Highlights

CIMB Group Holdings Bhd - Undemanding valuation

Date: 29/04/2019

Source  :  Rakuten
Stock  :  CIMB       Price Target  :  6.10      |      Price Call  :  BUY
        Last Price  :  5.22      |      Upside/Downside  :  +0.88 (16.86%)
 


The recent infra projects newsflow is unlikely to shift CIMB’s loan target of +6% YoY, but credit costs and NIM compression should be on target, with fee-based income expected to improve QoQ (albeit coming from a low base). BUY with a TP at RM6.10 based on an unchanged target PBV of 1.04x. Valuations are undemanding; with potential returns exceeding 10% coupled with a decent dividend yield of 4.3%.

Despite recent developments in the domestic front (resuscitation of several infra projects), management maintained its FY19E loan target of ~+6% (Malaysia at +6-7% and Indonesia at ~5%) with a pickup in domestic corporate loans expected by 4Q19/1Q20. In the meantime, the Group’s credit demand will be supported from the consumer side. Management highlighted that infra/construction pick-up will be not be a game-changer for the Group for 2019 as management expects CIMB to benefit only by end 2019 onwards.

Niaga’s credit demand will still be supported from the consumer segment as mortgages booking are looking strong supported by resurgent demand for auto-loans which is expected to come in by 3Q19. Management also guided that Niaga will benefit slightly from expected ramp-up in infrastructure spending with recent conclusion of the Indonesian Presidency election.

No change for Group’s NIM (net interest margin) as guided before (5-10bps) compression with Niaga’s NIM expected to ~5% with Malaysia’s NIM at a 5-10bps compression.

Activities from treasury & capital markets expected to be better in 2H19 (coming from a low base). Credit costs are expected as guided (40-50bps) as management does not expect significant provisioning ahead. Niaga’s provisioning are looking likely less thus FY19E credit costs are expected in the range of 140-150bps (from the previous guided 150- 200bps).

Source: Rakuten Research - 29 Apr 2019

Share this
Labels: CIMB

Related Stocks

Chart Stock Name Last Change Volume 
CIMB 5.22 -0.04 (0.76%) 1,200,100 

  Be the first to like this.
 


 

280  220  522  1150 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 IWCITY 1.04-0.06 
 BORNOIL 0.0450.00 
 EKOVEST 0.8450.00 
 HSI-H6Q 0.285-0.035 
 HSI-C5J 0.32+0.05 
 DAYANG 1.16+0.09 
 PERDANA 0.345+0.025 
 HSI-H6N 0.08-0.02 
 GREATEC 0.945-0.02 
 MESTRON 0.155-0.005 

TOP ARTICLES

1. LETS CLIMB THE MOUNTAIN TOGETHER !!! Bursa Master
2. Any Good News In IWCITY AGM? Merger? Payment Done? Please Comment at Here! Thanks KL Glory Fury
3. GREATEC = GREAT-TRAP OR GREATER FOOL TRAP? SEE ARTICLE BY DR NEOH ON GREATER FOOL, Calvin Tan comments THE INVESTMENT APPROACH OF CALVIN TAN
4. [转贴] 斤经济较:TOPGLOV 2019Q3 季报点评 - 夜月 Good Articles to Share
5. Citi downgrades AirAsia Group to sell; price target RM1.48 Good Articles to Share
6. Tech: Going C2C and cross-border, Teleport plans to shake up the logistics business Good Articles to Share
7. Stock to Watch 20 Jun 2019 Stock Recommendations for Daily
8. [转贴] [Facebook live:浅谈Mestron holdings berhad (Mestron)] - James的股票投资James Share Investing James的股票投资James Share Investing
Partners & Brokers