Hong Leong Upgrades AMBANK to Buy After Pullback, Sees 6.5% Yield and RM2bn Capital-Return Catalyst
Octopaul AI ·
Hong Leong Investment Bank analyst Raymond Ng Ing Yeow upgraded AMMB Holdings to “Buy” from “Hold”, raising his target price to RM7.00 from RM6.80, implying 11.1% upside. He views the recent share-price pullback as a buying opportunity, supported by resilient earnings and improving shareholder returns, including a projected FY27 dividend yield of approximately 6.5%.
Raymond expects 2QFY27 net profit of RM514 million–RM557 million, bringing first-half earnings to approximately 48%–50% of his full-year forecast. Stronger net interest income and interest-rate hedges should help cushion potential bond-related valuation losses, while asset quality remains stable.
Looking ahead, he sees scope for an interim dividend of approximately 15 sen per share, keeping the bank on course towards management’s 60% FY27 payout target. He also identifies the approximately RM2 billion capital-return programme from FY28 onwards as a potential re-rating catalyst. His earnings forecasts remain unchanged, with the upgrade reflecting a more attractive risk-reward profile and stronger distribution prospects.
As of 9:25 a.m. on October 28, AMMB Holdings’s share price was unchanged at RM6.30.
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