CIMB Berhad - 4QFY24 results: Looking to New Multi-year Strategy
Mon, 03-Mar-2025 06:33 am
by Samuel Woo • Apex Research

Counter

CIMB (1023)

Target Price (RM)

8.990

Recommendation

Buy

Summary

  • CIMB’s 4QFY24 core net profit jumped +5% yoy and -fell 11% qoq to RM1.80b, bringing FY24 core net profit at RM7.73b, which was deemed within expectations, accounting for 98% and 99% of our and consensus expectations, respectively.

  • Management’s tone: Neutral.

  • Re-iterate our BUY recommendation with a lowered target price of RM8.99, based on FY25F GGM-PBV of 1.29x.

 

Results within expectations. FY24 core net profit at RM7.73b (+11% yoy) came within expectations, accounting for 98% of our core net profit forecast at RM7.89b and was at 99% of consensus forecasted net profit of RM7.78b.

 

YoY. 4QFY24 core net profit jumped +5% yoy to RM1.80b, driven by improved NII and provisioning offset weakness in NOII. FY24 core net profit jumped +11% yoy to RM7.73b, as increases in NII and NOII offset higher OPEX.

 

QoQ. 4QFY24 core net profit fell by -11% qoq, dragged by weaknesses in NII and NOII.

 

Outlook. Expect to see pressure on FY25F NIMs coming from Singapore, Indonesia and Thai regions (Malaysia’s NIM should be flattish) – hence, management guides for Group NIMs to remain stable or contract slightly. Expect to also see uptick in NCC, as both Thai and Singapore should see normalisation on this front (FY24 saw large writebacks). The Group will announce its next multi-year plan on 5 March.

 

Earnings Revision. We lower our FY25F and FY26F earnings forecasts by -2.6% and -3.6%, respectively, to factor in weaker NIM, which the Group guides for. 

 

Valuation. Re-iterate our BUY recommendation on CIMB with a target price of RM8.99, based on an FY25F P/BV of 1.29x GGM-PBV valuation and +3% ESG factored premium based on 5-star ESG rating. We lower our target price to account for downward earnings revision, despite being slightly offset by our newly added ESG premium.

 

Risks. (1) NIM compression, (2) Higher-than-expected NCC, (3) Weak loan growth.

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