Categories: Business News

RCE Capital: Lifted by Lower Impairments (RCE MK, Trading Buy, TP: RM1.25)

RCE Capital’s 1QFY27 core net profit grew 16.9% YoY to RM30.4m, driven by lower financing impairments, which helped to cushion the impact from lower revenue.

Financing receivables declined marginally by 0.5% QoQ to RM2.1bn. Results were in-line with expectations, accounting for 23% of our and consensus’ estimates.

RCE Capital

“We trim our earnings forecast to reflect bookkeeping adjustments. Following the recent share price retracement, we believe valuation has become more attractive, with RCE trading slightly below its 1-year forward average PER of 12.1x and P/BV of 1.8x. Additionally, we think that RCE continues to offer a defensive dividend profile, with an annual yeld of c.6%, underpinned by a dividend payout ratio of >70%.

“As such, we upgrade our call on RCE to Trading Buy from Neutral, with an unchanged DDM derived TP of RM1.25,” says PIB.

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Staff Writer

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