OSK Research Sdn Bhd is more optimistic on the outlook of CIMB Group Holdings Bhd although its share price has lagged both the market and its peers over the past months.
In a research note today, OSK said there was scope for CIMB's earnings to beat relatively conservative consensus earnings growth forecast of 4 per cent for financial year 2012.
OSK said CIMB was scheduled to release its fourth quarter 2011 (4Q11) results where earnings were expected to reflect a 8 per cent year-on-year (yoy) growth but a 5 per cent quarter-on-quarter decline owing to an upward normalisation in 4Q11 loan loss provisioning.
"This is a rather commendable performance, taking into account the fact that the 4Q10's non-interest income included the recognition of the lumpy investment banking fee income arising from the Petronas Chemicals' initial public offering.
"On a pre-provision operating line, we expect a high single-digit yoy growth from stronger foreign exchange income flows and stabilisation in the net interest margins," it said.
OSK has upgraded CIMB shares to a 'buy' with a higher fair value of RM8.05 from RM7.62 previously.
CIMB shares on Bursa Malaysia rose three sen to RM7.23 as at 10.48am today. -- Bernama
In a research note today, OSK said there was scope for CIMB's earnings to beat relatively conservative consensus earnings growth forecast of 4 per cent for financial year 2012.
OSK said CIMB was scheduled to release its fourth quarter 2011 (4Q11) results where earnings were expected to reflect a 8 per cent year-on-year (yoy) growth but a 5 per cent quarter-on-quarter decline owing to an upward normalisation in 4Q11 loan loss provisioning.
"This is a rather commendable performance, taking into account the fact that the 4Q10's non-interest income included the recognition of the lumpy investment banking fee income arising from the Petronas Chemicals' initial public offering.
"On a pre-provision operating line, we expect a high single-digit yoy growth from stronger foreign exchange income flows and stabilisation in the net interest margins," it said.
OSK has upgraded CIMB shares to a 'buy' with a higher fair value of RM8.05 from RM7.62 previously.
CIMB shares on Bursa Malaysia rose three sen to RM7.23 as at 10.48am today. -- Bernama
