reports
- Keith Wee Teck Keong
Banking - Digital Banks Ramping Up Deposit Competition?
Digital Banks Ramping Up Deposit Competition? As the five digital banks prepare to commence operations in the coming months, we anticipate a focus on deposit acquisition, potentially impacting sector NIM slightly. Sector valuations have risen to a historical mean P/B of 1.10x, which appears fair against forecasted ROE of 10% and earnings growth of only 6% vs our KLCI earnings growth assumption of 11%. We maintain our MARKET WEIGHT recommendation on the sector. CIMB remains our preferred choice.
- Keith Wee Teck Keong
Banking - Risk To Reward Remains Well Balanced
Risk To Reward Remains Well Balanced Loans growth edged upwards to 5.8% in Feb 24 (Jan 24: 5.7%) on the recovery in both the HH and business segments and household loans. We anticipate a 5.5-6.0% system loans growth for 2024, implying a 1.18x loans to GDP growth multiple which is in line with its 10-year mean. We find the sector’s risk to reward well-balanced (mean valuation) in the absence of strong catalysts. The sector’s 2024 earnings growth is expected to lag the broader equity market. Maint...
- Keith Wee Teck Keong
Banking - Risk To Reward Remains Well Balanced
Loans growth edged upwards to 5.8% in Feb 24 (Jan 24: 5.7%) on the recovery in both the HH and business segments and household loans. We anticipate a 5.5-6.0% system loans growth for 2024, implying a 1.18x loans to GDP growth multiple which is in line with its 10-year mean. We find the sector’s risk to reward well-balanced (mean valuation) in the absence of strong catalysts. The sector’s 2024 earnings growth is expected to lag the broader equity market. Maintain MARKET WEIGHT with CIMB being our...
1295 PUBLIC BANK BHD
RHBBANK RHB BANK BHD
HLFG HONG LEONG FINANCIAL GROUP
AMM AMMB HOLDINGS BHD
HLBK HONG LEONG BANK BERHAD
ABMB ALLIANCE BANK MALAYSIA BHD
TXG 10X GENOMICS INC CLASS A
ABANK AFFIN BANK BHD
123F 123FAHRSCHULE SE
BIMB BANK ISLAM MALAYSIA BHD
Z29 029 GROUP SE
MAYBANK MALAYAN BANKING BHD
- Keith Wee Teck Keong
Banking - 2H23 Financial Stability Report: Vigilant Of Potential Macro...
2H23 Financial Stability Report: Vigilant Of Potential Macroeconomic Headwinds BNM released its 2H23 financial stability report. It believes Malaysian financial institutions remain well insulated from potential financial volatility arising from the normalisation of interest rates in developed countries. However, it remains vigilant of the impact of input cost pressures from lower subsidies and a weaker ringgit on asset quality going forward. Maintain MARKET WEIGHT as current risk to reward remai...
- Keith Wee Teck Keong
Banking - 4Q23: Muted Earnings Outcome
4Q23: Muted Earnings Outcome The sector delivered a muted earnings growth of 1% yoy in 4Q23 while contracting 8% qoq on NIM compression and higher provisions. As the sector is trading at its historical mean valuation and is expected to lag the FBMKLCI’s earnings growth, we perceive the current risk-to-reward ratio as well-balanced. In the absence of meaningful earnings catalysts, maintain MARKET WEIGHT on the sector. CIMB remains our top pick.
- Keith Wee Teck Keong
Public Bank (PBK MK) - 4Q23: Potential Credit Cost Tailwinds From Writ...
4Q23: Potential Credit Cost Tailwinds From Write-backs Public Bank’s 4Q23 earnings are in line, supported by a pick-up in loans growth momentum, and benign credit cost trends. Maintain BUY and target price of RM5.10 (1.79x 2024F P/B, 12.8% ROE). The stock is trading at an attractive 1.0SD below its historical mean. Public Bank also stands to benefit once macroeconomic conditions improves as it has the strongest headroom for potential provision write-backs.
