Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD
Research House: ECMLIBRA
Company Name: HONG LEONG BANK BHD
Research House: ECMLIBRA
Hong Leong Bank Bhd rose to a record in Kuala Lumpur trading after reporting a 27 per cent leap in third-quarter earnings and analysts upgraded their forecasts to reflect higher future profits following its RM5.06 billion (US$1.7 billion) takeover EON Capital Bhd.
The stock climbed 3.8 per cent to RM11.94 at 10:53 a.m. local time, bringing its total gains for the week to 14 per cent since completing its EON takeover on May 6. Hong Leong Financial Group Bhd., its parent, has surged 11 per cent this week, adding 3.2 per cent today to RM11.50.
Hong Leong Bank’s net income climbed to RM289.7 million, or 19.95 sen per share, in the three months through March from RM228 million, or 15.73 sen a year ago, the Kuala Lumpur-based lender said in an exchange filing late yesterday. Earnings were bolstered by higher net interest income as Malaysia’s economy continues to expand, it said.
“The economic environment remains conducive to growth,” Chief Executive Officer Yvonne Chia said in the statement. “We fully expect Hong Leong Bank’s growth momentum to continue.”
The merged group will have combined assets of more than RM140 billion, with a branch network of about 300 branches and 1,200 self-service terminals. The takeover, 17 months in the making, will see Hong Leong Bank overtake rival AMMB Holdings Bhd and RHB Capital Bhd in terms of market capitalization, according to data compiled by Bloomberg.
ECM Libra Capital Sdn Bhd upgraded Hong Leong Bank to “buy” from “hold” today, increasing its share estimate to RM13.62 from RM10.92 to reflect future EON earnings contributions, analyst Bernard Ching said in a report today.
EON Impact
“While the results are within expectations, we will be upgrading our estimates to incorporate the effect of the completion of EON Capital’s assets and liabilities,” Ching said in the report.
RHB Research Institute Sdn Bhd raised its fair value to RM14 from RM12.70, analyst David Chong wrote in a separate report today. UOB Kay-Hian Holdings, HwangDBS Vickers Research Sdn Bhd and AmResearch Sdn Bhd raised their forecasts earlier in the week.
Hong Leong Financial yesterday provided a RM2.3 billion bridging loan to Hong Leong Bank to boost its capital adequacy ratio pending completion of a planned rights issue.
Hong Leong Bank said in a separate statement that it plans to increase the size the rights offer to as much as RM2.6 billion from RM1.6 billion to strengthen its capital base and fund working capital.
Malaysia’s economy is forecast by the government to grow as much as 6 per cent this year following a 7.2 per cent expansion last year, the most in a decade. The central bank raised its benchmark overnight policy rate by 0.25 percentage point to 3 per cent on May 5 to fight inflation. -- Bloomberg
The stock climbed 3.8 per cent to RM11.94 at 10:53 a.m. local time, bringing its total gains for the week to 14 per cent since completing its EON takeover on May 6. Hong Leong Financial Group Bhd., its parent, has surged 11 per cent this week, adding 3.2 per cent today to RM11.50.
Hong Leong Bank’s net income climbed to RM289.7 million, or 19.95 sen per share, in the three months through March from RM228 million, or 15.73 sen a year ago, the Kuala Lumpur-based lender said in an exchange filing late yesterday. Earnings were bolstered by higher net interest income as Malaysia’s economy continues to expand, it said.
“The economic environment remains conducive to growth,” Chief Executive Officer Yvonne Chia said in the statement. “We fully expect Hong Leong Bank’s growth momentum to continue.”
The merged group will have combined assets of more than RM140 billion, with a branch network of about 300 branches and 1,200 self-service terminals. The takeover, 17 months in the making, will see Hong Leong Bank overtake rival AMMB Holdings Bhd and RHB Capital Bhd in terms of market capitalization, according to data compiled by Bloomberg.
ECM Libra Capital Sdn Bhd upgraded Hong Leong Bank to “buy” from “hold” today, increasing its share estimate to RM13.62 from RM10.92 to reflect future EON earnings contributions, analyst Bernard Ching said in a report today.
EON Impact
“While the results are within expectations, we will be upgrading our estimates to incorporate the effect of the completion of EON Capital’s assets and liabilities,” Ching said in the report.
RHB Research Institute Sdn Bhd raised its fair value to RM14 from RM12.70, analyst David Chong wrote in a separate report today. UOB Kay-Hian Holdings, HwangDBS Vickers Research Sdn Bhd and AmResearch Sdn Bhd raised their forecasts earlier in the week.
Hong Leong Financial yesterday provided a RM2.3 billion bridging loan to Hong Leong Bank to boost its capital adequacy ratio pending completion of a planned rights issue.
Hong Leong Bank said in a separate statement that it plans to increase the size the rights offer to as much as RM2.6 billion from RM1.6 billion to strengthen its capital base and fund working capital.
Malaysia’s economy is forecast by the government to grow as much as 6 per cent this year following a 7.2 per cent expansion last year, the most in a decade. The central bank raised its benchmark overnight policy rate by 0.25 percentage point to 3 per cent on May 5 to fight inflation. -- Bloomberg
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