After a tough season, our favourite MNRB consistent result return as our favourite. We initiate buy on dip with a target price at RM 4.00.
By our market size, the market may probably reach maturity for financial industry. The grow will not be significant and merger is always on the cards.
Creating a four largest asset makes sense and also cutting unnecessary redundant cost. Will boost profits. The major beneficiary…. if not OSK then whoelse. If OSK is to exit during the merger. They may can fetch a good price and fully valued back to the group asset. If they’re not exiting. merger will boost profit and it’s competitiveness of it shares in RHB Bank. The clear winners is EPF and OSK.
We bought some of its warrant at RM 0.285 before rumours spilled for the merger.
As we have always said that RM is undervalued. Recent strength reflex the trend may reverse further. We believe the fair value of RM to USD is at RM 3.80 vs USD 1. But 6 months to end of 2017 only try RM 4.20 below vs USD 1.00.
As we mentioned before that we may start to buying back into property related companies. However, we are not into pure developers as we cannot forecast the time of recovery. We likes either developers with their own assets with recurring income as their portfolio. Alternative same as Paramount where portfolio is well divisified from different income stream.
We like OSK as it is still well diversified with property development. Although yesterday result is profit reduced but we believe it’s valuation still cheap with strong book value.
on 2nd choice will be Ken Holdings. A small size developer undervalued but does have quality assets on hand. With a few new projects will turn the company becomes vibrant.
lastly Insas, a consistent income across its portfolio and start to perform well. well balance portfolio with financial arm that we believe will do well in 2018 can deliver potentially more sterling results.
However, no need to jump into the ship. Buy slowly and accumulate. OSK below RM 1.70. Insas and Ken below RM 1.00 can be accumulated with great confidence.
Gone with the time where news are dominating share prices movement. From the recent sign, we feel great that more investors are earnings oriented. The recent quarters about many companies share prices being punished when result is not good. That’s a sign of maturity which we think is good.
With its earnings continue to improve after a rationalization plan 2 years ago. I expect CIMB will grow further with EPS at 15 times that can move stock price back above RM 7 to 8. Another one quarter improve result will see it soon.
From profit to loan growth. From asset and loan revenue. From impairment to NPL. MBSB is in the right direction and making themselves towards RM 2.00. We reinistiate our buy call into MBSB.
Revenue of 2.8 Bil and reporting a profit in this quarter is a good result. We continue value UMW value at RM 7 and above.
As a pharmaceutical company, a 15 times PE is not unusual. Consistent results give us a view that it should have a minimum of 15 times of it EPS. A continue call for accumulation.