Thursday, September 22, 2011


OCBC: HSBC lowers TP to $9.30 from $10.90, keeps Neutral rating. Cuts EPS forecasts for 2011-13 (now 7-16% below consensus), in view of a more stagnant macro outlook and depressed interest rate climte. Expects lower NIM and non-interest income, and higher collective provisioning charges.
Says valuation at 1.3x FY12E P/B and 12x P/E looks attractive, but sees better value in UOB (Overweight, TP $23.15). Notes, the latter trades at similar P/B multiples but has a more profitable franchise. The house also like DBS given its more attractive headline valuation multiples at 1x PB, 10x P/E, which should limit relative downside vs OCBC.

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