Performance of Finance Companies as of Q3-FY65/66

Sunday - 24th May, 2009 | ResCon

Research @ ResCon:

The Accumulated Net Profit summary of the Finance Companies Group is given below.

Up to Q3 of 2064/65:                              Rs 507.95 million
Average Net Profit in Q3 2064/65:          Rs 8.76 million

Up to Q3 of 2065/66:                              Rs 1,036.84 million
Average Net Profit in Q3 2065/66:          Rs 17.88 million

Increment in Net Profit :                        439%

Please note that the report comprises of the figures of all the finance companies (listed and non-listed), which have published their financial results, except for Cosmic Merchant Banking & Finance, Lumbini Finance & Leasing, Lord Buddha Finance, Paschimanchal Finance, Bhajuratna Finance & Saving, Butwal Finance, Nepal Shree Lanka Merchant Bank and Everest Finance and some other non-listed companies (these companies are yet to publish their financial statements).

  1. The 3rd Quarter of FY 2065/66 unaudited Net Profit figures of Finance Comapnies group clearly shows that finance companies, in general, performed well in this quarter as compared to corresponding quarter of the previous year.

  2. On an average, finance companies’ profit advanced by 439% this quarter. The group accumulated Rs 1,036.84 million in net profits this quarter compared to Rs 507.95 million net profits in the corresponding previous year quarter.

  3. The net profit of each finance company is 17.88 million on an average.

  4. Kuber, Shikhar, Kaski Finance Companies have highest net profit advancement. They have increased their profit by 8,601%, 2,600% and 2,287%r respectively over the corresponding previous quarter.  The increments are exceptional.

  5. Nava Durga, Nepal Share Market and Janaki Finance are the only companies that have negative profit growth figure.

Amount in Rs/million

#

Company FY 2065/66
(Up to 3rd Qtr)
FY 2064/65
(Up to 3rd Qtr)
Change
1 Sagarmatha Mer. Banking & Fin.  12.631 9.453 34%
2 Kaski Finance  10.958 0.459 2287%
3 Shree Investment & Finance 20.475 14.238 44%
4 Reliable Investment Finance 23.557 19.092 23%
5 Yeti  Finance  8.17 -7.383 211%
6 Maha Laxmi Finance  25.13 4.828 421%
7 International Leasing & Finance 51.442 27.543 87%
8 Fewa Finance 21.126 16.134 31%
9 Api Finance  4.492 0.426 954%
10 IME Financial Institution  36.712 14.379 155%
11 Birgunj Finance  15.884 9.805 62%
12 ICFC Bittya Sanstha  40.341 26.581 52%
13 Imperial Financial  6.76 -5.088 233%
14 Nepal Express Finance  5.313 0.837 535%
15 Goodwill Finance 14.347 11.508 25%
16 Alpic Everest Finance 11.232 3.026 271%
17 Annapurna Finance 30.294 27.576 10%
18 Shikhar Finance -0.459 -0.017 2600%
19 Prudential Finance 12.815 5.182 147%
20 Nava Durga Finance 4.513 6.608 -32%
21 Om Finance  15.302 10.246 49%
22 Nepal Housing & Merchant Finance  18.726 3.521 432%
23 Nepal Housing Development Finance   10.394 7.927 31%
24 Nepal Dev. & Emp. Promotion Bank   27.766 5.018 453%
25 Lalitpur Finance  47.37 27.738 71%
26 Standard Finance  5.922 1.583 274%
27 Pokhara Finance  34.585 10.748 222%
28 World Merchant Banking & Finance  20.36 8.885 129%
29 Kuber Merchant Bittiya Sanstha   9.397 0.108 8601%
30 Peoples Finance  12.704 2.066 515%
31 Kathmandu Finance  11.398 2.545 348%
32 Royal Mer. Bank.& Finance  15.012 7.606 97%
33 Guheyshwori Merchant Banking & Fin.  21.116 17.028 24%
34 Siddhartha Finance  21.858 20.606 6%
35 General Finance  1.945 0.079 2362%
36 Union Finance    20.282 8.305 144%
37 Nepal Finance  25.142 22.076 14%
38 Universal Finance  13.861 10.884 27%
39 Samjhana Finance 4.625 -15.26 130%
40 Valley Finance  6.545 2.8 134%
41 Nepal Share Markets  29.529 34.498 -14%
42 Civil Merchant bittya sanstha  15.085 8.99 68%
43 Narayani Finance  31.197 16.841 85%
44 Janaki Finance 3.781 11.817 -68%
45 Capital Merchant Banking & Finance  57.775 37.83 53%
46 Prabhu Finance  18.434 -16.821 210%
47 Manjushree Finance  6.399 0.833 668%
48 National Finance  10.739 6.421 67%
49 Merchant Finance 4.217 4.078 3%
50 Patan Finance  10.146 3.126 225%
51 Swastik Merchant Finance 4.419 -3.179 239%
52 United Finance  37.024 24.31 52%
53 Gorkha Finance  7.072 1.567 351%
54 NIDC Capital Markets  44.781 14.721 204%
55 Central Finance 20.141 15.366 31%
56 Paschimanchal Finance 22.509 12.886 75%
57 Shubhalaxmi Finance  7.921 -4.12 292%
58 Unique Finance  5.627 -0.909 719%
Total 1,036.84 507.95 25474%
Average 17.88 8.76 439%

The net profit growth on Quarter to Quarter as of second quarter (Exclusive Analysis @ ResCon) showed that the finance companies group’s profit had increased by 174% on an average. Find the report here. Earlier we had also performed a research on the profit figures of commercial banks and development banks which too showed the similar story.

Hence from the analysis of profit figures of commercial banks, development banks and finance companies, it is evident that Nepalese service sector is performing well even during thes difficult times. Boom in realty sector, good inflow of remittance, increased exposure to hydropower sector, quality of loans (those not deemed "BAD") in portfolio, focus on SMEs are some of the key factors that have played vital roles in improving the profit figures of these companies.

ResCon Tip-Off:

We know that there exists a strong positive correlation between Earnings and Market Share Price figures. That is, if earnings’ figure of a company increases, the share price of the company increases too. But in case of the Nepalese finance companies, such a phenomenon is not being witnessed. In spite of better performance, the share prices of most of the finance companies are down.

To summarize, if you are someone who follows Warren Buffett, you will certainly know that the market price of a company must always address its fundamentals. In our case, there are some good finance companies which are currently undervalued. These banks’ share prices will definitely go up in the future. All you need to do is put on your thinking cap and choose the correct bank to invest in.

Well if you think you need some professional help, let us know.