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UBS upgrades CM Bank (03968) to HK$43.6
UBS Global Research lifted its target price for
China Merchants Bank (CMB)(03968) to HK$43.6 from HK$39.2, and upgraded its rating to
"buy" from "neutral".
  The research house said CMB underperformed the sector. It's current valuation stands at
1.3x 2018 P/BV, markedly below the peak of more than 1.5x P/BV. With the bank's
best-in-class fundamentals and already rebounding ROE, UBS believes the last week price
correction provides investors an investment opportunity.
  UBS said the recent market volatility will have a minimal impact on the bank's 
fundamentals as economic activity remains robust. While the bank expects deposit 
competition to intensify further, UBS believes the impact should be partly offset by 
higher loan pricing as well as CMB's ability to retain customer loyalty with premium 
services supported by strong IT infrastructure.

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