Wednesday, August 29, 2018

CIMB: Better Profits?

This morning, I called a trading BUY on CIMB based on technical breakout. After lunch, CIMB announced its result for QE30/6/2018, which shows net profit increased to RM1.98 billion from RM1.10 billion a year ago.

However, the increase is attributable to two large exceptional gains totalling RM928 million that came from the sale of 20% of CIMB-Principal and 10% of CIMB-Principal Islamic. If these one-off gains were excluded, CIMB’s net profit would drop to RM1.05 billion from RM1.10 billion a year ago. See accompanying tables and graphs.

Table: CIMB's last 8 quarters' P&L
Graph: CIMB's last 28 quarters' P&L

Presently, CIMB share price is going higher on the news as reported. Tomorrow the share price may change course after the newspaper reports which should include analysts’ comment, highlighting the actual performance of CIMB.

At RM6.17, CIMB is10 sen higher than yesterday close. The positive technical outlook as stated in my note yesterday will remain as long as CIMB share price stays above RM6.00.

If you feel that CIMB share price may decline tomorrow, you should consider selling or reducing your position. If you want to go with the positive technical outlook, then you can hold onto the stock.

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