• Profile. RHBBank (41% owned by EPF) is the 4 th largest fully integrated financial services group in Malaysia. Its core businesses are streamlined into seven main business pillars, namely Group Retail Banking, Group Business & Transaction Banking, Group Wholesale Banking, Singapore Business Operations, Group Shariah Business, Group International Business and Group Insurance. The Group’s regional presence now spans ten countries including Malaysia, Singapore, Indonesia, Thailand, Brunei, Cambodia, Hong Kong, Vietnam, Laos and Myanmar.

• HLIB has a BUY rating with TP of RM6.00, or 11.1% upside. RHB Bank remains an Add and our top pick for the sector, premised on (1) attractive valuations, currently at 2018E P/E of 9.7x (22% lower against industry 12.4x) and P/BV of 0.93x (32% discount against peers 1.37x) , and (2) the expected benefits from its ongoing transformation programme and the end of impairment, which reinforce our projected FY17-19 EPS CAGR of 14%.

• Bullish double bottom pattern. The stock has been gyrating within its upward channel. Following the double bottom formation and strong breakout above neckline resistance near RM5.29 (21 Sep high) coupled with closing above key multiple SMAs, we are positive that RHBBANK’s share prices could stage a follow-through rally towards RM5.51 (27 Feb high). A strong breakout above RM5.51 will spur prices to test 52-week high at RM5.61 (2 Feb) before reaching our LT objective at RM5.87 (double bottom breakout measurement). On the flip side, failure to hold near RM5.23 (50d SMA and support trendline) may weaken share prices lower towards RM5.00-5.11 zones. Cut loss at RM5.14.

Source: Hong Leong Investment Bank Research - 7 Mar 2018