For QE31/3/2017, CIMB's net profit rose 38% q-o-q or 45% y-o-y to RM1.18 billion while revenue rose 1% q-o-q or 17% y-o-y to RM4.36 billion. Four divisions saw better q-o-q PBT contribution:
- Regional Commercial Banking (494%) due to the higher provisions in Thailand and Singapore in 4Q16
- Wholesale Banking (30%) due to a stronger performance in corporate banking and improved capital market activity
- Group Asset Management & Investments (64%) due to absence of investment impairments
- Group Funding (46%) due to the goodwill impairment in 4Q16 and FX gains
Table: CIMB's last 8 quarterly results
As a result of the improved performance, we can see that CIMB's bottom-line is now fast approaching the level of profit achieved in early 2014.
Graph: CIMB's last 23 quarterly results
CIMB (closed at RM6.13 yesterday) is now trading at a trailing PER of 13.6x (based on last 4 quarters' EPS of 44.79 sen). At this PER, CIMB is deemed fairly valued.
CIMB is recovering nicely after testing its long-term uptrend line in early 2016. Its immediate resistance is at RM6.20-6.25. Can it surpass this level to test the next resistance at RM7.00? We will have to wait and see.
Chart: CIMB's monthly chart as at May 25, 2017 (Source: ShareInvestor.com)
Based on satisfactory financial performance & bullish technical outlook, CIMB could be a good stock for long-term investment.
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