AFFIN (5185) : HLIB Research maintains Hold on Affin, lowers target price to RM2.90
KUALA LUMPUR (Nov 25): Hong Leong IB Research (HLIB) has maintained its Hold rating on Affin Holdings Bhd with a lower target price of RM2.90 (from RM3.44) and said Affin’s 9MFY14 results came below HLIB and consensus expectations mainly due to higher-then-expected overheads.
In a note Tuesday, the research house said additional RM24.1 million integration cost (IC) in 3Q, on top of RM9.6 million in 2Q. Excluding IC, overheads still jumped 9.5% quarter-on-quarter (q-o-q), it said.
HLIB said Affin’s interim dividend of 15 sen was in line with its dividend policy of 50%.
The research house said 3QFY14 was stronger q-o-q due to acceleration in loans growth, higher NIM, higher non-interest income and lower provision. Partly offset by higher overheads.
“Year-to-date integration cost RM33.7 million, remaining RM20.3 million over next 9-15 months based on guidance of RM54 million total. Impaired loans ratio stable albeit rise in absolute amount.
“FY14 cut 11% while FY15-16 forecasts cut 6.4-6.5% to reflect higher cost and integration cost.
“Target price cut to RM2.90 (Gordon Growth with ROE at 8% and WACC at 9.3%) vs. RM3.44. Maintain Hold,” it said.
http://www.theedgemarkets.com
KUALA LUMPUR (Nov 25): Hong Leong IB Research (HLIB) has maintained its Hold rating on Affin Holdings Bhd with a lower target price of RM2.90 (from RM3.44) and said Affin’s 9MFY14 results came below HLIB and consensus expectations mainly due to higher-then-expected overheads.
In a note Tuesday, the research house said additional RM24.1 million integration cost (IC) in 3Q, on top of RM9.6 million in 2Q. Excluding IC, overheads still jumped 9.5% quarter-on-quarter (q-o-q), it said.
HLIB said Affin’s interim dividend of 15 sen was in line with its dividend policy of 50%.
The research house said 3QFY14 was stronger q-o-q due to acceleration in loans growth, higher NIM, higher non-interest income and lower provision. Partly offset by higher overheads.
“Year-to-date integration cost RM33.7 million, remaining RM20.3 million over next 9-15 months based on guidance of RM54 million total. Impaired loans ratio stable albeit rise in absolute amount.
“FY14 cut 11% while FY15-16 forecasts cut 6.4-6.5% to reflect higher cost and integration cost.
“Target price cut to RM2.90 (Gordon Growth with ROE at 8% and WACC at 9.3%) vs. RM3.44. Maintain Hold,” it said.
http://www.theedgemarkets.com
