Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD
Research House: OSK
KUALA LUMPUR: OSK Research maintained its trading buy call on HONG LEONG BANK BHD [] at RM8.55 with target price RM8.80 as it expects the share price to continue to re-rate ahead of the completion of the groups value accretive acquisition of EON Capital.
The research house said it might raise its target price for the stock to RM9.55, depending on the level of subscription for its proposed rights issue, which will have an impact on its return on equity (ROE) projection.
"Although maximum subscription of the rights would slightly dilute the group's pro-foma ROE from 15.5% to 14.8%, the book value accretion would more than offset this dilutive impact.
"As such, there is high probability that we will upgrade our recommendation on the stock to buy post completion of its proposed acquisition of EONCap's asset and liabilities," it said.
Company Name: HONG LEONG BANK BHD
Research House: OSK
KUALA LUMPUR: OSK Research maintained its trading buy call on HONG LEONG BANK BHD [] at RM8.55 with target price RM8.80 as it expects the share price to continue to re-rate ahead of the completion of the groups value accretive acquisition of EON Capital.
The research house said it might raise its target price for the stock to RM9.55, depending on the level of subscription for its proposed rights issue, which will have an impact on its return on equity (ROE) projection.
"Although maximum subscription of the rights would slightly dilute the group's pro-foma ROE from 15.5% to 14.8%, the book value accretion would more than offset this dilutive impact.
"As such, there is high probability that we will upgrade our recommendation on the stock to buy post completion of its proposed acquisition of EONCap's asset and liabilities," it said.
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