I like the difficult reforms Jokowi has pushed through, and it appears that Indon may outgrow Malaysia in the future. The tax amnesty it undertook will bring in a flood of money, and if Jokowi plays his cards right, all these money will go to fund infrastructures that Indonesia badly needs. Banking as a bellwether of the economy will likely benefit.
Investment must now capitalize on those countries that have potential of high GDP such as Philipines and Indonesia and Vietnam etc..Public Bank, CIMB and Maybank are supposed to be considered as they have branches there.
Thus there is no doubt Maybank and CIMB subsidiaries in Indonesia are doing very well from the recent announced quarter results for instance. The trend could be continue for many years to come.
CIMB is definitely worthy to be take note. Personally, I am more bullish on its upcoming 2Q but less bullish on its target price. If you look in details, their non-interest income dip a lot (almost Rm200m) compared to previous quarters due to trading losses but still their profit is stable. If all else maintain, non-interest income back to normal plus Indon, I think Rm1 bil is reasonable. But I think its price should trade between RM4.85-RM5.40 for the next 6 months mainly bcos the ROE has came down a lot since their good days and sentiment on the banking industry is not great
AmBank has a much better valuation than CIMB and also low exposure to Indonesia & Thailand. Poor yields in O&G, Plantation & Coal mines will continue to affect banks in general for next few qtrs...
Thanks Icon for your sharing again... But I see 2 potential risks which may be quite averse to CIMB: 1) Non-Niaga net profit has been deteriorating since the past 3 quarters, from 778million to 752millions and then to 731millions. 3 consecutive quarters of poorer results. So it may not be correct to use the average of previous 3 quarters to arrive at 754million net profit. You see each quarter the net profit reduced by 21-26milions. So I expect non-niaga profit for Q2 maybe 731-(21-26million) = 705-710million instead of 754millions. 2) Yes, Niaga net profit has improved over the past 3 quarters. But the weightage is around 83/731=11% for the whole CIMB group... even if Niaga profit increases by 50million, it can be easily wiped out by non-Niaga profit that is reducing.
Conclusion: recent cut of OPR will definitely reduce profitability for banks (including CIMB) so i expect poorer net profit in Malaysia... and since non-Niaga profit is still a doubt (and has a high chance of getting worse), i dun see how Niaga profit (with small weightage) will help improve the overall CIMB group's profit...
just my 2 cents and I could be wrong... enjoy investing though, cheers...
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 4511 views | 4 d ago
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New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Icon8888
18,658 posts
Posted by Icon8888 > 2016-07-30 14:51 | Report Abuse
Thanks fortunebullz for your input