InvestIdeas

Not vested

Valuation/Recommendationï‚·

Maintain BUY with target price of RM9.90, based on 15x 2012F PE or P/B of 2.6x, or 1SD of 10-year forward P/B of 2.3x.

We like CIMB for its strong market positioning in investment banking to capture the rising capital and debt market deals, and its wide branch network with aggressive marketing to capture a larger commercial market share.


Share Price Catalyst

Stronger-than-expected capital market boosting fee income growth.
Potential earnings accretion acquisition.

Source: UOBKH

http://research.uobkayhian.com/content_ ... 5a675188e8

Not vested

CIMB Group Holdings [CIMB MK] - Buy : Holding out for a better 2H( RM8.27 / PT: RM9.7 ) by Julian Chua

CIMB's 1Q11 somewhat disappointing results are attributable to the weak capital markets in 1Q11 and seasonally slower revenues from the CIB business.

The poor YTD share price performance (-3% versus KLCI +1%) appears to be discounting the results.

We are maintaining our forecasts for now in anticipation of a stronger corporate deal pipeline and loan activity.

Management is sticking to its 17% ROE target for FY11F, whereas we are about 5% higher at 18%. Maintain BUY.


Source: Nomura

If I recall, CIMB fix deposit is pretty attractive compared to the other banks in SG. Caveat Emptor.


--
Malaysia’s CIMB Continues Regional Drive

http://blogs.wsj.com/deals/2012/05/08/m ... od=WSJBlog

CIMB and RHB Said Planning to Scrap Biggest Malaysian Merger
http://www.bloomberg.com/news/2015-01-1 ... erger.html

CIMB GROUP BHD

TRADING at just below book value, CIMB Group Bhd is probably the cheapest financial institution with a regional exposure on Bursa Malaysia.

There are banking stocks that are trading at lower valuations but they do not have the regional reach such as CIMB.

Present in almost all Asean countries, CIMB’s biggest draw is its large presence in Indonesia where it derives more than 20% of its business.

But Indonesia is also the market that has dragged down the bank in the past 18 months. The deterioration of asset quality in Indonesia coupled with CIMB’s exposure to the mining sector has caused the banking group provisions for doubtful loans to rise significantly last year. This impacted its profitability.

In 2015, CIMB also undertook a manpower rationalisation programme to bring down cost. It shut down several offices outside the Asean region including the investment banking division in Australia to bring down cost.

The group’s wholesale banking division, which is a combination of its corporate banking, treasury and markets and investment banking operations, was considerably weak in 2015. It was due to CIMB’s restructuring of its operations and provisions.

The bank has embarked on initiatives to cut down its cost and the measures are targeted towards improving the bottom line. The result of the rationalisation scheme that has involved cost of some RM450mil for the first nine months of last year are expected to be reflected this year.

As for the rising non-performing loans in Indonesia, some analysts feel that the worse if over for the banking group.

Source: the Star

not vested

CIMB is also trading at attractive valuation.

Its forward-FY19 P/E of 10.7 times (vs 5-year historical mean of 13.3 times) and one time forward-FY19 P/B (vs historical mean of 1.2 times) make it attractive especially with improving sentiment in its Indonesian business.

UOBKH notes that potential increase in net interest margin and growth recovery in CIMB Niaga will help to catalyse CIMB’s share price.

One of the biggest tailwinds for CIMB Bank is the dovish stance on interest rate hike outlook in the US.

This would lend support as it translates to a more stable rupiah and net interest margin outlook for CIMB.

BUY, TP RM7.00; Current share price RM5.83

Source: Shares Investment

vested

CIMB will need to do some heavy lifting in first half of six-year roadmap to achieve ROE target — analysts

Need to focus on increasing low-cost deposits and generating capital-light income from non-interest sources in the first half of its six-year plan to reach its 12%-13% return on equity (ROE) target by 2027.

Its ROE stood at 11.2% in 2024.

Indonesia is expected to be a major driver, expectedly so given the increased capital allocation there.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/746949

CIMB on track to hit short-term ROE target

By DANIEL KHOO

The revision reflects a more conservative stance on the bank’s net interest margins (NIMs) and long-term return on equity (ROE).

Citi now expects flat earnings for CIMB in 2025 and expects the dividend payout ratio to remain steady at 55%.

Citi said there could be potential headwinds for NIMs moving forward.

Source: The Star

https://www.thestar.com.my/business/bus ... roe-target

2Q25 results within expectations

HOLD maintained CIMB’s 1H25 earnings were within expectations and our FY25 net profit forecast is unchanged.

Our TP of MYR7.60 is maintained (FY25E PBV of 1.1x, COE: 10.1%, g: 4%, ROE: 10.9%), as is our HOLD call.

With its ASEAN presence, CIMB is more exposed to volatility within the region as compared to its more domestic-centric peers in our view, with overseas earnings accounting for 40% of group pretax profit in 1H25.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/483427.pdf

not vested

CIMB Group (CIMB MK)

2Q25: Recovery Underway CIMB’s 2Q25 results were in line, supported by cost discipline and strong trading gains, with PPOP up 5% qoq on sustained NOII momentum.

Maintain BUY and target price of RM8.25 (1.14x 2026F P/B, ROE: 11.2%).

The stock remains a laggard (-8% ytd vs KLFIN 4%), compressing valuations to an attractive 1.0x 2026 P/B, below the sector average of 1.1x, despite stronger ROE (11% vs sector’s 10%).

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email