Stock Name: AFG
Company Name: ALLIANCE FINANCIAL GROUP BHD
Hong Leong Investment Bank (HLIB) Research upgraded Alliance Financial Group Bhd to "buy" from "hold", after the company said it plans to dispose of a subsidiary.
Alliance Financial will sell its 70 percent stake in Alliance Investment Management Bhd (AIMB) for RM12.3 million, pending approval from the Securities Commission, the company said on Tuesday.
The stake in AIMB will be sold to Abu Talib Othman, who currently owns the remaining 30 percent.
Hong Leong said the sale would allow Alliance to focus on marketing other wealth management products and boost sales.
AIMB's revenue rose 11.1 percent to RM2.1 million last year, when it had RM2.3 billion in assets under management.
Alliance has also demonstrated strong asset quality and positive results from its new business strategies, the research house said. It said the stock has fallen 6.5 percent since Aug.
16, although the prospects have improved since then.
"Given that the potential upside is over 10 percent now, along with the expectation of a 4 percent dividend yield, we are compelled to upgrade our rating to 'buy'," Hong Leong said.
It maintained a fair value of RM4.53 for Alliance, which was trading at RM4.02. -- Reuters
Company Name: ALLIANCE FINANCIAL GROUP BHD
| Research House: HLG | Price Call: BUY | Target Price: 4.53 |
Hong Leong Investment Bank (HLIB) Research upgraded Alliance Financial Group Bhd to "buy" from "hold", after the company said it plans to dispose of a subsidiary.
Alliance Financial will sell its 70 percent stake in Alliance Investment Management Bhd (AIMB) for RM12.3 million, pending approval from the Securities Commission, the company said on Tuesday.
The stake in AIMB will be sold to Abu Talib Othman, who currently owns the remaining 30 percent.
Hong Leong said the sale would allow Alliance to focus on marketing other wealth management products and boost sales.
AIMB's revenue rose 11.1 percent to RM2.1 million last year, when it had RM2.3 billion in assets under management.
Alliance has also demonstrated strong asset quality and positive results from its new business strategies, the research house said. It said the stock has fallen 6.5 percent since Aug.
16, although the prospects have improved since then.
"Given that the potential upside is over 10 percent now, along with the expectation of a 4 percent dividend yield, we are compelled to upgrade our rating to 'buy'," Hong Leong said.
It maintained a fair value of RM4.53 for Alliance, which was trading at RM4.02. -- Reuters
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