MBSB Research maintained its BUY call on Hong Leong Financial Group Bhd with a revised target price of RM26.14 from RM26.78, after FY26 core net profit came in line with expectations while its 79 sen dividend per share surprised on the upside.
MBSB Research said FY26 core net profit fell 6% year-on-year to RM3.43 billion, mainly as higher loan provisions offset improvements in net interest income, non-interest income and associate contributions. The result represented 104% of both its and street estimates.
However, 4QFY26 core net profit rose 26% quarter-on-quarter to RM945 million, supported by stronger net interest income, non-interest income and net writebacks despite higher operating expenses.
Within the group, Hong Leong Bank Bhd’s FY26 performance grew 3% year-on-year as higher loan provisions weighed against better topline and associate income.
Hong Leong Assurance’s profit before tax jumped 184% quarter-on-quarter to RM227 million in 4QFY26, driven by stronger insurance service and investment results. For the full year, PBT rose 12% to RM743 million.
Hong Leong Capital also posted a stronger quarter, with PBT rising 90% quarter-on-quarter to RM26 million, while FY26 PBT increased 9% to RM85 million.
MBSB Research trimmed its FY27 and FY28 core profit forecasts by 1% each, citing guidance for slower loan growth, but retained its BUY recommendation. The revised target price is based on a lower 1.39 times price-to-book valuation for Hong Leong Bank.
As of 3.48 pm, the stock price dipped 0.42% to RM19.06.
