KUALA LUMPUR (Jan 10): RHB Investment Bank Bhd Research has initiated coverage on RCE Capital Bhd at RM1.67 with a “Buy’ rating and target price of RM2.10.
In a note today, the research house said RCE Capital primarily engages in providing general financing services to civil servants.
“We forecast net earnings to grow 8.7% and 5.5% in FY20-21 (March) on a healthy expansion in receivables.
“Better borrower profiles should improve asset quality, although receivables growth may moderate.
“The current 0.8x FY21F P/BV against >15% ROE is at an unjustified discount to that of peers,” it said.