Tuesday, 17 April 2012

Alliance Research upgrades Affin to Strong Buy, raises TP to RM3.84

KUALA LUMPUR (April 17): Alliance Research has upgraded AFFIN HOLDINGS BHD [] (AHB) to a Strong Buy from Trading Buy previously, and raised its target price to RM3.84 from RM3.50 earlier.

In a note Tuesday, Alliance Research maintained that the group’s transformation story was persistently overlooked by the investment community.

The research house said that given the remarkable turnaround of AHB’s operations, current valuation was compelling, trading at a forward PER of 8.2x and about 28.0% discount against its 2012 book value.

“We believe that the potential for Bank of East Asia (BEA) to increase its stake in AHB is imminent, in view of further liberalisation in the domestic banking sector by BNM in Dec last year with the unveiling of Financial Sector Blue Print.

“Therefore, we maintain that the near term key re-rating catalyst for the group remains BEA potentially increasing its stake in AHB,” it said.

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