Maybank Research maintains Buy on Public Bank, TP RM16 (1295)

KUALA LUMPUR: Maybank Investment Research is maintaining its Buy recommendation on Public Bank with a target price of RM16.
It
said on Thursday the valuations were hardly demanding and with the
stock trading just about in line with the sector on a PER basis and at
a discount to the broader market.
“Our target price of RM16 tags
on an FY13 price-to-book value (P/BV) of 3.2 times which translates to
an FY13 PER of 13.4 times, only slightly above its historical mean PER
of 13 times.
“We maintain our BUY call on Malaysia's most profitable domestic bank,” it said.
Maybank
Research said Public Bank's valuations are not demanding. The high P/BV
is equally matched by high ROEs, which in turn translates to a
prospective FY13 PER of just 12.0 times.
“This is comparable to
the sector average ex-Public Bank of 11.5 times despite its superior
fundamentals and higher FY13 dividend yield of 4.2%. Moreover, the PER
of 12 times is an 8% discount to the group's historical one-year
forward PER mean of 13.0 times, and is about 10% lower than the current
market PER of 13.3x for CY13 earnings,” it said.