[ET Net News Agency, 30 October 2018] Daiwa Research lowered its target price for GF
Securities (GFS)(01776) to HK$10 from HK$17.5, and maintained its "hold" rating.
The research house said questions raised during the conference call centred on risk
solutions for the stock repo business and asset management (AM).
As at end-3Q18, GFS' stock-repo lending balance was CNY26bn (versus CNY27bn at end-1H
and end-2017), around 29% of GFS' total equity at end-3Q. In addition, the stock-repo
lending balance through its targeted AM plans stood at CNY21bn. GFS recognised impairment
losses of CNY190m in the stock repo business in the 9-month 2018.
To factor in recent capital-market conditions, Daiwa cut its 2018-19 earnings forecasts
by 25-30%. (KL)