DBS Group Holdings

[Questions]

Has DBS reached its target price? Why DBS is not as good as OCBC now?

 

– Asked by a participant during Weekly Market Outlook (26 Mar 2018)

[Research Department]

Thank you for your question!

Our target prices for DBS is S$29.30.

Our preference now for OCBC is for 3 reasons, namely,

1.  Higher % upside to our OCBC target price;
2. OCBC is also leverage to higher interest rates (as is DBS) through insurance business;
3. Similar to DBS, OCBC can participate in the vibrant banking conditions in Hong Kong.

– Paul Chew, Head of Research

[LINGO1975]

Given the potential trade war between US and China, what is the future outlook of DBS especially from Q4 2018 and  2019 onwards? Will be the consensus target price be lower after DBS executed its dividends on 03 May 2018?

[Research Department]

Replying to #14863

@Lingo1975 Thank you for the question!

Any impact to DBS will be indirectly through a slowdown in global GDP, resulting in US cutting back estimates of loans growth especially business loans. Perhaps, Chinese banks that fund steel and aluminium exporters or ports that export such goods will face some stress in their ability to repay. Our target price includes all dividends. Our target price is based on 2018e book value that would have included the dividends.

– Paul Chew, Head of Research

[Author]

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