[ET Net News Agency, 13 July 2020] Morgan Stanley lowered its target price for GF
Securities (01776) to HK$8.03 from HK$8.7 and maintained its "underweight" rating.
CSRC on 10 July issued penalties for GFS`s involvement related to Kangmei. GFS is banned
from securities sponsoring for 6 months, and from bond underwriting for a year. Fourteen
employees face penalties including being deemed not suitable investment banking (IB)
candidates for 10-20 years, salary restrictions, etc.
The research house said the ban is the heaviest in China's securities history. GFS will
likely miss out the direct financing development this year and potentially some time
beyond. Morgan thinks the penalty may lead to GFS falling behind.
It cut its net profit estimates by 4%, 8%, and 9% for 2020, 2021, and 2022 as a result.
(KL)