[ET Net News Agency, 9 January 2020] DBS Group Research initiated coverage on Guotai
Junan Securities (GTJA)(02611) with a "hold" rating and a target price of HK$14.4.
The research house said GTJA is a traditional comprehensive financial services provider
with a balanced business structure in terms of revenue contribution. However, as one of
the largest branch networks and staff teams compared with its peers, its lower-than-peer
average revenue-to-staff ratio has been detrimental to its ROE (return on equity).
The proportion of fixed income and dividend-paying investments remains the highest among
peers, suggesting that the company is relatively conservative in its investing business,
which also bodes ill for its ROE. (KL)