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HL Bank’s fundamentals remain impeccable, with strong asset quality. Factoring in Cukai Makmur, we lower FY22E earnings by 6%, but raise FY23/24E earnings by 2% respectively on lower credit cost assumptions. We upgrade to BUY with a higher TP of MYR20.80 (from MYR19.30), pegging CY22 earnings to a PER of 1.3x (CY22E ROE: 10.3%).

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