STOCK FOCUS OF THE DAY
CIMB Group : Non-interest income picking up pace BUY
We maintain our BUY call on CIMB Group Holdings (CIMB), with an unchanged fair value of RM6.60/share. Our fair value is based on FY18F ROE of 10.5% leading to a P/BV of 1.2x. Post-3QFY17 results, we have fine-tuned our net profit forecast for FY17/18/19 by 0.2%/2.0%/3.2% respectively after factoring in higher estimates for Islamic banking income and credit cost.
3QFY17 core net earnings grew modestly by 2.7%QoQ to RM1.13bil, underpinned by higher total income and lower provisions for loan impairment. 9MFY17 net profit surged26.0%YoY to RM3.42bil. This was driven by higher non-interest income (NOII) and net interest income (NII) on the back of higher NIM and decent loan growth. Cumulative earnings were within expectations, making up 80.0% of our and 76.6% of consensus estimates respectively. Annualised ROE for 9MFY17 was 9.7%. Group CET1 ratio improved 10bps QoQ to 12.0% as at the end of 3QFY17. It continued to be on track to meet its FY17 target of >11.5%. No dividend has been proposed in 3QFY17.
Others :
Axiata Group : Triple focus on convergence, digitalisation and towers BUY
IJM Corp : 1HFY18 core net profit eases 3% YoY BUY
Pecca Group : Sales to OEM to rebound from 2Q BUY
CB Industrial : Order book shrinks HOLD
IJM Plantations : Sharp erosion in operating profit margin HOLD
Media Chinese : No signs of sustainable recovery yet HOLD
Ta Ann : Plantation drives 3QFY17 earnings HOLD
Tan Chong Motor : Losses pile up HOLD
UMW Holdings : Still finding its sea legs HOLD
AMMB : Stable GIL ratio with net write-backs in provisions NON-RATED
STOCKS ON RADAR
Padini Holdings, Press Metal, V.S. Industry, ViTrox Corporation
ECONOMIC HIGHLIGHT
US : December rate hike looks cemented
NEWS HIGHLIGHTS
Gamuda : Gamuda teams up with MRCB for HSR
Property Sector : High-end property in ‘a bit of a glut’—MBSB
Notion VTec : Fire-affected Notion VTec kicks off recovery plan, defers paying dividend
Latitude Tree : Sees another challenging year ahead
DISCLAIMER:
The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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