KUALA LUMPUR: AFFIN HOLDINGS BHD [] shares rose in early trade on Tuesday, Aug 16 after it reported a stronger set of earnings in the second quarter ended June 30, 2011.
At 9.03am, Affin was up seven sen to RM3.20 with 41,500 shares done.
On Monday, the banking group said its 2Q net profit rose 20.1% to RM134.19 million, due mainly to increase in both net interest income and Islamic banking income. Revenue for the quarter rose to RM642.77 million from RM534.61 million in 2010. Earnings per share was 8.98 sen while net assets per share was RM3.64.
For the six months ended June 30, Affin's net profit slipped to RM240.25 million from RM247.04 million in 2010, on the back of a 20% increase in revenue to RM1.26 billion.
However, CIMB Equities Research said it was maintaining its Underperform rating on Affin. It added Affin's results at the midway stage met expectations as 1H11 net profit eased 2.7% and worked out to 48% of its full-year forecast and 47% of consensus estimates.
The research house said it retained its EPS forecasts and DDM-based target price of RM3.40.
CIMB Research said the weak 1H performance, characterised by decelerating loan growth and margin erosion, underpinned its decision to maintain its Underperform rating.
'The stock could be de-rated by the (1) continuing loan growth slippage, (2) wider-than-expected margin contraction, and (3) weak non-interest income growth. We prefer Maybank (Outperform),' it said.
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