‘CIMB’S PROSPECTS REMAIN INTACT’
Lender’s Malaysian operations will continue to provide backstop to regional weaknesses, says PublicInvest
CIMB Group Holdings Bhd’s prospects remain intact although its nearterm growth will likely fall short of expectations, says Public Investment Bank Bhd (PublicInvest).
CIMB Group’s Malaysian operations would continue to provide a backstop to regional weaknesses, PublicInvest wrote in a report yesterday after the bank’s quarterly meeting with the investment fraternity to provide updates on its operational developments.
“While not skirting around issues and current challenges in its Indonesian operations, the management is confident that it is more prepared and will be able to ride out this period better.
“Near-term growth will likely fall short of expectations. We are lowering our financial years 2018 to 2020 earnings estimates by an average of 5.2 per cent to account for slightly lower margins, while adjusting for translation-related effects due to currency weaknesses,” it explained.
PublicInvest said there was scope for earnings upside, particularly if the group’s regional exposures made turnarounds earlier than expected.
“We remain optimistic of the group’s long-term prospects, pockets of near-term challenges and retain our ‘outperform’ call,” it added.
MIDF Research, too, is optimistic on CIMB Group’s outlook. It made no changes to its target price of RM7.85.