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NRA Capital Pte Ltd

Written by: Lynn Look

Monday 13 Aug 2012

Hong Leong Finance - Margins faced further pressure

Hong Leong Finance reported a 40% y-o-y decline in interim net profit to S$31m

Earnings Revision. We are cutting our full year forecast by 17% to S$53m to factor the lower NIMs, slower loans growth and higher provisionings expected in the second half. Although the shares are trading below its book value at 0.6X P/B, half of what the banks are trading at now, it is however trading at PER of 19-22X for FY12-14, relatively expensive compared to the banks. Maintain SELL.

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