- Adrian Loh Tzum Yung
- Benjaphol Suthwanish
- Ceilica Su Rui
- Damon Shen
- Desmond Chong Chee Wai
- Heidi Mo Jinghui
- Jieqi Liu
- Jo Yee Ng
- John Cheong Ming Chern
- Jonathan Koh
- Julia Pan Mengyao
- Jun Sian Tan
- Kampon Akaravarinchai
- Keith Wee Teck Keong
- Ming San Soong
- Paula Ruth
- Shirley Wang Xueyi
- Stella Guo Yuting
- Tanaporn Visaruthaphong
- Tham Mun Hon
- Wei Xiang Ku
- Ziv Ang Sze Champ
Regional Morning Notes - Thursday, February 29, 2024
GREATER CHINA Economics 2024/25 Budget: Tough Balancing Act. Sector Property: Government removes all cooling measures on Hong Kong property; upgrade sector to MARKET WEIGHT. Results Baidu Inc (9888 HK/BUY/HK$106.60/Target: HK$128.00): 4Q23: Solid earnings growth; all eyes on AI-powered ads and Ernie Bot in 2024. Galaxy Entertainment Group (27 HK/BUY/HK$42.05/Target: HK$56.00): 4Q23: Market share shrank within expectations; expanding share in 2024. Sun Hung Kai Properties (16 HK/BUY/HK$78.00 /Tar...
1295 PUBLIC BANK BHD
BEM BANGKOK EXPRESSWAY AND METRO PUBLIC COMPANY LIMITED
COM7 COM7
00027 GALAXY ENTERTAINMENT GROUP LIMITED
1155 MALAYAN BANKING BHD.
O39 OVERSEA-CHINESE BANKING CORPORATION LIMITED
CENTEL CENTRAL PLAZA HOTEL
IJM IJM CORP BHD
PMAH PRESS METAL ALUMINIUM HOLDIN
968 XINYI SOLAR HOLDINGS LTD
FEH FOOD EMPIRE HOLDINGS LTD
FRKN FRENCKEN GROUP LTD
TIDLOR NGERN TID LOR PCL
09888 BAIDU INC
AVIA AVIA AVIAN TBK PT
Moody's announces completion of a periodic review of ratings of Public...
Moody's Investors Service (Moody's) has completed a periodic review of the ratings of Public Bank Berhad and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 14 February 2024 in which Moody's reassessed the appropriateness of the rating...
- Keith Wee Teck Keong
Banking - Loans Growth Gains Traction
Loans Growth Gains Traction Loans growth edged up to 5.3% (Nov 23: 4.9%) on a recovery in business loans. We anticipate a 5.0-5.5% system loans growth for 2024, implying a 1.15x loans to GDP growth multiple which is in line with its 10-year mean. We find the sector’s risk to reward to be well balanced in the absence of strong catalysts. The sector’s 2024 earnings growth is expected to lag that of the broader equity market. Maintain MARKET WEIGHT with CIMB being our top pick within the sector.
- Keith Wee Teck Keong
Banking - Allaying Any Concerns Of Recent Small-Cap Meltdown On Banks
Allaying Any Concerns Of Recent Small-Cap Meltdown On Banks The recent share price rout of a number of mid-to-small capitalisation stocks on Bursa Malaysia may have raised some concerns of potential share margin losses for banks and other financial institutions. In this note, we allay any potential concerns given the smallish market capitalisation and loan exposure relative to the banking system loans and capital base.
- Keith Wee Teck Keong
Banking - Recovery In Loans Growth
Recovery In Loans Growth Loans growth edged upwards to 4.9% on recovery in business loans. However, leading loans growth indicators in the form of loans applications and approvals have weakened. All in, we find current sector valuations at -0.5 SD from the historical mean fair, considering the absence of strong earnings catalysts (flattish NIM and modest recovery in loans growth). Share prices should be supported by attractive dividend yields. Maintain MARKET WEIGHT with CIMB as our top pick.
- Keith Wee Teck Keong
Banking - Lacking Fresh Catalysts
Lacking Fresh Catalysts The sector delivered a 14% yoy earnings growth in 3Q23 on lower tax and provisions. We think the sector’s current risk to reward is balanced given the lack of fresh catalysts. This is reinforced by our expectation of a modest sector earnings growth of 6% in 2024 which lags the broader market as well (FBMKLCI earrings growth forecast: 11% in 2024). Maintain MARKET WEIGHT. Our two sector top picks are CIMB Group and Public Bank.
- Keith Wee Teck Keong
Public Bank (PBK MK) - 3Q23: Potential Credit Cost Tailwinds From Writ...
3Q23: Potential Credit Cost Tailwinds From Write-backs Public Bank’s 3Q23 earnings are in line, supported by a sequential recovery in NIM, a pick-up in loans growth momentum, and positive operating JAWS. Maintain BUY and target price of RM5.10 (1.79x 2024F P/B, 12.8% ROE). Valuation has declined to a highly attractive 1.0SD below its historical mean while hefty provision buffers provide potential credit cost tailwinds.
