CIMB buoyant on RHB Cap's regional expansion, TP up 14%

CIMB buoyant on RHB Cap's regional expansion, TP up 14%
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Tuesday, 17 September 2013 13:40

KUALA LUMPUR (Sept 17): CIMB Investment Bank has maintained its ‘outperform’ call for rival RHB CAPITAL BHD [] shares, and raised the target price (TP) for the latter by 14% to RM11.30 from RM9.90. This is in light of the RHB Capital's further expansion in the region.

In a note, CIMB analyst Winson Ng said RHB Capital remains an ‘outperform’ based on several potential re-rating catalysts. These include RHB Capital's attractive price-earnings valuation, increase in market share for investment banking, and planned entry into the under-penetrated financial market in Indonesia.

Ng whose note follows an article on RHB Capital in The Edge, said the dividend discount model-based TP for RHB Capital rose 14% to RM11.30. This is the result of rolling over RHB Capital's valuation to end-2014.

“It is encouraging that RHB Capital is looking further than the neighbouring countries and has set its sights on China, one of the biggest economies in the world.

“This includes also the Philippines, which has the third-largest population in ASEAN” said Ng.