Maintain Hold and target price. 9MFY12 results were in line with core net profit down 13% YoY as net loans contracted 18% YoY due to the ceasation of KOWAJA lending activities for 6+ months. A 1-for-2 bonus and 2-for-5 rights issue of new RCPS will raise shares liquidity and give RCE the capacity to grow. Nonetheless, the operating environment remains tough with net loans continuing to retrace 2% QoQ despite the resumption of KOWAJA lending activities since Jun 2011. Our target price continues to peg the stock to 0.8x historical P/B.

Maybank Research 15 Feb 2012

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