Nov 3 2020, 12:36 PM
QUOTE(HereToLearn @ Nov 3 2020, 09:59 AM)
Yeah, I strongly agree.
PB - lesser means more asset to be sold off instead things turn sour
PE - lesser means cheaper (we all know that)
ROE - lesser means less efficiency, but also can interpreting it as taking less financial leverage.
Among KLCI banks
CIMB PB lowest, PE single digit based on NP 20201 forecast, but ROE lowest (super inefficiency company, they aim to improve efficiency to selling off their 'goodwill')
you use pb for banks because (1) their books are always mtm and (2) much more stringent regulatory requirement like basel and ecl which shows differently on each financial statementsPB - lesser means more asset to be sold off instead things turn sour
PE - lesser means cheaper (we all know that)
ROE - lesser means less efficiency, but also can interpreting it as taking less financial leverage.
Among KLCI banks
CIMB PB lowest, PE single digit based on NP 20201 forecast, but ROE lowest (super inefficiency company, they aim to improve efficiency to selling off their 'goodwill')
use pb for valuation, roe for efficiency
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