Maybank Investment maintains Buy on CIMB on robust earnings


Cost management: CIMB is a stock loved by investors for its liquidity, but they are also quick to punish it at the slightest hint of bearish sentiment.

KUALA LUMPUR: Maybank Investment Research has maintained its Buy call on CIMB Group Holdings Bhd as it forecasts robusts earnings growth of 27%/16% in FY17/18E with an expected ROAE expansion to 10.6% in FY18 from 7.9% in FY16. 

Its target price remains unchanged at RM7.50 on a 2018 price-book value of 1.3x.

CIMB's earnings in the second quarter ended July 30, 2017, was up 26% year-on year(y-o-y) and took first half profit to RM2.16bil, accounting to 49% of Maybank Investment Research's and consensus full-year forecast.

Positives for the quarter include stable net interest margin (-1bp quarter-on-quarter) and ongoing cost control/positive JAWS. On the flip side, loan growth remains subdued, NOII contracted q-o-q in Q2 while credit costs were higher.

"Management’s targeted 9.5% ROE for FY17 does appear to be achievable and our forecast is a tad higher at 9.6% for the year. Into FY18, management targets an ROE of 10.5% to 11% and our forecast of 10.6% is at the lower end of this range. 

"Separately, management has announced a first interim dividend per share of 13 sen vs 8 sen in H1FY16, this being a dividend payout ratio (DPR) of 52%. We raise our FY17 DPS forecast to 26 sen from 25 sen, to reflect a higher DPR of 52% versus 50% previously. Forward yields of >3.9% provide support to share price," the research house said.

Subscribe or renew your subscriptions to win prizes worth up to RM68,000!

Monthly Plan

RM13.90/month

Annual Plan

RM12.33/month

Billed as RM148.00/year

1 month

Free Trial

For new subscribers only


Cancel anytime. No ads. Auto-renewal. Unlimited access to the web and app. Personalised features. Members rewards.
Follow us on our official WhatsApp channel for breaking news alerts and key updates!
   

Next In Business News

Lagenda Properties' unit secures contract worth up to RM99.6mil
Icon Offshore secures four key agreements to drive portfolio growth and expansion
RHB, CGC ink Malaysia’s first LCTF portfolio guarantee agreement, valued at RM400mil
Solarvest secures RM142mil solar EPCC contract in Kedah
Allianz Malaysia posts 7.4% lower earnings of RM183.17mil in 3Q
Tex Cycle eyes M&A, ESG market expansion
Ringgit retreats after three days of gains
Sarawak Plantation posts 14.5% profit jump in 3Q, declares 15 sen dividend
MAHB raises RM1.6bil in oversubscribed sukuk wakalah
MNRB appoints Rudy as interim president & CEO

Others Also Read