- Adrian Loh Tzum Yung
- Carol Dou Xiao Qin
- Chong Lee Len
- Jonathan Koh
- Jun Sian Tan
- Keith Wee Teck Keong
- Nurul Nazira Binti Abdullah
- Paula Ruth
- Sunny Chen
- Wei Xiang Ku
Regional Morning Notes - Thursday, November 30, 2023
GREATER CHINA Results Ali Health (241 HK/BUY/HK$4.62/Target: HK$6.00): 1HFY24: Bottom line beat estimates; acquiring marketing business to enhance capabilities of cloud-based pharmacy. INDONESIA Sector Telecommunications: ISAT might have more fixed broadband subscribers than EXCL in 4Q23 thanks to inorganic growth; maintain OVERWEIGHT. MALAYSIA Results Axiata (AXIATA MK/HOLD/RM2.30/Target: RM2.50): 3Q23: Below expectations; cut 2023-24 net profit by 15%. Mah Sing Group (MSGB MK/BUY/RM0.84/Targ...
- Keith Wee Teck Keong
Banking - Loans Growth Remains Below Forecast
Loans Growth Remains Below Forecast Loans growth edged upwards to 4.3% (Aug 23: 4.1%) on a slight recovery in business loans. Current system loans growth of 4.3% is trending below our 2023 estimates of 4.5%. We find current sector valuations, -0.5 SD from the historical mean fair, considering the absence of strong earnings catalysts (flattish NIM and moderating loans growth in 2024). On the balance, share prices should be supported by attractive dividend yields. Maintain MARKET WEIGHT.
1295 PUBLIC BANK BHD
1155 MALAYAN BANKING BHD.
RHBBANK RHB BANK BHD
HLFG HONG LEONG FINANCIAL GROUP
AMM AMMB HOLDINGS BHD
HLBK HONG LEONG BANK BERHAD
ABMB ALLIANCE BANK MALAYSIA BHD
HLBANK HONG LEONG BANK BHD
ABANK AFFIN BANK BHD
BCOW 1895 BANCORP OF WISCONSIN INC
BIMB BANK ISLAM MALAYSIA BHD
- Jonathan Koh
- Keith Wee Teck Keong
- Kwanchai Atiphophai
- Posmarito Pakpahan
Banks – Regional: ASEAN Banks: Quarterly Update
Growth in ASEAN is supported by FDI inflows, which are already above pre-pandemic levels. NIMs are expected to remain stable as central banks have completed their rate hike cycles but are maintaining interest rates at current elevated levels in the near term. Maintain OVERWEIGHT on Singapore and Indonesian banks. The formation of the new government is also positive for Thai banks. Our top BUYs are OCBC (Target: S$18.22), PBK (Target: RM5.10), SCB (Target: Bt130) and BBNI (Target: Rp11,200).
- Keith Wee Teck Keong
Banking - ESG In The Spotlight
ESG In The Spotlight ESG is gaining global prominence as stakeholders integrate it into their business models and risk frameworks. We anticipate banks will need to embrace sustainability more holistically, which will increasingly impact their reputation, success and ultimately valuations in the longer term. Public Bank, HLBank, CIMB and Maybank hold the top four ESG scores in our study. Maintain MARKET WEIGHT. Top picks: CIMB and Public Bank.
- Keith Wee Teck Keong
Banking - Growth Moderation Resumes
Growth Moderation Resumes Loans growth edged downwards to 4.1% in Aug 23 (July: 4.2%) on slower working capital loans growth. Current system loans growth of 4.1% is trending slightly below our full-year estimates of 4.5%. We find current sector valuations fair, at -0.5 SD from the historical mean, considering the absence of new catalysts. NIM is predicted to remain flattish in 2024 and loan growth is expected to slow down. However, this is balanced out by an attractive sector dividend yiel...
- Keith Wee Teck Keong
Banking - Lacking Fresh Catalysts
Lacking Fresh Catalysts The sector delivered a robust earnings growth of 17% yoy in 2Q23 on lower tax, provisions, and strong non-interest income growth. However, with sector valuations near historical mean and earnings expected to trail the FBMKLCI, we see a fair risk-toreward balance given the absence of new catalysts. In 2024, we anticipate stable NIM and slowing loan growth. Maintain MARKET WEIGHT. Our two sector top picks are CIMB Group and Public Bank.
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.