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Alliance Financial Group Viewed As Undervalued
Malaysia Daily Bulletin | 11 November 2015
  • Alliance Financial Group is expected to remain nimble in navigating the adjustments that are taking place in the economy.
  • The firm’s niche in the small- and medium-sized enterprise segment and the focus on mass affluent as well as the high-net-worth affluent base also makes it attractive.
  • Affin Hwang Capital noted that the upcoming 2Q16 results will likely continue to reflect sound operations at the group, with no unexpected negative surprises.
  • Management has reiterated its target of achieving a higher medium-term return on equity of at least 13 percent (against an annualised 11 percent as at 1Q16) via several strategies.

Significance: Given that the stock is trading at an attractive 1.2 times book value, with share price having retraced 23 percent since its high in February, the research house opines that it is undervalued (with 23 percent upside) and thus has maintained its ‘Buy’ call on the stock with a target price of RM4.50.

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