KUALA LUMPUR: RCE Capital Bhd 's operations remains largely stable despite the current lockdown and is expected to regain its losses upon the easing of the restrictions, similar to what was seen in 1QFY21.

       RHB Research, which has a "buy" call on RCE Capital with a target price of RM3.20, said the group's income is likely to see some quarter-on-quarter weakness due to the reduced early settlement income caused by lockdown, but expects the group to recover when restrictions ease.

       In 1QFY22, RCE's Patami of RM35.4mil were largely in line with RHB Research's and consensus expectations at 28% of full-year estimates.

       Moving forward the research house does not foresee any issue with collection despite the government's decision to cut 800,000 civi servants' allowances to contribute to the Covid fund.

       It also expects its shariah listing status to be on track to meet the November deadline.

       "We fine-tune our FY22F-23F earnings by 1-2% on lower financing growth, but offset by higher NIM assumptions. Our TP is kept at MYR3.20. We value RCE at 1.3x FY22F P/BV against 16% ROE," it added.