UOBKayhian on 4 May 2015
FY15F PE (x): 12.0
FY16F PE (x): 11.2
Oversea-Chinese Banking Corporation (OCBC) reported net profit of S$993m for 1Q15,
a whisker away from the S$1b mark.
Muted loan growth. Loans expanded marginally by 0.2% qoq. Greater China (+2.8%
qoq) and Indonesia (+1.3% qoq) provided some growth on a sequential basis but there
was a slight contraction from Singapore (-0.1% qoq). Trade loans contracted 12% qoq
while US$ loans declined 5.2% qoq.
Maintain BUY. Our target price of S$12.58 is based on P/B of 1.56x, derived from
Gordon Growth Model (ROE: 11.3%, required return: 7.8% and growth: 1.5%)
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