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United Overseas Bank Limited Recovery on track SINGAPORE | BANKING | 2Q21 RESULTS
2Q21 earnings of S$1.0bn in line, at 25.5% of our FY21e forecast. Stronger-thanexpected net fee and commission income offset by lower trading and investment income. 1H21 PATMI is 51% of our FY21e forecast. NIMs eased 1bp QoQ to 1.56%, though NII grew 3% in the same period led by steady loan growth mainly from term and trade loans in Singapore, North Asia and Rest of World. Guidance for FY21e unchanged. Impairment provisions of 20bps below our base case of 30bps in FY21e credit cost. Dividend payout returns to pre-pandemic levels. Interim DPS of 60 cents declared. Maintain ACCUMULATE with higher GGM TP (1.17x of FY21e P/BV) of S$29.00 from S$28.70 after earnings revision. We raise FY21e earnings by 7% as we crank up fees and commissions estimates on the back of strong growth in WM and income and loanrelated fees. Catalysts expected from a stabilisation of outlook and the reversal of GP
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UOB KAYHIAN |
MAYBANK KIM ENG |
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Oversea-Chinese Banking Corp (OCBC SP) 2Q21: Balance Sheet Is Solid As A Rock
Earnings moderated 23% qoq in 2Q21 without one-off items, such as mark-to-market gains from insurance and huge net trading income, as seen in 1Q21. CET-1 CAR at 16.1% is significantly above the comfortable range of 12.5-13.5%, which indicates room to enhance dividend payout in 2022 when headwinds confronting Malaysia and Indonesia have subsided. OCBC provides attractive dividend yield of 4.1% for 2021 and 4.6% for 2022. 2021 P/B is low at 1.1x. Maintain BUY. Target price: S$15.65.
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Malaysia Airports (MAHB MK) As the saying goes, “This too shall pass”
U/G to BUY with higher DCF-based TP of MYR6.86 The COVID-19 pandemic is ravaging Malaysia. Yet, our observation of other countries indicates to us that the accelerating COVID-19 vaccination rate in Malaysia will bring it under control soon. We widen our FY21E/FY22E net loss by c.MYR200m/c.MYR400m but raise our FY23E net profit by c.MYR200m. Utilising a lower WACC of 8.7% (9.1% previously), our DCF-based TP is raised to MYR6.86 from MYR5.98. With 21% upside potential, we upgrade MAHB to BUY from HOLD.
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