RHB Research - Banking Sector Update

Stock Name: PBBANK
Company Name: PUBLIC BANK BHD

Research House: RHB

Price Call: BUY

Target Price: 16.07

Stock Name: MAYBANK
Company Name: MALAYAN BANKING BHD

Research House: RHB

Price Call: BUY

Target Price: 10.11

Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD

Research House: RHB

Price Call: HOLD

Target Price: 8.05

Stock Name: AMMB
Company Name: AMMB HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 6.75

Stock Name: AFFIN
Company Name: AFFIN HOLDINGS BHD

Research House: RHB

Price Call: HOLD

Target Price: 3.33

Stock Name: HLBANK
Company Name: HONG LEONG BANK BHD

Research House: RHB

Price Call: SELL

Target Price: 12.11

Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD

Research House: RHB

Price Call: SELL

Target Price: 3.85

Sector Update

Banks ' Feb '12 system data ' Leading indicators for households improved mom                    Neutral

Sector Update

Public Bank ' Fair value at RM16.07 (from RM15.00)                                                     Outperform

Maybank ' Fair value at RM10.11 (from RM9.44)                                                           Outperform

CIMB ' Fair value at RM8.05 (from RM7.47)                                                            Market Perform

AMMB ' Fair value at RM6.75 (from RM6.23)                                                           Market Perform

Affin ' Fair value at RM3.33 (from RM3.16)                                           Market Perform (Upgraded)

HL Bank ' Fair value at RM12.11 (from RM11.18)                                                      Underperform

AFG ' Fair value at RM3.85 (from RM3.69)                                                                Underperform

MBSB ' Fair value at RM2.46 (from RM2.34)                                                           Market Perform

RCE ' Fair value at RM0.57                                                                                    Market Perform

-          Feb '12 system loan growth moderated further to +11.9% yoy but was up 0.4% mom, as compared to Jan '12 loan growth of +12.1% yoy/-0.2% mom. Loan growth for both businesses and households moderated further to 11.7% yoy and 12.1% yoy, from 11.8% yoy and 12.3% yoy respectively in Jan '12.

-          We raised our benchmark PER to 15x from 14x, which broadly lifts our fair value estimates for our coverage by 4-10%. However, our Neutral stance is unchanged with Maybank and Public Bank as our top picks for the sector.

 

Source: RHB Research - 2 April 2012