CYBG Plc

A Look at Recent Update: CYBG Plc (ASX: CYB) had come forward and made an announcement that Clydesdale Bank PLC had entered in the JV or joint venture with the Salary Finance Limited so that innovative channel to CYB’s personal lending business can be added. Clydesdale Bank happens to be the wholly owned subsidiary of CYB. The release stated that Clydesdale as well as Salary Finance would each be acquiring the 50% stake in the joint venture in return for initial cash amounting to £0.5 million each. Clydesdale will provide a 6-month rolling credit facility to the JV, subject to the ongoing fulfilment of the JV’s business plan.


Customer Balances (Source: Company Reports)

Also, CYB had delivered the results for the quarter ended December 31, 2018 and it stated that CYB commenced FY 2019 by having robust mortgage pipeline, along with the focus on the retention of the customer, gave the balanced growth of 1.5% in the quarter ended December 2018. CYB stated that momentum with respect to SME origination was sustained in the December 2018 quarter on the back of robust demand from SME customer base, with the drawdowns amounting to c£600 million as well as the net lending growth which stood at 1.2%.

What To Expect From CYB: CYBG Plc had stated that the political situation in the United Kingdom happens to be uncertain as well as the potential impact on economy of the United Kingdom is unclear. CYB added that it has been focusing towards unlocking opportunities from the acquisition of Virgin Money as well as delivering the margin as well as cost guidance for FY 2019. On the assumption of the broadly stable pricing environment, CYB stated that there are expectations that its NIM would be in the range of 165-170 basis points for FY 2019.

Also, the company stated that it is on the path to deliver the cost target of more than £950 million in FY 2019.

Stock Recommendation: On the daily chart of CYB, Moving Average Convergence Divergence or MACD has been applied and default values were used for the purposes. After careful observation, it was noticed that the MACD line has crossed the signal line and had trended in the upward direction. This signifies that the company’s stock might witness bullish momentum moving forward. As a result, we maintain our “Buy” rating on the stock at the current market price of A$3.530 per share.
 

Crown Resorts Limited

A Look at FY 2018 Results: Crown Resorts Limited (ASX: CWN) stated that they had witnessed net profit amounting to $326.7 million before the significant items which reflects the rise of 5.8% on the YoY basis. With respect to Crown Perth, normalised revenues amounted to $844.5 million which implies the rise of 1.7% and, as depicted in the annual report, main floor gaming witnessed the fall of 2.1%, VIP program play encountered the fall of 5.8% as well as non-gaming witnessed the rise of 12.5% largely because of full year impact of Crown Towers Perth which got opened in the month of December 2016.


Melbourne, Perth and Aspinalls Results (Normalised) (Source: Company Reports)

However, the company’s net margins are higher than the broader industry median which reflects the company’s strong capability to convert its top-line into bottom line as compared to the broader industry. In FY 2018, the company’s net margin was 16.4% while the industry median was 11%.

What Are CWN’s Major Focus Areas: Crown Resorts, in the 2018 AGM presentation, had stated that they would be focusing on improving underlying performance of Crown Melbourne as well as Crown Perth. Also, the company would be focusing on growing the Crown Digital which also includes wagering as well as online social gaming.   

Moreover, strong position of the net margins as compared to the industry media might attract the market players.

Stock Recommendation: On the daily chart of CWN, Moving Average Convergence Divergence or MACD has been applied and default values were used for the purposes. After observation, it was noticed that the MACD line has crossed the signal line and had trended in the upward direction. This suggests that the stock price might witness favourable momentum moving forward. Hence, we maintain our “Hold” recommendation on the stock at the current market price of A$12.190 per share (marginal up by 0.744% on 12 February 2019).
 

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