RHBInvest Research

AFG: Building the business for longer term

Market Perform

v AFG held a briefing yesterday in relation to its 4QFY11 results.

v The group’s medium term (3-5 years) targets were unchanged, which are:

1) gross impaired loans ratio that is in line with industry

2) CIR of 45-48% (currently 48%)

3) ROE of 14-16%

4) Dividend policy that pays “as much as we can afford, whenever we can”.

Corporate Highlights

Ann Joo: Turns around in 1QFY12/11 on margin expansion

Underperform

1QFY12/11 net profit came in within expectations. Ann Joo recorded a net profit of RM42.3m in 1QFY12/11 (from a net loss of RM2.7m in the previous quarter) as the impact of the steel market recovery finally kicked in and margins expanded.