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<Research>BofAS Hikes TPs on CN Brokers, Downgrades CITIC SEC and CMSC to Underperform
Recommend 6 Positive 17 Negative 3 |
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In its report, BofA Securities maintained its forecast for the ADT of A-shares in 2024 and 2025 at RMB850 billion and RMB1 trillion, implying that the A-share ADT in 4Q24 under the base case will reach RMB1 trillion. After the recent rally, the broker raised its total investment return forecast for Chinese brokers by 0.2-0.7 ppts, resulting in a 3-20% rise in the EPS forecast for Chinese brokers in 2024-25. Correspondingly, the broker hiked target prices for the sector by 10-49% (see a separate table), and the ROE was expected to rise from the current range of 4-9% to the range of 5-10% in 2024 and 2025. The broker believed that a cautious view should be taken of Chinese brokers in the near term, and recommended Underperform ratings for the sector with strong performance and Buy ratings for those with undemanding valuations. As a result, the broker downgraded CITIC SEC (06030.HK) and CMSC (06099.HK) to Underperform as their valuations are no longer enticing. HTSC (06886.HK) was also downgraded to Neutral, and the coverage of GTJA (02611.HK) was resumed, with a target price of $13.08. In addition, the broker preferred CICC and CGS (06881.HK) because their valuations are cheap relative to the average and the M&A backdrop in the industry is worth paying attention to. AAStocks Financial News |
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