Tactical view post results – Sell-into-strength at $29.1-29.50
- Mixed outcome on 2Q23 results that was released this morning
- Total income of S$3.542bn was ahead of consensus by about 5%
- But credit cost guidance raised from 20-25bps in 1Q23 to 25bps for rest of FY23
- Fees growth revised down from double-digit to high single-digit
- Other guidance unchanged, such as (i) low-to-mid single-digit loan growth, (ii) margins to hold steady at current levels, and (iii) disciplined cost management
- Tactical view
- Better-than-expected total income + strong 85cts interim dividend (vs. 60cts in past 2 years) should see the stock price pop higher in the immediate term
- Upside cap at $29.1-29.5 heading to ex-dividend date on 4 Aug, based on Fibonacci projection
- Stock vulnerable to correction post ex-dividend considering lower fee income growth guidance and that the next XD date is > 8 months away
- We currently have a HOLD recommendation and TP of S$30.30