CIMB: Earnings Rose

Results Update

For QE30/9/2016, CIMB's net profit rose 17% q-o-q or 27% y-o-y to RM1023 million. Revenue rose 6% q-o-q or 7% y-o-y to RM4123 million.


Table: CIMB's last 8 quarterly results

We can see from the graph below that CIMB's financial performance is on the mend.


Graph 1: CIMB's last 16 quarterly results

Valuation

CIMB (closed at RM4.79 yesterday) is now trading at a trailing PER of 12x (based on last 4 quarters' EPS of 40 sen). At this PER, CIMB is deemed fairly valued.

Technical Outlook

The weekly chart shows CIMB could have form an uptrend as the July low was higher than the January low and its recent October high was higher than its April high of RM5.00. In addition, MACD has also gone into the positive territory.Its immediate support is at RM4.60-4.70.


Chart 1: CIMB's weekly chart as at Nov 16, 2016_3.50pm (Source: ShareInvestor.com)

The monthly chart shows the MACD has crossed above the MACD signal line. In addition, ADXR has peaked and dropping. The last 2 times we saw a peak in ADXR was in 2007 & 2011 when the stock peaked. This round the peak in the ADXR could well signal the trough in the stock.


Chart 2: CIMB's monthly chart as at Nov 16, 2016_3.50pm (Source: ShareInvestor.com)

Conclusion

Based on improving financial performance & developing bullish technical outlook, CIMB could be a good stock for a recovery play.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.