20051018 Hwang DBS Daily Focus

 Highlights
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> PBKF - 3Q05 results in line despite higher LLP - Maintain Buy
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> Public Bank's (PBKF MK) 9MFY05 net profit of RM1.06bn was within our and
> consensus expectations on an annualized basis despite a one-off jump in
> provision of c.RM20m in 3Q05. PBKF's 3Q05 loans grew 19.4% y-o-y while
> gross NPL was steady q-o-q at 2.6%. With loan growth momentum firm, we
> have raised our FY05 loan growth projection to 19% from 18%. Incorporating
> the latest set of results, we have lowered our FY05 EPS by 4%, but tweaked
> up FY06-07 forecasts. We reiterate our Buy call with a price target of
> RM7.70. The share price is supported by 11.6% gross dividend yield with
> room for another special of up to 9%.
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> Comments
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> CAHB - CAHB is not exiting HP business - Maintain Hold
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> Quoting sources, the Singapore Business Times (SBT) reported that CAHB is
> considering exiting the hire purchase (auto financing) business in
> relation to the retrenchment exercise.
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> Our checks with management indicated that there is no such plan. Perhaps
> the SBT misinterpreted the idea of CAHB retrenching finance company
> (finco) staff (hire purchase had traditionally been handled by fincos, not
> commercial banks). We understand that the retrenchment is part of the
> CIMB-BCB merger exercise and that only 75 of finco staff involved is in
> this retrenchment exercise vs. c.11,000 employees in the merged CIMB-BCB
> entity.
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> It made no sense to us that CAHB would consider exiting the lead loan
> growth driver of the lending industry. Besides, CAHB has a tie-up with
> Proton to finance Proton automobiles established just a few years ago, an
> area of financing that CAHB is trying to make a presence in.
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> We maintained our Hold call on CAHB with a price target of RM6.00.
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> Auto - September 2005 vehicle sales rose 14.7% y-o-y  - Maintain Neutral
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> Sept auto sales rose 14.7% y-o-y to 50,391 units, driven largely by new
> model launches by carmakers like Perodua and Toyota. For the first nine
> months of 2005, auto sales rose 12.6% to 407,184 units. Sept passenger car
> and commercial vehicle (CV) sales increased 2.4% y-o-y to 35,881 units and
> 63% y-o-y to 14,510 units respectively. The slowdown in passenger car
> sales reflects cannibalization of Proton cars by Perodua's Myvi and
> classification of MPVs as CVs.
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> We maintain our Neutral call on the auto sector and expect a slowing
> growth momentum as consumers cut back in reaction to rising inflation and
> a slowing economy.  Growth prospects in 2005 will be more muted - we
> project only 6% growth - mainly to reflect the lack of significant new
> models being launched.
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> Maintain our Buy calls on MBM Resources (MBM MK, RM3.00 target price) and
> UMW Holdings (UMWH MK, RM6.50 target price) as both companies will
> continue to benefit from an exceptionally strong demand for Perodua's
> Myvi. Maintain Sell on Proton (PROH MK, RM7.50 target price), in
> anticipation of potentially further provisions and/or writedowns.
>  <<20051019.pdf>>