[ET Net News Agency, 28 May 2018] Credit Suisse raised its target price for China Citic
Bank (00998) to HK$6.4 from HK$4.7, and upgraded its rating to "neutral" from
"underperform".
The research house raised its FY2018-20 EPS by 12-19% to account for better NIM,
stronger ABS non-interest income and lower credit costs.
Credit Suisse said bulk of its profit estimate increase came from higher asset growth
and NIM rebounded that started in 2H 2017. It believes the trend will sustain in 1H with
help from lower inter-bank funding yield since 1Q and robust growth in higher yield retail
loans.
Meanwhile, the strong ABS income growth has offset weak fees that management still
targets for positive growth, which will bring more upside if achieved. However, Credit
Suisse is concerned on its tight capital, which will constrain growth in 12-18 months
without capital injection. Management indicated Rmb40bn CB issuance by year-end, although
timing and the actual conversion of the CB is still uncertain at this point. (KL)
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00998 CITIC BANK
Nominal 
4.390 +0.010 (+0.228%) Others
28/05/2018 15:57
[I-bank focus]CS upgrades Citic Bank (00998) to HK$6.4
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