Company Name: CIMB GROUP HOLDINGS BERHAD
Research House: OSK
KUALA LUMPUR: OSK Investment Research has maintained its buy call on CIMB Group Holdings Bhd at RM14.22 and raised its target price to RM15.75 (from RM14.90) and said the banking group was on track to hit its return on equity (ROE) targets due to a robust capital market and steady net interest margins.
It said CIMB's ROE targets of 18% to 20% versus OSK Research's 15.7% and consensus' 16.4% implied that the market may not have factored in any capital management upside.
"The stock currently trades at an undemanding 12.7 times FY11 PER and 1.9 times FY11 PBV.
"We have raised our fair value from RM14.90 to RM15.75 on rolling forward our Gordon growth derived valuations to FY11 based on 2.20 times FY11 PBV and an estimated ROE of 15.7%," it said.