analysts based on growth forecast, four analysts from research houses maintain DBS as BUY and one as Hold in November 2018. 

With its less than estimated profit for Q3, is it still a good stock to include in your portfolio? Leaving you with ShareInvestor’s consensus estimates. 

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