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Share
Price:
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MYR6.55
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Target
Price:
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MYR7.00
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Recommendation:
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Hold
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Niaga: 2Q17
surprised positively
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Net interest margins (NIMs) continue to surprise on the
upside and we raise Niaga’s FY17/18 NIMs to 5.6% and 5.2% respectively,
from 5.3% and 5.1%. Correspondingly, Niaga’s FY17/18 net profit
forecasts are raised by 23%/10%, translating to a potential 4%/2%
uplift in CIMB Group’s earnings estimates. We maintain our CIMB Group
earnings forecasts for now, with an unchanged TP of MYR7.00 (FY18 P/BV
of 1.2x; ROE: 10.2%). HOLD.
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FYE Dec (MYR m)
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FY15A
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FY16A
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FY17E
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FY18E
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Operating income
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15,395.8
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16,065.3
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16,982.4
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17,970.3
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Pre-provision profit
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6,146.8
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7,413.6
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8,116.0
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8,834.7
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Core net profit
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3,411.2
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3,414.4
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4,393.8
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4,995.3
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Core EPS (MYR)
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0.40
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0.39
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0.50
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0.56
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Core EPS growth (%)
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5.6
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(2.4)
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26.1
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13.7
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Net DPS (MYR)
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0.14
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0.20
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0.25
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0.28
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Core P/E (x)
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16.3
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16.7
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13.2
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11.6
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P/BV (x)
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1.3
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1.3
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1.2
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1.2
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Net dividend yield (%)
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2.1
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3.1
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3.8
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4.3
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Book value (MYR)
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4.87
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5.24
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5.38
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5.66
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ROAE (%)
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8.7
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7.9
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9.5
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10.2
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ROAA (%)
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0.8
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0.7
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0.9
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0.9
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MACRO RESEARCH
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DOW JONES – Uptrend is intact
by Nik
Ihsan Raja Abdullah
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FBMKLCI fell 7.05pts to 1,760.03 yesterday, led by
declines in banking stocks. Market breadth was negative with losers
outpacing gainers by 586 to 309. A total of 1.93b shares worth
MYR2.58b changed hands. Expect negative spillover from yesterday’s
selloff while sentiment would remain cautious ahead of key US
economic data. Locally, investors may also adopt a “wait and see”
approach, pending more clarity on upcoming corporate results season.
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Nik Ihsan Raja
Abdullah
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Tee Sze Chiah
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NEWS
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Outside Malaysia:
U.S: Gain in pending home sales shows market is
stabilizing. A rebound in contract signings for the purchase of
previously owned U.S. homes shows housing demand is stabilizing after a
three-month downturn, National Association of Realtors figures released showed.
Index rose 1.5% after 0.7% drop. Gauge climbed 0.7% YoY from June 2016 on
unadjusted basis. Three of four regions showed month-over-month increase.
(Source: Bloomberg)
E.U: Inflation hits low bar as stimulus debate gets
closer. Mario Draghi kept expectations low for inflation this summer, and
July’s number is proving him right. Consumer-price growth in the euro
area stayed at 1.3% YoY -- enough to argue that deflation risks have
disappeared, but too little to meet the European Central Bank president’s
goal of just under 2%. While it confirms Draghi’s prediction that
inflation would remain near June levels in the coming months, it also
reinforces his assessment that, despite better economic growth, there
isn’t yet a self-sustained upward trend. (Source: Bloomberg)
U.K: Consumer confidence steadies after post-election
slump. U.K. consumers regained their footing after June’s inconclusive
election sent confidence to the lowest since the Brexit vote. An index of
consumer confidence rose to 107.3 in July, up from 107.1 the previous
month, according to a report from YouGov and the Centre for Economic and
Business Research. The report indicates a small improvement since the election
in which Prime Minister Theresa May lost her parliamentary majority,
albeit from a level that was only slightly higher than its
post-referendum low. (Source: Bloomberg)
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Other News:
Public Bank: Teh to step down as Public Bank chairman on
Jan 1, 2019. Teh will be bestowed the title of chairman emeritus on Jan
1, 2019 and appointed adviser. He will provide guidance to support the
continued growth of PBB and the PBB Group. It is unclear whether he will
remain on the board of directors. The details relating to the appointment
of the new chairman of PBB will be announced at an appropriate time.
(Source: The Sun Daily)
Mudajaya: Clinches MYR151.4m Rapid jobs from Petronas.
Petronas’ subsidiary PRPC Utilities and Facilities S/B has awarded
contracts worth MYR151.4m to Mudajaya Group to build utilities,
interconnecting and offsite (UIO) facilities in Pengerang, Johor.
Mudajaya’s unit Mudajaya Corp would construct a data centre and telecom equipment
room and electrical substation for the Refinery and Petrochemical
Integrated Development (Rapid) project (Project 1) as well as undertake
civil and infrastructure works at Area 8100 (Project 2). Project 1 is
targeted to be fully completed by July 2018 while Project 2 is expected
to be finished by March 2018. (Source: The Star)
Berjaya Corp: Calls off pharmacy chain JV with Australian
firm. Berjaya Corp (BCorp) has called off a proposed JV to operate a new
pharmacy chain with Australia-based CW Retail Asia Pty Ltd. All parties
have mutually agreed to terminate the proposed JV. No reason was
provided. (Source: The Edge Financial Daily)
ManagePay Systems: Appointed partner for foreigners
prepaid programme. ManagePay Systems (MPay) has received a letter of
appointment (LOA) from Majlis Pembangunan Ekonomi Malaysia (Mapem) to
appoint MPay as the partner and service provider of e-wallet and
MasterCard for the Mapem/MPay Prepaid MasterCard Programme to foreigners
in Malaysia. This programme has received full support from the Prime
Ministers's Office via a letter issued on July 17, 2017. MPay, being the
partner and service provider for Mapem/MPay Prepaid MasterCard Programme,
will provide foreigners with MPay Wallet mobile app on smart phone;
Physical MPay MasterCard Prepaid Card; salary crediting program; and
remittance services. (Source: The Sun Daily)
Palette Multimedia: Aborts plan to acquire majority stake
in Genopharma. Palette Multimedia has aborted its plans to acquire 51%
equity interest in Genopharma S/B (GSB). It has decided to not proceed
with the proposed acquisition as the current financial performance of GSB
is below expectation. (Source: The Sun Daily)
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