JMMB Investments (T&T) LIMITED 169 Tragarete Road Port Of Spain Tel: 1 ( 868 ) 224-5662, 224-5663, 224-5664, 627-1155 Fax:1 (868) 224-5666 Email: jmmbinvestmentsttresearch@jmmb.com A MEMBER OF THE JMMB GROUP RFHL records marginal improvement in profit despite the uncertainty amid COVID-19's Omicron Variant For the Qtr Ended For the Qtr Ended RFHL's Financial Summary $ change % change 31-Dec-21 31-Dec-20 TT$'000 TT$'000 TT$'000 Valuation Income Statement Extract Current Price TT$142.86 Profit attributable to equity holders 395,867 391,134 4,733 1.2% Trailing P/E Multiple 17.75x Earnings per share 2.43 2.41 0.02 0.8% Market to Book Value 1.78x Dividend per share (in $ per share) -$ -$ - 0.0% JMMB New Target Price TT$136.08 Dividend Yield N/A Balance Sheet Extract Total Assets 111,932,757 104,664,389 7,268,368 6.9% Total Liabilities 99,081,534 93,274,192 5,807,342 6.2% Shareholder's Equity 12,851,223 11,390,197 1,461,026 12.8% Cash Flows Extract Net cash from operating activites 2,014,799 179,276 1,835,523 1023.9% Net cash used in investing activites (913,915) (405,345) 508,570 -125.5% Net cash used in financing activites (549,802) (824,815) (275,013) 33.3% Cash and cash equivalents 16,818,019 15,705,264 1,112,755 7.1% Metrics Book Value Per Share 78.71 69.76 8.95 12.8% Market Price 140.16 134.99 5.17 3.8% Market to Book Ratio 1.78 1.94 -0.15 -8.0% Note: Green arrows indicate growth while red indicate contractions For the quarter ended December 31st, 2021, Republic Financial Holdings Limited (RFHL) recorded a 1.2% increase in profit attributable to equity holders to $395.9 million from $391.1 million in the corresponding prior period. For the period, Net Interest Income (NII) increased by 1.6%, driven by a 1.65% increase in advances. Furthermore, profit after tax increased 1.9%, driven by a 2.3% increase in other income and a reduction in credit loss expenses by 9% to $35.8 million from $39.3 million. This translates into a basic EPS of $2.43 at the end of the period. At a price of $142.86, RFHL’s trailing P/E is 17.8 times, this is below the sector’s average of around 23 times. According to the Chairman's statement, the Q1 2022 performance was marked by an upsurge in COVID - 19 infections in territories the Group operates following the emergence of the Omicron variant. This increased uncertainty and reduced productivity due to staff absences and self - imposed lockdowns, coupled with the impact of global supply chain disruptions, dampened expectations for a robust recovery of economic activity during the quarter. Nevertheless, total assets increased 6.9% to $111.9 billion from $104.7 billion in the corresponding prior period. Outlook: In November 2021, JMMB's Research Department recommended a MARKETPERFORM (5% of your portfolio) rating on RFHL with a price target of $128.48. The price of RFHL at that date was $137.53, which was within our fair value range. Since that rating, RFHL's share price reached a high of $148.98 and closing at $142.86 as at February 4th, 2022 . We maintain our rating on RFHL at MARKETPERFORM (5% of your portfolio) with a revised target price of $136.08 (4.75 % below the current price). The increase in the target price is based on an expected increase in earnings for the Group for the year ending 2022 . The Group continues to focus on streamlining its business operations. In September 2021, RFHL announced that they have entered the life insurance business through Republic Life Insurance Company Ltd. In November 2021, the Group announed the sale of Republic Funds (Barbados) Inc, this will now enable the Group to focus on its core business of commercial banking in that territory. The EPS forecast for year ended September 2022 is $9.01. Image result for jmmb investments Quarterly Update Overvalued Fairly valued Undervalued C:\Users\Daniel\Downloads\Logomakr_56PExN.png February 2022 Laura Rajcoomar Investment Analyst laura_rajcoomar@jmmb.com TT$122.47 TT$149.69