KUALA LUMPUR (Nov 20): Hong Leong Investment Bank cut its target price for AMMB Holdings Bhd shares to RM6.72 from RM7.77 previously. This followed an earnings forecast downgrade on AMMB after its first half financials missed market forecast.

In a note today, Hong Leong said it however maintained its "hold" call on AMMB shares. At 3.48pm, AMMB shares rose five sen or 0.8% to RM6.57.

Hong Leong said it had cut its income forecast for AMMB by 10.5% to 11.6%
in financial years ending March 31, 2015 (FY15) to 2017.

Hong Leong said AMMB’s net profit of RM445.8 million in 2QFY15 took its 1HFY15 core net profit to RM851.1 million. The 1HFY15 numbers only accounted for 43.4% and 47.4% of Hong Leong's and consensus forecast, hence, below expectations.

In a conference call with analysts yesterday, Hong Leong said AMMB had lowered its FY15 key performance indicators (KPI).

AMMB's profit after tax and minority interest growth was cut to about 8% versus 10% previously.

Meanwhile, its return on equity was cut to 14% versus 14.2% to 14.5% previously.

“Loans growth target has also been lowered to circa 3% vs circa 9%,” Hong Leong said.