KUALA LUMPUR (Jan 19): Public Investment Bank Bhd and RHB Research Institute Sdn Bhd maintained their Buy calls on CIMB Group Holdings Bhd shares due to CIMB's positive outlook in 2018. 

Public Investment Bank analyst Ching Weng Jin wrote in a note today that there is scope for further CIMB earnings upside, should the group's regional exposure make a quicker-than-expected turnaround. Public Investment's note follows CIMB Thai Bank Public Co Ltd's announcement yesterday on its earnings for financial year ended Dec 31, 2017 (FY17).

Yesterday, CIMB Group said its 94.11% indirectly-held subsidiary CIMB Thai reported a FY17 net profit of THB384.9 million (about RM46.19 million) versus a net loss of THB629.53 million a year earlier. Today, Ching said: "While we are somewhat disappointed over the slower-than-expected progress in its Thai turnaround, we are positive on its other initiatives in positioning itself for growth, over the medium to longer term."

RHB analysts Fiona Leong and Stephanie Cheah said RHB expects continued improvement in CIMB Thai's earnings in FY18.

"This would be led mainly by lower credit cost, as asset quality and net interest margins stabilise on active management of funding costs," they said.

Public Investment and RHB have target prices of RM7 and RM7.50 respectively for CIMB shares, according to the research notes.