CIMB: A Better Performance Actually

Results Update

For QE30/6/2019, CIMB reported a net profit which dropped 24% y-o-y but rose 27% q-o-q to RM1.51 billion. As reported (above), PBT & NP dropped about 20-24% 40% y-o-y due to two exceptional one-off items booked into the account last year (QE30/6/2018): RM928 million gain on sale of 20% of CPAM and 10% of CPIAM. If these 2 items are excluded, the Group operating income rose 13.5% y-o-y, "emanated from the stronger capital market-driven NOII, reflected in the 78.2% y-o-y jump in Wholesale Banking PBT. Consumer Banking PBT was 74.2% lower y-o-y from reduced NII, higher operating expenses and provisions. Commercial Banking improved 89.0% y-o-y from reduced provisions. GVPF improved 229.9% y-o-y from the improved performance in the Group’s fixed income portfolio in 2Q19, which contributed to the Group’s 43.3% y-o-y growth in 2Q19 net profit.


Table 1: CIMB's last 8 quarterly results


Table 2: CIMB's results for QE30/6/2019 cf. QE30/6/2018


Graph: CIMB's P&L for last 32 quarterly results

Valuation

CIMB (closed at RM4.94 yesterday) has a PER of 7.7 times (based the last 4 quarters' EPS of 63.96  sen). In addition, it is trading a price to book of 0.9 time. It has a dividend yield of 5.3%. At these multiples, CIMB is deemed very attractive.

Technical Outlook

CIMB is now resting on the strong support from the horizontal line at RM5.00.


Chart: CIMB's daily chart as at Aug 29, 2019 (Source: MalaysiaStock.Biz)

Conclusion

Based improved financial performance and attractive valuation, CIMB is an excellent stock for long-term investment.

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.