Bursa Malaysia Stock Watch
CIMB Group (Hold) - Opportunistic Buy For The Next Leap
kltrader
Publish date: Tue, 03 Apr 2012, 09:37 AM
kltrader
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CIMB Group (Hold)
Opportunistic Buy For The Next Leap
- CIMB to acquire RBS' ECM, CF and cash equities businesses in 10countries APAC for ''173.9m cash or 1.07x P/NTA. After deducting ''13.8mpayment from RBS total payment reduces to ''160.1m or 0.98x P/NTA.
- Financials not available but CIMB expects marginal dilutive in FY12 andaccretive in FY13 with minimal impact on capital ratios given the highly liquidassets to be acquired.
- Opportunistic acquisition with good pricing in view of the currentfinancial crisis.
- Positive - immediately propel CIMB from an ASEAN to a number one APACbased IB player and immediately increase presence in most key markets inAPAC.
- Its M&A track record imply huge opportunity to replicate strengths(from both sides).
- While deal is relatively small, it is in position to take the next leapto enhance long-term returns and entrench presence in APAC.
- Maintain Hold.
- Target price maintained at RM7.78 (Gordon Growth with ROE of 16.3% andWACC of 10.5%).
Source: HLIB Research - 3 April 2012
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