BIMB HOLDINGS BHD

Fair value: RM5.40

AMINVESTMENT Bank Research notes that BIMB Holding’s plan to convert the current financial holding company structure to that of a bank entity as a holding company is likely to be delayed in view of the changes to the board of directors of Tabung Haji, its largest shareholder.

The planned new structure will be similar to the structure of RHB, Alliance Bank and Affin.

“There is no urgency for this change. It remains uncertain as of now on the timing and the changes that will be pursued within the group on the new structure,” it said in a note.

The research house maintained its “buy” call and fair value at RM5.40 per share based on an FY19 price-to-book value (P/BV) of 1.7 times, supported by a return on equity of 12.5%.

It said its forward P/BV was in line with the stock’s three-year historical average P/BV of 1.68 times.

It has also been reported that the group will potentially dispose of a portion of its stake in its subsidiary Syarikat Takaful Malaysia Bhd (STMB) to repay the outstanding sukuk of RM1.3bil at BIMB Holdings (company level) to facilitate the restructuring.

“Management clarified that this will not materialise as it will reduce the contribution of earnings from STMB, which is still key to the group’s profits,” it said.

On the termination of 17,000 contract staff under the new government, the research house said the management had hinted that the group’s personal loans would be minimally affected.

“We understand that their personal loans were mainly extended to full-time employees and not short-term contract workers.

“Meanwhile, on the review of projects and contracts, the group does not have exposure