KUALA LUMPUR (March 8): Hwang DBS Vickers Research has downgraded BIMB HOLDINGS BHD [] to a Hold but maintains the target price at RM2.20.
It said on Thursday the RM2.20 was based on the Gordon Growth Model, assuming 12% ROE, 4% growth, 10.3% cost of equity.
“Share price has gained 15% YTD. Bank Islam assuming BIMB’s listing status could be positive as this would allow investors to have direct exposure to Bank Islam,” it said.
HDBSVR said currently, only 51% of Bank Islam’s earnings are consolidated into BIMB.
“There are talks that Bank Islam is seeking to buy an Indonesian bank, which could allow it to penetrate new markets. There are no details yet, but pricing and the resulting synergies would be crucial,” HDBSVR said.
It said on Thursday the RM2.20 was based on the Gordon Growth Model, assuming 12% ROE, 4% growth, 10.3% cost of equity.
“Share price has gained 15% YTD. Bank Islam assuming BIMB’s listing status could be positive as this would allow investors to have direct exposure to Bank Islam,” it said.
HDBSVR said currently, only 51% of Bank Islam’s earnings are consolidated into BIMB.
“There are talks that Bank Islam is seeking to buy an Indonesian bank, which could allow it to penetrate new markets. There are no details yet, but pricing and the resulting synergies would be crucial,” HDBSVR said.
