MONEY MASTER

Maintain OUTPERFORM  with unchanged target price (TP) of R17.76 9M17 CNP came in within expectations. Absence of dividend was expected. No changes made to our earnings estimate. It remains as our most preferred name in the NBFI space given its: (i) resilient earnings prospects on healthy gross financing receivables growth of 8-9%, (ii) decent asset quality with NPL at low 2-3%, (iii) healthy CAR of c.19%, (iv) high ROE of >20% as well as (v) decent yields of 4.5-4.8%. Moreover, valuation is still undemanding at 8.0x FY18E PER. Maintain OP with an unchanged TP of RM17.76. Within expectations.  The group reported 3Q17 core net profit (CNP) of RM63.4m (+22% QoQ; +27% YoY), widening its 9M17 CNP to RM174.5m (+17% YoY) which made up 72% of both our and consensus full-year forecasts. Note that the group’s 4Q is the seasonally strongest quarter. As expected, no dividend was declared. We are expecting the group to declare a total net DPS of 64.0 sen for FY17. ...

Maintain BUY with unchanged target price (TP) of RM1.08 MBSB has received approval from Bank Negara Malaysia (BNM) to commence negotiations on a proposed merger We are positive on the ongoing development towards becoming a full-fledged Islamic bank We maintain our earnings forecast at this juncture Hence we reaffirm our BUY recommendation with an unchanged TP of RM1.08 NEWS MBSB gets nod for negotiations on a proposed merger.  MBSB yesterday has received a letter from BNM dated 21 December 2016 which states that BNM has no objection in principle for MBSB to commence negotiations with the existing shareholders of Asian Finance Bank Berhad (AFB) namely Qatar Islamic Bank, RUSB Investment Bank Inc, Tadhamon International Islamic Bank and Financial Assets Bahrain WLL for a proposed merger of MBSB and AFB. BNM requires that the negotiations be completed within six months from the date of BNM’s letter. OUR VIEW Positive on the proposed merger. ...

Retain NEUTRAL with unchanged target price (TP) of RM5.25 The Group made an overnight announcement that its 99.99%-owned subsidiary CIMB Bank has entered into a sale and purchase agreement with the Employees Provident Fund (EPF) for the sale of equity interests in two private equity closed end real estate funds (AOF1 and AOF2) for a collective amount of AUD37.1m (c. RM122.8m). While this move is positive from a cash-raising standpoint, impact to earnings is negligible. With cost and asset quality management being the key priorities in the near to medium term, coupled with the challenging market environment, we are not likely to see overly exciting growth numbers in the near term. Our  Neutral  call is maintained with an unchanged target price of  RM5.25  on expectation of trading still being range-bound amid the lack of near-term catalysts. We see fundamentals of the Group improving over the longer given its on-going initiatives but would only suggest...

Retain HOLD with unchanged target price (TP) of RM2.12 Results Above expectations.  Reported 3Q16 net profit of RM141m (+38.1% YoY, +2.9% QoQ), bringing 9M16 net profit to RM394.3m (+45% YoY). This is marginally ahead of HLIB full year forecast (81.8%) but well above consensus forecast (86.8%). Deviations Slower provision. Dividend Declared 1st interim dividend of 3 sen vs. 2.99 sen in 9M15, translating into RM58.3m or 15% payout ratio. Highlights 3Q16…  Net profit grew strongly to RM141.4m (+38.1% YoY, +2.9% QoQ) on the back strong contribution from NOII of RM170m (+14.2% YoY, +3.6% QoQ), driven mainly by sales of financial instruments. Provisions continued to slow to - RM3.5m due to higher CA writeback and slower IA which offset the slower recoveries. 9M16…  Net profit surged to RM394.3m (+45% YoY) chiefly due to reversal of provision amounting -RM4.1m (-97.6% YoY). Decline in provisions was attributed to lower IA of RM47.8m (-377% ...

Maintain Neutral, Public Bank as top pick The 4Q15 results season, while mixed, reinforces our view that sector ROE has yet to bottom out with most banks guiding for lower ROEs ahead. We continue to see a challenging environment ahead for banks with: i) asset growth likely constrained by tighter liquidity and soft macroeconomic conditions, ii) NIMs still under pressure, iii) capital markets yet to recover meaningfully, and iv) higher credit costs ahead – all of which should keep bottomline growth muted, in our view. We keep our NEUTRAL sector call. Banking sector 4Q15 a mixed quarter for the banks . Three out of the seven banking stocks that we cover reported results that were in line with our estimates. Affin and Hong Leong Bank (HL Bank) both missed our and consensus estimates with the main variances being weaker-than-expected associate contribution (Affin and HL Bank) and lower-than-expected net interest margin (NIM) (HL Bank). CIMB’s results were in line with our expe...