Counter : Bursa - 1818
Market : KLSE
Background :Bursa Malaysia are the only listed stock exchange operator in Malaysia. Which say all kind of trading related activities on Malaysia Counter, will need to go thru Bursa Malaysia.
3 Major Product for Revenue:
- Securities and Derivatives Trading revenue(Main Driver)
- - Processing fees that investor paid to Bursa whenever we made any Buy/Sell on counter listed in Malaysia Stock exchange. - Major income for Bursa (around 50 - 60 % of total revenue)
- Listing and Issuer Services
- - Revenue from company to go listed. (IPO), anyway contribution to revenue not that significant and not stable as it depend on number of IPO.
- Market Data
- - Subscription fees by providing Market related data such as Announcement, Share Data, Company Fundamental data and etc.
- Others. (can be ignore as contribution to revenue not significant)
| Major Product/Service's Revenue | 2016(RM,000) | 2017(RM,000) | 2018(RM,000) | 2019(RM,000) | 2020-till Q2(RM,000) |
|---|---|---|---|---|---|
| Trading Revenue | 318,088 | 355,991 | 357,436 | 319,094 | 242,476 |
| Listing and Issuer Services | 53,540 | 61,775 | 60,112 | 54,018 | 24,005 |
| Market Data | 35,292 | 34,524 | 36,208 | 38,563 | 22,624 |
Strength :
- Low Debt
- - So far no debt observed on Bursa Malaysia as of 2020 Sep.
- Simple business model
- - Major business/Main profit of Bursa are provide trading service, a simple and easy to monitor business unlikely to Bank Industry or other company that involved complex and more diversify on their business.
- - Basically we just need to monitor trading volume then we can know how Bursa perform in coming quarter.
- Scalable income
- - Bursa Revenue contribute mostly by Trading Transaction Fees. Cost are more on Server & Staffing on maintaining the infrastructure/bursa daily operation.
- - 1000 people trading vs 100,000 people trading won't really increase a lot to the cost but can increase a lot of Profit. Thus this model can ensure Bursa have high NPM as long as number of trading participant is high.
- High ROE (Return on Equity) and High (Net Profit Margin)
-
2016 (%) 2017 (%) 2018 (%) 2019 (%) 2020-till Q2(RM,000) ROE 22.3 % 26.2 % 25.7 % 24.4 % 37.3 % NPM 39.9 % 41.3 % 41.9 % 37.72 % 45.67 % - Strong cashflow & consistent dividend paid
-
Year Free Cash Flow (RM,000) Dividend Paid(RM,000) 2016 218,168 187,442 2017 263,524 279,334 2018 228,079 277,082 2019 186,749 177,751 2020 till Q2 193,200 84,084
Risk :
- 2020 Sale driven by One Time Cause (Covid-19 Pandemic)
- - Year 2020, Bursa hit highest trading volume due to Covid-19 Pandemic. We cannot guarantee year 2021 Bursa can perform like year 2020.
- Malaysia Trading Market not as popular and attractive like other country
- - Unlikely to HKEX , Nasdaq and SGX, most of the company will choose to be listed in other country compare to Malaysia as they are flexible and able to attract more fund. When lesser good company listed in a Stock Exchange Market, then lesser investor will be attracted to trade.
Financial data:
Income Statement:
| Product/Service's Revenue | 2016 | 2017 | 2018 | 2019 | 2020 till Q2 |
|---|---|---|---|---|---|
| Revenue(RM,000) | 506,783 | 556,832 | 550,004 | 502,489 | 330,531 |
| Revenue yoy growth(%) | -2.3 % | 9.9 % | -1.2% | -8.6 % | -34.2 % |
| PBT(RM,000) | 270,590 | 306,418 | 308,175 | 255,765 | 203,173 |
| NP(RM,000) | 202,661 | 230,209 | 230,614 | 189,558 | 150,958 |
Operating Revenue Segmentation by Product/Service:
| Segment(RM,000) | 2016 | 2017 | 2018 | 2019 | 2020 till Q2 |
|---|---|---|---|---|---|
| Securities trading revenue | 212,921 | 259,617 | 265,809 | 232,840 | 188,177 |
| Derivatives trading revenue | 88,728 | 80,549 | 76,695 | 72,268 | 48,001 |
| BSAS trading revenue | 16,439 | 15,825 | 14,932 | 13,986 | 62,98 |
| Listing and Issuer Services | 53,540 | 61,775 | 60,112 | 54,018 | 24,005 |
| Depository Services | 39,035 | 42,376 | 42,170 | 41,938 | 21,269 |
| Market Data | 35,292 | 34,524 | 36,208 | 38,563 | 22,624 |
| Member Services and Connectivity | 21,001 | 21,408 | 21,835 | 21,499 | 10,354 |
| MISC | 5,752 | 6,006 | 5,530 | 5,023 | 0 |
Disclaimer : This post is for record and research Purpose. Not Buy and Sell Advice. Please do own study before making any purchase decision.
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