Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research is maintaining a Buy call on CIMB and raised TP to RM10.10, implying 2.7x CY11 BV ' a value proxy to the healthy capital markets, regional exposure, and cheaper alternative to Indonesia banks.
The research house said on Monday, Nov 22 that CIMB regularly wins a sizeable share of corporate deals with its excellent track record in investment banking. It tops in equity and debt issuance with 27% and 36% of domestic market share. Regionally, CIMB is expanding its footing in Singapore and Indonesia, especially in broking and equity issuance.
Upcoming major deals for CIMB include the IPO of Petronas Chemical (c.RM12.8bn) and financing for the RM40bn MRT project. We expect more upside in underwriting commission, corporate advisory and placement fees, and raised FY10-12F earnings by 3-4% to reflect higher non-interest income.
'CIMB is well-capitalized at 14% Tier-1 CAR and 15% RWCAR, and would not need to raise additional equity to comply with Basel III rules at this juncture. This gives leeway to CIMB to consider a higher dividend payout than the current 18.5 sen (31% payout). Our sensitivity analysis shows that for every 10% increase in payout, Tier-1 and RWCAR would fall by 20 bps but ROE would rise by 20 bps,' it said.
Company Name: CIMB GROUP HOLDINGS BERHAD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research is maintaining a Buy call on CIMB and raised TP to RM10.10, implying 2.7x CY11 BV ' a value proxy to the healthy capital markets, regional exposure, and cheaper alternative to Indonesia banks.
The research house said on Monday, Nov 22 that CIMB regularly wins a sizeable share of corporate deals with its excellent track record in investment banking. It tops in equity and debt issuance with 27% and 36% of domestic market share. Regionally, CIMB is expanding its footing in Singapore and Indonesia, especially in broking and equity issuance.
Upcoming major deals for CIMB include the IPO of Petronas Chemical (c.RM12.8bn) and financing for the RM40bn MRT project. We expect more upside in underwriting commission, corporate advisory and placement fees, and raised FY10-12F earnings by 3-4% to reflect higher non-interest income.
'CIMB is well-capitalized at 14% Tier-1 CAR and 15% RWCAR, and would not need to raise additional equity to comply with Basel III rules at this juncture. This gives leeway to CIMB to consider a higher dividend payout than the current 18.5 sen (31% payout). Our sensitivity analysis shows that for every 10% increase in payout, Tier-1 and RWCAR would fall by 20 bps but ROE would rise by 20 bps,' it said.
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