Published: Thursday September 20, 2012 MYT 9:06:00 AM
Maybank Research maintains Buy on Public Bank, TP RM16
It said on Thursday the valuations were hardly demanding and with the stock trading just about in line with the sector on a PER basis and at a discount to the broader market.
“Our target price of RM16 tags on an FY13 price-to-book value (P/BV) of 3.2 times which translates to an FY13 PER of 13.4 times, only slightly above its historical mean PER of 13 times.
“We maintain our BUY call on Malaysia's most profitable domestic bank,” it said.
Maybank Research said Public Bank's valuations are not demanding. The high P/BV is equally matched by high ROEs, which in turn translates to a prospective FY13 PER of just 12.0 times.
“This is comparable to the sector average ex-Public Bank of 11.5 times despite its superior fundamentals and higher FY13 dividend yield of 4.2%. Moreover, the PER of 12 times is an 8% discount to the group's historical one-year forward PER mean of 13.0 times, and is about 10% lower than the current market PER of 13.3x for CY13 earnings,” it said.