JPM Rates BOC HONG KONG (02388.HK) at Overweight with Target Lifted to $32.5
JPMorgan, in its report, said it did not rule out near-term profit taking after BOC HONG KONG (02388.HK) 0.000 (0.000%) Short selling $21.00M; Ratio 6.797%
's massive outperformance in the past 12 months, but any major pullback in share price would be a good buying opportunity. The broker revised up the earnings forecasts by 9.3%/0.8% for FY17/18 to factor in divestment gains of Chiyu Bank and better NIM outlook and raise the target price to $32.5, with rating Overweight. JPMorgan also listed BOC HK as the top pick among Hong Kong banks.
The broker said BOC HK has maintained its leading position in CNH deposits but declining sector-wide balance suggested CNH deposits now account for only 10-11% of total deposits at BOC HK and thus adverse NIM impacts due to recent volatility at CNH HIBOR are diminishing. On the other hand, recent increase in HIBOR will be positive for NIM by enhancing the asset yields via re-pricing while funding costs remain largely stable.
JPMorgan, in its report, said it did not rule out near-term profit taking after BOC HONG KONG (02388.HK) 0.000 (0.000%) Short selling $21.00M; Ratio 6.797%
's massive outperformance in the past 12 months, but any major pullback in share price would be a good buying opportunity. The broker revised up the earnings forecasts by 9.3%/0.8% for FY17/18 to factor in divestment gains of Chiyu Bank and better NIM outlook and raise the target price to $32.5, with rating Overweight. JPMorgan also listed BOC HK as the top pick among Hong Kong banks.The broker said BOC HK has maintained its leading position in CNH deposits but declining sector-wide balance suggested CNH deposits now account for only 10-11% of total deposits at BOC HK and thus adverse NIM impacts due to recent volatility at CNH HIBOR are diminishing. On the other hand, recent increase in HIBOR will be positive for NIM by enhancing the asset yields via re-pricing while funding costs remain largely stable.
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