[ET Net News Agency, 20 October 2020] Morgan Stanley lowered its target price for Bank
of Communications (BankComm)(03328) to HK$4.3 from HK$5.6 and maintained its
"equal-weight" rating.
The research house believes the key concern on China banks has shifted from macro/NPL
risks to uncertainties from policy window guidance, which has reduced the chance of
excessive ROE at state-owned China banks when GDP growth and credit demand finally slows
in the future.
Morgan said BankComm's reliance on interbank funding could benefit more compared with
other big banks, from the ample interbank liquidity with lower rates. NSCA (Non-Standard
Credit Assets) growth at BankComm resumed, which might reduce transparency. Its credit
card business, one of its core strengths, has faced asset quality pressure recently. (KL)