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CIMB Research maintains Neutral on AMMB (1015)
by hlk Wed 11 Jul 2012, 14:27
KUALA LUMPUR: CIMB Equities Research remains Neutral on AMMB due concerns about its weak loan growth and margin compression.
“Our
valuation basis remains a 10% discount to the DDM value (cost of equity
of 12% and long-term DPS growth of 5%). We remain Neutral on AMMB and
prefer Maybank,” it said on Wednesday.
It
was commenting on a proposal by AMMB to acquire MBf Cards, which is
expected to be marginally earnings accretive in the near term.
CIMB
Research said the potential synergies, including access to 7.0 million
Bonuslink card members and a bigger merchant base, would only be
realised in the longer term.
“Our
valuation basis remains a 10% discount to the DDM value (cost of equity
of 12% and long-term DPS growth of 5%). We remain Neutral on AMMB and
prefer Maybank,” it said on Wednesday.
It
was commenting on a proposal by AMMB to acquire MBf Cards, which is
expected to be marginally earnings accretive in the near term.
CIMB
Research said the potential synergies, including access to 7.0 million
Bonuslink card members and a bigger merchant base, would only be
realised in the longer term.
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